No higher prices for biofuels

As the UK’s first right-hand drive car able to run on pure petrol or a mix with up to 85% ethanol without modification stood outside the Daventry venue, delegates heard of exciting times ahead for UK farmers.

But the message was not all rosy.

The country was ready to use fuels from fields, which can cut greenhouse gas emissions, and the technology was well understood, speakers said.

But UK growers were far from alone in pursuing the goal of greener power sources, and they should not expect more than commodity prices for their raw material.

NFU deputy president Peter Kendall believed biofuel production, spurred on by the recent Renewable Transport Fuels Obligation announcement, could transform farmers’ public image.

“Biofuels are a great opportunity.”

They could reverse 20 years of ambivalence to British agriculture by producing something clearly in demand and reconnecting with people who previously regarded farmers as “a pain in the backside”, he said.

Climate change and fuel security, especially in the light of oil price hikes, were big drivers.

Indeed Austria, which had just assumed EU Council presidency, aimed to double EU bio-energy production by 2010, noted Mr Kendall.

British Sugar’s Simon Leeds highlighted the company’s potential contribution through a 55,000t a year beet-to-ethanol plant at its Wissington factory.

“Biofuels are ready to go. It’s a new market for a commodity material,” he said.

Ford’s Andy Taylor believed lack of infrastructure to fuel the company’s Flexible Fuel Vehicle, a Focus, was the key reason why bioethanol as a fuel had not taken off in the UK.

“It’s the classic chicken and egg situation.”

Over 15,000 FFVs had already been sold in Sweden, he noted.

A new project to get suitable supply systems in place was under way in the south west and could be extended to East Anglia and London.

But the sole reason for the company’s interest was to be seen to be responding to concerns over global warming carbon dioxide emissions, stressed Mr Taylor.

“Car companies are not interested in rural development.”

Oil firms disliked biofuels, at least the so-called first generation types already available, and their experience with LPG as a fuel had added to their wariness, he added.

Even when biofuels became more widespread there was no reason to assume that UK crops would be the source.

“If you think the supermarkets are tough, wait till you start talking to the oil companies.

They don’t care a bean where it comes from.”

His view was echoed by D1 Oils’s Graham Prince.

Many developing countries, particularly India, with its vast areas of waste and marginal land and low labour costs, could produce the raw materials more cheaply, said Mr Prince.

Biodiesel could probably be produced in small refineries from Jatropha curcas, an oil-bearing perennial shrub, for about a third of the cost it does from UK oilseed rape.

“We aim to have 250,000ha planted by February 2007.”

But the HGCA’s Alastair Dickie remained bullish about UK biofuel production.

“This is the biggest change to agriculture since the repeal of the corn laws.

It’s a massive market and we are being asked to take part in it.”

Although Brazil’s annual growth in bio-ethanol production was 2bn litres, most of that would be needed for domestic use, he said.

“Brazil will not be able to supply the world with biofuel.”