Ministers thwart bio fuel opportunity

20 April 2001

‘Ministers thwart bio fuel opportunity’

By Andrew Swallow

GOVERNMENT policy is standing in the way of big opportunities for growers in power crops, claim bio fuel industry representatives.

Conventional oilseed rape could produce 6% of the UKs DERV requirements, claims the British Association of Bio Fuels and Oils.

The crop would be grown under the current support system and deliver substantial environmental benefits, says BABFO chairman Peter Clery.

It argues that no additional support would be needed because margins could match winter wheat under the current Common Agricultural Policy regime.

Cashflow would be the same as for conventional oilseed rape, growers would not need to develop new skills and processing plants already exist, says BABFO.

But despite plans to cut biodiesel duty by 20ppl in the next Budget, the resulting duty of about 25ppl would still be too high, claims Mr Clery.

This is too high to make production economic at current oil prices and way short of the parity with liquid petroleum gas and compressed natural gas, he says.

Those fossil fuels are set to be taxed at 6ppl, because they have a better emissions profile than petrol or diesel, with vehicle conversion grants available.

But biodiesel has comparable emissions profiles, requires no vehicle modification, is renewable and energy positive, claims Mr Clery.

More importantly for farmers, a duty of 6ppl and pump price of 75ppl would justify an ex-farm oilseed price of at least 150/t, he says.

Cargill managing director Graham Secker supports Mr Clerys claims. “Growers would make a better return than from growing wheat at 75/t.”

Duty parity with LPG would kick-start a UK biodiesel industry, says Mr Secker.

But in the long run a variable duty reflecting the relative value of mineral oil to vegetable oil would be fairer, he believes.

If vegetable oil values are low, and mineral oil high, a high duty rate could be paid. If vegetable oil is high and mineral low, then even 6ppl could be too high.


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