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D1 Oils closes UK biodiesel refinery
18th April, 2008
High production costs and cheap biodiesel imports have brought the refinery to a close
Europe's domestic biofuels industry has been devastated by a legal loophole that allows American exporters of biodiesel to Europe to qualify for subsidies worth £0.11 (€0.14) a litre, or $300 a tonne.
D1 Oils, which made an annual loss of £46.1 million, is also ready to close its refinery on Merseyside so it can refocus on plant science and growing jatropha crops needed for the production of biofuel. Last year, the producer agreed a 50-50 fuel planting partnership with fuel company BP, which has led to the expansion of its jatropha crop plantations, in India, Africa and South-East Asia. D1 wants to grow a million hectares by 2012.
The company also plans to raise another £16 million through a share placing to finance its planting and research venture.
'Refining food-grade vegetable oils into biodiesel in Europe has developed into a highly-competitive market, in which only very large-scale operations are viable,' Elliott Mannis, D1 Oils CEO, comments. 'We intend to withdraw from this business and propose to close our UK refining sites. We believe that the best way to deliver value for shareholders is to leverage our technology and experience in jatropha to focus the business on the upstream breeding, planting and managing of new varieties of sustainable, commercial biofuel crops.'
