The UK’s fledgling biofuels industry is under threat from unfairly subsidised fuels from the United States, according to the operator of one of Europe’s largest biodiesel plants.

Sean Sutcliffe, chief executive of troubled Teesside-based biodiesel producer Biofuels Corporation, said biofuel production subsidies in the US were “severely damaging” the industry in both the UK and the rest of Europe.

‘Unfair subsidy’

European producers were left unable to compete with US imports which were being sold below the cost of production, Mr Sutcliffe said.

“It is damaging for biofuel producers but also for people looking to put land to use for biofuel” Sean Sutcliffe, Biofuels Corporation

“This has led to what was a growing market for UK producers turning into one where 75% of the market appears to be supplied from the US.

“That’s an unfair subsidy. It is damaging for biofuel producers but also for people looking to put land to use for biofuel.”

Restructuring

Mr Sutcliffe’s comments come after Biofuels Corporation approved a restructuring plan allowing Barclays bank to reduce the company’s £100m debts.

At a board meeting on Monday (23 July) the company agreed to cancel its AIM listing from 2 August and reregister as a private company under the name Earls Nook Limited.

The firm has been operating at 25% capacity since January, but at full capacity the plant should use a 250,000 tonne blend of oil seed rape, palm oil and jatropha, sourced from UK and European farmers.

“When the market turns around we will return to full capacity”

‘Loophole’

“We are running as normal, and when the market turns around we will return to full capacity,” Mr Sutcliffe said.

“The issue in America is having a huge impact on the company. The benefit US producers are receiving from the production subsidies and the duty differential in Europe is not deliberate, but it’s having a very real effect.

“We have been asking for the US government to sort out this loophole and we have approached the European Commission to help us set a level playing field. The problem is this could take a long time.”

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Biodiesel firm in talks over £100m debt