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Last Updated: Monday, 16 January 2006, 09:06 GMT
Car firms and investors greet UK biofuel
By Jorn Madslien
BBC News business reporter in Taunton, Somerset

It has long been known - and not only by environmental enthusiasts - that bioethanol made from, say, the grains otherwise used to make whisky is perfectly suited as an automotive fuel.

Racing driver Fiona Leggate
Ms Leggate wants bioethanol to become a mainstream fuel

"You drink the best and you drive the rest," quips Graham Hilton who works for Wessex Grain's bioethanol subsidiary Green Spirit Fuels.

Racing drivers have been using it for years, and many of them swear by it.

"It's best for the environment and it doesn't lack power," says British touring car racer Fiona Leggate, who races a biofuel-powered Vauxhall.

"I'd love to see it as a mainstream fuel."

The future of motoring

It is a vision shared by Somerset county councillor Paul Buchanan, who is involved in an ambitious biofuel experiment where local police will drive a fleet of 40 Ford Focus cars powered by as much as 85% bioethanol made from locally grown grains.

Saab Biopower
The Saab Biopower is more powerful than its petrol equivalent

When the BBC took a biofuel Focus around the Somerset countryside it felt no different from driving an ordinary model, though finding the fuel is pretty tricky.

But this might gradually change.

From March this year half a dozen supermarket forecourts - in Taunton, Bridgwater, Bristol and Shepton Mallett - are preparing to supply the E85 biofuel under the Somerset Biofuel Project, an initiative which is seeking the "sustainable distribution of a locally grown, environmentally friendly fuel", according to Mr Hilton.

While this type of project is just the start, Mr Buchanan expects they will be "driving the sustainability agenda".

Environmentally friendly

Bioethanol made from grain produces 65% fewer greenhouse gases than petrol, according to the UK government agency Central Science Laboratory.

There is the capacity to mobilise capital to build infrastructure to produce and distribute biofuels, and once you get the scale, the cost will come down
Graham Meeks
Climate Change Capital

This is largely because the amount of carbon dioxide emitted during the production and consumption of ethanol is "almost equal to that removed from the atmosphere when crops for conversion are being grown", according to Saab Great Britain.

"One hectare of wheat produces about 29,000 miles of motoring, enough to take a car around the equator and still have 4,000 miles of fuel left," adds Green Spirit Fuels

"The oil companies and the big car companies will be driven down this road by the consumer," says Mr Buchanan.

Converted cars

To a limited extent, it is happening already.

Some supermarket forecourts already mix ordinary petrol or diesel with biofuels, so that 5% of what drivers put in their tanks is bioethanol made from plants or trees.

And the practice is set to pick up pace after the government announced its Renewable Transport Fuel Obligation last autumn, which states that 5% of all motorcar fuel must come from renewable sources by 2010.

The way it has been positioned as a solution to UK motoring is naive
Biofuel industry official

But in order to move beyond this 5% target, cars must go through a relatively cheap conversion that essentially involves replacing rubber seals and aluminium parts with materials that are not eroded by the bioethanol, explains Andy Taylor, Ford Europe's director of corporate citizenship.

Both Ford and Saab have unveiled bioethanol-enabled models for the UK market, which can run on pure petrol, or any mixture of petrol and bioethanol up to 85%, if E85 is not available.

Saab says its E85-enabled 9-5 Biopower, which costs just 600 more than a standard 9-5, has the potential of reducing carbon dioxide emissions by 70% while at the same time improving the car's power.

E85's higher octane rating adds 30bhp to the 150bhp turbocharged engine, and a 15% gain in fuel efficiency can be had at high speeds, said Kjell ac Bergstrom, chief executive, of Saab Automobile Powertrain.

"Turbocharged engines are particularly well suited to the benefits of ethanol," Mr Bergstrom says.

Potential profits

Such confident swagger is turning heads in the world of finance, according to Graham Meeks of Climate Change Capital, a specialist merchant bank.

Racing driver Fiona Leggate
Racing drivers have been using biofuels for years

"We're seeing an enormous amount of interest from investors in this sector," he says.

"The outlook is fairly positive," Mr Meeks insists - even though "there is some way to go in improving yields from crops", and despite bioethanol remaining a more expensive option than petrol due to "the cost of technology and the cost of feed stock".

In the near future, the biofuel industry can expect ever more support, both the government and from Brussels, as politicians look to both diversify fuel supply in order to improve fuel security, and to meet agreed reduction targets for carbon dioxide emissions, he predicts.

"There is the capacity to mobilise capital to build infrastructure to produce and distribute biofuels, and once you get the scale, the cost will come down," Mr Meeks says.

This is the first of two features exploring the rise of biofuel in the UK. The second feature investigates what it will take for bioethanol to become a mainstream fuel, and who stands to profit from the process:




SEE ALSO:
Europe biofuel plans under fire
12 Jan 06 |  Business
More Brazil cars run on alcohol
11 Jan 06 |  Business
Go-ahead for 20m biofuels plant
29 Nov 05 |  Norfolk
Garden of England could fuel UK
26 Sep 05 |  England
Farmers cash in on bio-fuel market
15 Sep 05 |  Northern Ireland


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