14 June 2002

Lack of biodiesel

backing means

end of OSR plant

By Andrew Swallow

PLANS to close the refinery at one of the UKs four main oilseed crushing plants have been blamed on the UK governments half-hearted approach to supporting a UK biodiesel industry.

"Cargill is closing its Hull refinery, which was to be the base of its biodiesel production," said British Association of Biofuels and Oils (BABFO) chairman, Peter Clery, earlier this week. Instead all production will be from an esterification plant in Germany, he said.

Cargill managing director, Graham Secker, refused to confirm or deny that the closure was related to lack of government support for biodiesel in the UK. But he did confirm that the duty rebate of 20p/litre on biodiesel announced in Aprils budget was insufficient to justify investment in esterification facilities here.

"The climate in parts of Continental Europe is much more conducive to the production of biofuels," he said. That is why a 40p rebate is desperately needed to create an incentive for investment in esterification plants in the UK, said Mr Clery.

Without that not only will any biodiesel used in the UK have to be imported but the associated cut in refinery capacity pushes the country closer to being a net exporter of oilseed rape or oilseed rape products which could discount the UK market to the rest of Europe.

But at the Cereals 2002 event in Lincolnshire on June 12 farmer-controlled business, Renewable Energy From Agriculture (REFA), said calls for a further tax cut were unnecessary. It believed a market-led move into biodiesel, initially using imported fuel in a blend, was a better approach.

"We have the opportunity now to start the business based on existing tax structures," said managing director, Robin Twizell.

"Any further monies the Treasury is prepared to release should be targeted at promoting the product as against reducing the price. We must educate the public that environmental benefits can be had but they come at a price."

Calls by farmers for yet more money for biodiesel when biofuel companies like Greenergy are planning to bring a 5% biodiesel, 95% fossil diesel blend to the market at only about 1p/litre above the price of normal diesel, admittedly using imported biodiesel, would not help British farming, he added.

"It is time farmer producers got more involved in upstream processing and marketing [of their crops] and biodiesel is a great chance to do that," he said. &#42