Directive builds biofuel hopes

THE UK lags far behind the rest of the EU in embracing so-called green road fuel. But there is still hope that “much talk and little action” about biodiesel from oilseed rape can be turned to “little talk and much action”.

That was the message from Cargill”s Peter Smith to delegates at last week”s HGCA Oilseeds and Pulses conference near Peterborough.

His main hope lies in the EU Biofuels Directive which aims to have 2% of all road fuels coming from renewable resources by the end of the year, rising to 5.75% by the end of 2010. “That would mean 2.3m tonnes of biofuel in the UK alone.

” While not obligatory, member states must give good reasons for not complying with the directive. The UK”s 0.3% target for 2005 seems small, but represents a huge increase on current production.

There is still much debate on introducing a Renewable Road Fuels Obligation whereby standard products would have to contain a blend of biofuel, he acknowledged.

“But my feeling is that this is the route we shall go and I believe we will start catching up with the rest of the EU in the next two years.”

The other possibility is that tax differentials will be extended to encourage the petroleum industry to use biomass in the shape of vegetable oils in their crackers.

“Last year, Germany produced almost 1m tonnes of biodiesel and production capacity for 2005 is to be expanded to 4m,” said Mr Smith, commercial manager of the firm”s refined oils division.

In contrast, the UK made just 15,000 tonnes, mainly from waste cooking oil, he said. That represents only 0.1% of UK diesel use.

“Today it”s a cottage industry here, basically a waste disposal service which I find rather sad.”

A key reason for the difference is the long term commitment of the two countries, he explained. The UK government”s duty derogation of 20p/litre is guaranteed only for three years.

“Germany has a 100% derogation from 2003 to at least 2009, so they have a six-year advantage over us.

” That is why a four-year-old business plan for a UK Cargill plant remains in his desk, he pointed out.

Even with the UK”s derogation, the retail price of biodiesel is still 7p/litre higher than the conventional product, he said. “So it needs further support from somewhere.”

That could come from making more of the product”s “green” credentials to persuade people to pay more at the pumps, he suggested. “It has to be marketed as a benefit.”

An all-embracing voluntary accreditation scheme subject to independent audit could achieve that.

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