May 5, 2012 Saturday
1 Star Edition
IT'S not so long ago that the possible earnings available for growing crops for the biofuels industry were being held up as a valuable market for North East farmers.
But the sector has so far failed to meet expectations and figures published this week by the Government make further disappointing reading for growers.
Since 2010, the Renewable Transport Fuels Obligation (RTFO) has required 5% of road vehicle fuel used in the UK to come from sustainable, renewable sources.
But the latest Department for Transport statistics show that currently, nine out of 10 litres of biofuels used in the UK are made from foreign raw materials. The figure is even worse than in 2010- 11, when 22% came from UK-grown feedstocks.
The NFU says UK biofuel growers and processors have been "left high and dry" by the Department for Transport's decisions - even though farmers are upping their game to meet European sustainability requirements.
NFU chief arable advisor Guy Gagen said: "The efforts of British farmers and certification bodies to meet EU sustainability criteria under the Renewable Energy Directive and the UK RTFO are being ignored.
"These figures show the damaging impact of UK government dithering over the past year, with British production capacity lying idle and British-grown and processed biofuel feedstocks progressively replaced by imports.
"A combination of policy delay, inaction and extending timescales for renewable transport fuel targets has hit UK use of home- produced biofuels hard.
"Biofuel imported from third countries and used cooking oil (UCO) is not expected to meet the same sustainability standards for crop feedstocks as EU and UK crop based fuel, a slap in the face for our farmers who have been at the forefront in demonstrating their sustainable production standards. "As a biofuel feedstock, UCO benefits under the UK RTFO by being double-counted compared to UK beet, wheat or oilseed rape based fuels, but it is mostly imported and of uncertain provenance- a perverse outcome indeed.
"It was good to hear last week that the Prime Minister is 'passionate' about renewables, including bioenergy, but his government has got to get behind the domestic renewable fuels sector and stop putting barriers in the way of British growers and processors." British farmers are currently waiting for the European Commission to approve the Red Tractor Crops and Sugar Beet Scheme, which will mean they can demonstrate that they meet new sustainability requirements for biofuel crops under the Renewable Energy Directive (RED).
It's more than 18 months since the scheme was submitted for approval and it has met with a number of delays. It is now hoped approval will be granted in time for this year's harvest.
John Seymour, who grows wheat, oilseed rape and barley at East Farm near Seaham, has been involved in the biofuels industry for two decades.
He said: "The UK sustainability criteria is the Red Tractor scheme. All farmers have to sign up. It's audited to ensure we are producing wheat for bioethanol in a sustainable way in the UK.
"It hasn't yet been approved by the EC, but they have approved the German scheme - it's a simple logistical problem, they just haven't got round to it.
"Their main excuse is that they ran out of funding. It's left UK farmers out on a limb, but it is about to be adopted by the EC. It's this lack of adoption that has stopped UK feedstocks being used."
Alongside regulatory issues, Mr Seymour says current high prices and demand for British oilseed rape is diverting the crop away from being used in domestic biodiesel. "The other reason is the price, particularly with rapeseed," he said. "It's at an all-time high at the moment and there is a massive shortage. The Chinese have an insatiable demand for rape oil. We grow massive amounts, it's the only oilseed crop we can grow this far North in Europe and it is a far better oil. It is lighter and it's better for food and biodiesel.
"They [biodiese refiners] tend to use more rapeseed as a blend in the winter because the other oils tend to wax up when it gets really cold.
"But there is a limit on how much you can grow because it has to be part of a rotation."
He is aiming to supply the Ensus biofuels plant on Teesside once it is up and running once more. It announced a temporary shut down last year due to the state of the market, but is gearing up restart production.
"Most of the wheat will be going into the bioethanol plant Ensus when it fires up again and a percentage of the rapeseed will also go into it," said Mr Seymour.
"The Department for Transport have been pathetic. They don't know which way to go. The NGOs [non-Governmental Organisations], one minute they are for wind, the next they are against it. It's the same with biodiesel. The Coalition have tried to pander to everybody and done nothing.
It's a mockery that they say they want to be the greenest government ever. "The Department for Transport, because they've been so negative and indecisive, it's not putting out good signals to the industry. There is a lack of clarity. There's a huge ignorance.
This is potentially a massive business on Teesside. It is going to happen. You've got everything there - the existing petrochemical industry, the growers and the deep water."
UK HUBS FOR BIOFUELS PRODUCTION TEESSIDE and Humberside are considered the UK hubs for biofuels production.
The two areas share access to deep water and have a plentiful supply of growers nearby.
On Teesside, the pounds 300m Ensus plant is Europe's biggest wheat bio-refinery. But it closed last year because of falling demand, saying it was waiting for an improvement in the market and the regulatory framework before it restarts production. The site in Yarm was hit by rising grain prices, falling demand and competition from the US but it is now preparing to restart production. Ensus operations director Andy Teague, said: "Ensus is pleased to note that after several months delay the EU Customs Codes Committee has published a new tariff rate for alcohol/gasoline blends. "In anticipation that market conditions will start to improve, maintenance and general engineering activities have been stepped up at the Teesside bio-refinery. "The company has not yet announced a re-start date, but the work would enable any re-start to take place more quickly."
When working at capacity, the Ensus plant refines locally grown animal feed wheat to produce more than 400 million litres of bioethanol, 350 thousand tonnes of high protein animal feed, and 300 thousand tonnes of carbon dioxide for use in soft drinks and food production each year.
It can produce enough biofuel to meet one-third of the UK's bioethanol demand and the carbon dioxide produced during the fermentation process is captured, liquefied on site and sold for use by food, drinks and industrial customers. Meanwhile, the Vivergo Fuel plant at Saltend, near Hull, is about to fire up.
When running to capacity, it aims to use around 1.1m tonnes of wheat annually and will also be able to produce around one-third of the UK"s forecast biofuel demand, or around 420 million litres of bioethanol a year.
The Humberside business will also be the UK"s largest single source supplier of animal feed producing 500,000 tonnes per year.
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(Originally published May 5, 2012, in the Journal.)