Farmers must seize the chance to grow crops for biofuel or risk seeing the industry exported.
If growers wait to see what happens, projects needing secure feedstock-supply contracts to under-pin loans to build production plants will not go ahead, warns Ian Waller, an independent adviser and director of NorthEast Biofuels.
“This will result in facilities being built elsewhere and the UK will remain an export market for agricultural commodities,” he says.
“All forecasters see increasing demand for agricultural commodities for future energy needs. Given that when the tide comes in, all boats rise, farmers should rightly remain optimistic. They should, however, also be pragmatic and realise that they need to commit to these opportunities in a timely manner.”
Become realities NorthEast Biofuels, a not-for-profit company limited by guarantee from the members, aims to inform and advise stakeholders regionally and nationally to create economic growth in the biofuels and added-value sectors. Members are mostly private companies spanning the whole supply chain.
NorthEast Biofuels, a not-for-profit company limited by guarantee from the members, aims to inform and advise stakeholders regionally and nationally to create economic growth in the biofuels and added-value sectors. Members are mostly private companies spanning the whole supply chain.
This will help ensure proposed projects like Green Spirit Fuels’ bioethanol plant at Henstridge in Somerset and the Tees Valley Biofuels oilseed rape processing plant can secure appropriate feedstocks and become realities, Mr Waller explains.
Appropriate and timely commitment may mean working with new contracting structures that limits farmers’ flexibility, he admits. “But the forward-thinking biofuel companies are already looking for ways to make sure additional value is delivered back to the farmer wherever possible in return for thatcommitment.”
Growers may also get the chance to take advantage of equity investment schemes. “The burgeoning biofuels industry offers UK farmers a different market structure, adding value directly and helping reduce the carbon footprint of fuels.
“In the long term this reduced carbon footprint may even add more value to commodities within the supply chains. Surely this makes sense for all stakeholders involved, from seed to tank.”
David Neale, Masstock business development manager, agrees that growers must be prepared to grow crops for fuel.
“We want to be seen to be helping to get this industry off the ground. If we don’t we’ll get left behind by the Continent.”
Most wheat producers who signed up to fuel contracts at what may now appear less-than-exciting prices did so on flexi-contracts or committed only token tonnages to demonstrate their interest, he notes.
“We’re involved with the Glencore project and totally behind biofuels.”
PROMISING FUTURE FOR FIELDS OF FUEL
|Green fuels from the fields have a promising future, according to the chief executive of the National Non-Food Crops Centre.|
Under the government’s Renewable Transport Fuels Obligation, fuel suppliers are obliged to include such products at forecourt pumps, says Jeremy Tomkinson.
So, while the cost of wheat, oilseed rape and other raw materials may rise, the environmentally driven incentive to use fuels derived from them will remain, he believes.
He suspects the recent price hike is an aberration caused by the drought in Australia.
However, sustained high prices would put a question mark over the fledgling industry, Dr Tomkinson admits.
“If we had three years of sustained high wheat prices we could be talking big problems.
“But being realistic I’m sure that those who have been looking to the banks for investment in new plants will have done their sensitivity analyses and built volatility into their business plans.”