13 February 2009

Solid Energy confirms biodiesel to proceed with limited expansion to 4 million litres a year

Solid Energy company Biodiesel New Zealand is proceeding with its development plans, increasing capacity at its existing Christchurch facility to 4 million litres a year but, in recognition of the economic conditions, is reviewing its next planned step to 15 million litres a year.

Over the next year the biodiesel business will complete the first stage of a new facility at Rolleston, near Christchurch, enabling the drying, cleaning and storage of up to 10,000 tonnes of locally grown rapeseed. Expanding production capacity at the existing plant in Christchurch from 1 to 4 million litres will allow more time to consider the optimum timing, size and location of any future biodiesel production site.

Andy Matheson, Solid Energy’s General Manager Renewable Energy, says while the biodiesel business is continuing to expand, Solid Energy is taking a prudent approach in light of the recent fall in the price of fuel, including conventional diesel.

“Biofuel pricing is tied closely to its conventional equivalent but we believe this recent sharp dip is only temporary. Solid Energy has not changed its outlook that the price of energy, and particularly imported energy such as fuel, will continue to increase in real terms over the long term,” Mr Matheson says.

Biodiesel New Zealand is now producing approximately a million litres of biodiesel a year which, until now, has primarily been made from recycled cooking oil. March will see the completion of the firm’s first commercial-scale harvest of rapeseed grown for it by South Island farmers and, in future, oil from energy crops will make up an increasing proportion of the feedstock.

Contract offer to farmers

Farmers who have already grown oilseed rape on contract or who have expressed an interest in adding it to their crop rotations are now being contacted with details of the contract offer for 2009 autumn-sown crop. Andrew Simcock, Biodiesel New Zealand’s General Manager, believes the $700 plus GST a tonne contract price will encourage cropping farmers to include it among their crop rotations. It has not yet been decided what extent of contracted crop would be sought.

“This latest harvest involved several thousand hectares, comprising a mix of more marginal land leased by the company and contracted growers with more fertile land. Most of the crop was in Canterbury which had a particularly dry growing season and it’s meant we’ve had a pretty wide range of yields,” Mr Simcock says.

“More than 20 oilseed rape cultivars were sown with the aim of learning more about ideal combinations of soil type, weather, plant variety and crop management. As well as getting out and talking to people about new contracts, we’ll be passing on the lessons that have been learnt and, by targeting the most suitable soil types, climate profiles and plant cultivars, we expect to see improved yields per hectare in a year’s time.”

ENDS