Green fuel overspill
THE Teesside firm behind the 400m litre bioethanol plant, which will become the biggest producer of the green fuel in Europe when it opens this summer, is planning more sites.
Ensus chief executive Alwyn Hughes said it had already talked to existing investors and the European Investment Bank (EIB) about co-funding similar scale projects - but they would not be in the UK unless the Government ramped up its commitment to the sector.
He said that while the Teesside plant “would be profitable if we were running today”, additional expansion here was being held back by the Government’s decision to slow the rate at which green fuels must be incorporated into petrol and diesel under the Renewable Transport Fuels Obligation (RTFO) introduced last year. Having previously committed to reaching a mandate of 5% renewable fuels in every litre sold at the pumps by 2010/11, it pushed the target back by two years in January and reduced the 2009 target from 3.75% to 3.25%, following pressure from environmental campaigners - a decision Mr Hughes described as “frustrating and dangerous”.
Ensus has always maintained that its plant - which will use 1.2m tonnes of non-food grade wheat a year and turn it into biethanol, high protein animal feed and gas for the food industry - is fully sustainable. He said introducing such a large player into the UK commodities market would boost returns for farmers - although he did not commit to buying all his grain from them, as had been previously thought.
He did not rule out the possibility of expanding on Teesside, but said with the renewable fuels mandate now being introduced at a faster rate in other European countries, it was likely the next plant would be in the Antwerp/Rotterdam/Amsterdam triangle.
“The thing the UK needs to worry about is that the mandates are going in at a faster rate in Europe and the Europeans are fuelling more support for their renewable industries.
“The danger is that the UK will become just a user of the renewables energy industry and not a leader of the technology.
“This is the largest growth area for manufacturing in a country mile. The technology will change and develop over the next 20 years and I would like to see the UK leading in that area, but to lead you need investment and cash to drive research and development.”
Analysts have predicted that plants the size of Ensus will not make a return on investment in the UK until the RTFO hits 5%.
Although Mr Hughes, who expects to go into full production in September, said he could make money from day one, he added: “At some point the returns have to be at a level to encourage investment.”
