Biofuels is top in the UK, but there is not room for complacency

Mar 13 2007 By The Journal

A Teesside alternative fuels firm is going from strength to strength and continues to grow with increased production all part of Biofuels Corporation's future plans.

Production at the company's £45m facility at Seal Sands got under way in February last year - with its first consignment shipped just weeks later. The company is in an ideal location to take advantage of North-West European markets with direct access to a deep water port allowing them to distribute product and receive raw materials by ship as well as road.

As a multi-feedstock plant, Biofuels Corporation can take advantage of world markets and prices by switching to the most economical or customer demanded product when required.

Indeed the company sources only the best raw materials and can trace the source of supply to guarantee they meet the highest standards. It sources GMO-free materials that are sustainable.

This means the firm ensures the crops used for its products are not destroying the rainforests or animals habitats. The products are all kosher vegetable derived.

Based on Austrian engineering, the plant operates on continuous stream technology, ensuring that it has a small footprint, with efficient use of land, energy and time.

And design and project work has now started on the company's next phase of development - expanding the site to increase production from 250,000 tonnes-a-year to 600,000.

The investment in two additional streams would see an extension added to the current plant.

"At the moment we're the number one producer of biodiesel in the UK," said Andy Girdharry, head of sales at Biofuels Corporation.

"Increasing output to 600,000 tonnes would put us amongst the top players in Europe and the world."

The Seal Sands site currently employs some 50 staff, and expanding capacity could see an increase in numbers.

The state-of-the-art plant was officially opened by Prime Minster Tony Blair last year who said the country must look at utilising every possible environmentally-friendly fuel available.

Now fully operational, the site intends to be running at full production later in the year.

"We're going from strength to strength," Mr Girdharry said.

"We are now supplying large fuel customers and we have companies placing orders for our co-products." Glycerine, which can be used in animal feed, personal care products and the food industry, and fertilizer ingredient potassium sulphate are produced as part of the biodiesel process.

"We are one of the few Biofuels companies with glycerine distillation and that gives us several advantages over our competitors and other players in the market," Mr Girdharry said. "We can reduce the risk of being tied to limited outlets for our co-products."

Biofuels Corporation was founded by Australians John Nicholas and Max de Grussa who came to the UK because of tax incentives on the production of ecologically friendly fuels.

Sean Sutcliffe, took over from Mr Nicholas as chief executive in 2004, and has continued to drive the company forward. He said "The European biodiesel market is a complex one, being dependent on the price of raw vegetable oil, the price of mineral diesel and the willingness of European Governments to stimulate the growth of environmentally friendly fuels in their countries.

"On this point of government encouragement, sadly the UK trails the European leaders in this area … but our location on a deepwater port and the flexibility of our plant gives us access to those markets that are attractive."

The company directors of Sean Sutcliffe, Richard Nickels, Alan Keasey, and Andrew Lesser have taken the company beyond the initial start-up to a world-class facility with a strong, motivated team. The company is poised not only to be one of the UK's green flagships, but also one of Europe's.

The need to find fuel from more environmentally-friendly sources continues to grow.

In 2003, the European Union issued a directive which has targeted 5.75% of transport fuels to come from biofuels by 2010.

In the UK, biofuels currently receive a 20p/litre duty differential compared to regular petrol and diesel.

And the UK Government has also announced it will be introducing from 2008 a Renewable Transport Fuels Obligation (RTFO) as a way of further supporting the uptake of biofuels, with a requirement of 5% of all road fuels sold in the UK coming from renewable sources by 2010.

"Currently we're producing what our customers need," Mr Girdharry said, "but as demand grows, so will our production."

Biodiesel is a liquid which can be easily blended with traditional diesel at ratios of up to 5% without any affect on engines.

The plant turns oilseed rape and other virgin vegetable oils into fuel - making it a renewable energy source. And it has the benefits of a substitute or additive to mineral diesel, reducing carbon emissions over the lifecycle, ultimately lowering pollution and improving energy security and supply diversity. Carbon monoxide is also reduced.

"The push to be green and improve the environment is now so important," Mr Girdharry said.

"UK transport accounts for 25% of carbon dioxide in the UK - across Europe the figure is 20%.

"After energy producers, such as power stations, transport is the biggest polluter.

"So clearly we can make a big impact on the environment just by adjusting our fuel."

The company has customers in the UK and across Europe.

"We're currently shipping more to Europe because the market is more developed there than in the UK," Mr Girdharry said.

"There's also stronger fuel legislation in some countries. But the market is evolving.

"This is the year when we expect to be in full production to cope with higher levels of demand as more companies realise they now have to take action to meet transport fuel obligations."

The development of the biofuels industry also has positive knock-on agriculture - with farmers growing crops to be used as feedstock for production.

"John Nicholas and Max de Grussa were pioneers of the biofuels industry on Teesside," Mr Girdharry said.

"They got in there early - which has put us years ahead in terms of development and production. Now we want to continue to grow and we are in a great position to do that with a blue chip management team leading the way."