Argent pulls plug on plans for New Zealand biodiesel plant

Published Date: 02 August 2008
By Hamish Rutherford

ARGENT Energy has abandoned plans to build a NZ£100 million (£36.8m) biodiesel plant in New Zealand, claiming subsidies to competing products made the plan uneconomic.
The Motherwell-based company had spent two years investigating the viability of a New Zealand operation, attracted by the plentiful supply of tallow – waste animal fat – created by the country’s sheep industry, and indications from the government there that it would encourage domestic sources of fuel.But yesterday Argent New Zealand managing director Dickon Posnett blamed a government subsidy for ethanol, which amounted to around NZ42c (15.5p) a litre, which would compete with biodiesel, for a decision not to proceed with its investment.“Oil companies are being incentivised to import ethanol. That makes it utterly uneconomic to invest in the domestic biodiesel plant we were proposing to build,” Posnett said.He also questioned why the government was overlooking a plentiful local supply of raw products for biofuel.Argent Energy would consider proceeding with the plans if the New Zealand government worked toward making all bio-fuel equal in terms of tax and subsidies, he added. While New Zealand has some gas fields, almost all of its vehicle fuel is imported. The government wants at least 3.4 per cent of fuel sold to be biofuel by 2012. Argent produces around 50 million litres of biodiesel from its Motherwell plant a year, supplying fuel companies throughout Britain for biodiesel blends.Last July, Argent abandoned plans to float on London’s AIM market, after earlier indicating that it planned a listing which would have valued it at around £70m.