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Biofuel producer leaves Australia for US

by 5m Editor
5 November 2007, at 11:20am

AUSTRALIA - An Australian biofuel producer has decided to shut down its operations in Perth and Adelaide for more favourable market conditions in the United States, due to soaring feed costs and the lack of government support.

Perth-based Australian Renewable Fuels (ARF) blamed the shut-in of its two plants with a combined capacity of 44 million litres on rising prices of tallow, its main feedstock.

The price of tallow has risen from A$600 (US$552) per tonne to A$900 (US$828) per tonne in the last six months as a result of burgeoning demand from China. "As a consequence, production of biodiesel from [the two plants] has become uneconomic, with no indication of material improvement in feedstock prices in the immediate future," ARF said in the statement issued to the Australian Stock Exchange.

ARF's Chairman Max Ger also lashed out at the Australian government and opposition for paying lip service to the woes of biodiesel producers. Ger told the Australian press the government had granted the company more than A$7 million (US$6.4 million) two years ago to build the plant in Adelaide, but subsequent changes to the Fuel Tax Act made it "virtually impossible" to sell biofuel because incentives for users had almost dried up. A legislative change last year made it impossible for users of biodiesel and mineral diesel blends to claim the A$0.36 (US$0.33) a litre tax rebate.

"The federal government made it impossible for us to sell biodiesel to anybody but the oil majors," Ger said.

However, oil companies, with the exception of Caltex, were indifferent, or "mildly hostile" to biodiesel users, who relied on the oil majors to develop distribution networks, he added.

Source: EnergyCurrent



5m Editor