UK biodiesel firm sees future under threat

From the Yorkshire Post:

A Teesside biofuel maker is making people redundant less than two years after taking them on – due to subsidised competition from the USA.

The troubles of D1 Oils, based at Middlesbrough, illustrate growing cause for alarm about the way the business of making fossil fuel substitutes from crops is developing.

Now, the UK, like others in Europe, is offering tax relief on biofuels for transport. So the soya processors can get a dollar a gallon from the American taxpayer to make biodiesel and 20p a litre from the British to sell it. According to competitors, the Americans even claim the subsidies on tropical palm oil which they import, and blend with their own soya extract, before exporting it again – a trick known as Splash & Dash. One way and another, the B99 dealers are apparently rubbing their hands in anticipation of the UK's Renewable Fuels Transport Obligation, which starts to take effect next month.

Meanwhile, D1's founding chairman, Karl Watkin, has gone, leaving a resignation statement which laid into the failure of government and markets to distinguish between biofuels made to save the planet and those made to exploit the system. The company he left behind says jatropha is still a winner and its backers will see it through. But its refining operation is down to tick-over and it has notified 69 staff – mainly in Middlesbrough, but also at a refinery on the Mersey – that it needs redundancies. The unofficial estimate is one job in two.

John Seymour, a Country Durham arable farmer, is rural affairs spokesman for North East Biofuels, a consortium of regional interests.

He said this week: "D1's bad luck is bad news for all of us. The legality of what the Americans are doing is being challenged. And the EU has to do something about a tax system which takes no account of where a fuel comes from. Meanwhile, though, a lot of people are making a fortune and by the time it is all sorted out, the damage will be done."