By Sam Fortescue

 BIOFUEL SPECIALIST Global Commodities has closed a deal that should see it opening a newly-acquired plant in Hull this summer to turn used vegetable oil into biodiesel.

 The hope is that UK farmers will eventually supply rapeseed oil for processing at the plant, which has a 120m litres a year capacity and can be easily expanded, said chairman Dennis Thouless.

 But the factory would initially process only used vegetable oil when it opened this summer because it was cheaper than making biodiesel from virgin rape oil, he added.

 “We are still trying to get the government to agree to either a bigger discount on the excise duty for biodiesel or, if not, a statutory obligation to put 1% biofuel into fuels in this country.”

The latter would add 0.5p/litre to the cost of fuel at the pumps, he added, but was needed to meet EU legislation ensuring 5.75% of road fuel came from energy crops by 2010.

“What we need is more pressure on the government from farmers and the Country Land and Business Association. It is a great opportunity for growers; I see East Anglia as the oilfield of the future.”

The Hull site is being leased from Rix Biodiesel, which blends and distributes biodiesel to its 120 forecourts, as well as to other petrol stations and local authorities around the UK.

 Global Commodities was still hoping to develop a greenfield site in East Anglia into a biodiesel plant, but had hit planning delays which could last for years, said Mr Thouless. But he added he was still committed to the site, which could eventually produce up to 180m litres of biodiesel a year.

sam.fortescue@rbi.co.uk