Biodiesel firms face ruin

Britain’s biofuel industry is close to collapsing, according to one company, which is millions of pounds in debt

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14th June 2007

Bosses at Biofuels warned that the rising cost of vegetable oils, which are used in the production of the firm’s bio-diesel, were to blame for its £100million shortfall. Tough competition from the US has also played a part.

Chief executive Sean Sutcliffe argued increased demand for food was at the root of the problem. His Teesside business currently uses edible rapeseed, soya and palm oils to produce its fuel. But he stated: “China’s food requirements for soya alone increased from 22 to 29 per cent last year, pushing prices up.”

He added that huge subsidies handed out to US producers meant UK firms also struggled to compete. “It’s threatening to shut down the entire European biofuel industry,” he warned.

One solution is to use non-edible crops, such as the oil extracted from Jatropha seeds. A spokesman for rival firm D1 Oils said: “This doesn’t compete with food sources, so we’re not affected by the rocketing price of vegetable oils.”