9 August 2002

OSR growers next in line for green fuel production

By Wendy Short North-east correspondent

THE prospect of UK farmers getting contracts to grow oilseed rape for fuel production has grown with the launch of three biodiesel products made from waste catering oil.

However, the price difference between the recovered oil at about £150/t and farmer-grown rapeseed oil at £330/t remains a stumbling block.

"We like the idea of buying rapeseed direct from farms because it produces a high quality oil which can be mixed with lesser quality, cheaper oils," says Rix Biodiesel director Rory Clarke.

"Although it is much too expensive at current prices, we have already thought about the type of on-farm contracts we may be able to offer in future. These would be based on environmentally-friendly growing methods, and we would probably ask farmers to use recycled fertilisers."

To bridge the price gap, the government needs to offer significant tax cuts and maybe other incentives, to help offset the large investment needed to produce biodiesel from farm-supplied rapeseed.

Demand for biodiesel will be the deciding factor, Mr Clarke believes. Even at full capacity, the Hull-based Rix Biodiesel can produce only 50,000t/year, with a production of just 15,000t expected this year.

That is a drop in the ocean compared with fossil fuel sales, he admits. If the product takes off and the company expands production, it might have to look outside the catering industry for raw materials. Sourcing oilseed rape straight from farmers would be one option.

"If the product is successful the government is more likely to support a move which would allow oilseed rape for fuel to be grown economically on farms," he says.

Another factor which could have a significant impact is a possible EU ban on using waste oil in animal feeds.

"If that happens, the price of waste oil would fall because the catering industry would have a problem getting rid of it because it cannot be dumped in landfill sites. This would widen the price difference between waste oil and farmer-grown oil," says Mr Clarke.

"But the saving on recovered oil might mean we could afford to pay more to our farmer growers." &#42

RIXBIODIESELAIMS

&#8226 100% biodiesel for public transport in urban areas.

&#8226 80:20 blend of fossil fuel: biodiesel.

&#8226 95:5 fossil fuel: biodiesel mix.

&#8226 Same price as conventional diesel.