Cereals 2006 : Grower optimism is on the rise for biofuels industry

There was a distinct biofuels buzz at Cereals 2006.

News that a major oil company, BP, was to invest heavily in biofuels was particularly encouraging for the fledgling industry, according to Malcolm Shepherd of Green Spirit Fuels.

He pointed out that the bioethanol industry was developing so fast that there was a waiting list for engineering contractors to install production facilities.

“The USA is building 33 plants, and there’s a queue.”

In the UK raw material supplier Wessex Grain, the farmer-owned business, which had a 68% stake in GSF’s Somerset bioethanol factory, reported a “huge response” to its call for growers to take up contracts announced in May.

It had already secured over half the plant’s needs for the first working year.

The Henstridge facility was just one of several planned across the country to convert high starch feed wheat to green fuel, explained Mr Shepherd.

“The target is 700,000t of bioethanol by 2012.”

He pointed out that the exercise would contribute positively to the government’s five key areas of public policy, namely supporting agriculture, enhancing the environment by reducing greenhouse gases and contributing to cleaner air, ensuring fuel security, and introducing new technology.

Biodiesel also came under the spotlight.

HGCA chairman John Page noted that the Biofuels Corporation biodiesel plant on Teeside, with a production capacity of 250,000t a year from a range of vegetable oils, which could include oilseed rape, was the biggest in the world.

It sent out its first shipments in May.

“It’s a beautiful plant.

We don’t shout about our successes enough.”

Greenergy signed an agreement with Desmet Ballestra which should double biodiesel production capacity at its Immingham plant to 200,000t by August 2007 and allow it to extend its Field to Forecourt contracts.

About 55% of its output will come from oilseed rape, said the firm’s Andrew Owens.

“The last year has seen significant consolidation and growth in the biofuels market driven by consumer demand for improved environmental performance, the economic environment and confirmation of the Renewable Transport Fuels Obligation.”

Some 350 growers who had produced 2005 crops for FtF contracts and had signed up again for the 2006 harvest were to receive loyalty bonuses of £1.50/t, he noted.

Two-year fixed-price contracts, based on the daily changing market, were already on offer through various merchants.

Frontier’s on the day was £171/t, according to Trevor Robinson.

Noting that the Biofuels Corporation plant was already on-stream, John Seymour of Northeast Biofuels, a cluster group of growers and businesses committed to developing a sustainable biofuels business in the area, explained that the biggest block to its uptake of more oilseed rape was the shortage of UK crushing capacity.

“We’re aiming to put a 500,000t crusher opposite the [BC] site and we’ve gone from a case of ‘if’ to ‘when’.”

Funding for the project was “already well on the way” to its 40m target, noted Colin Merritt of Monsanto one of NB’s agricultural supply members.

The money was coming through Climate Change Capital rather than the “riskier” Alternative Investments Market.


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