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Last Updated: Tuesday, 3 October 2006, 00:16 GMT 01:16 UK
Biofuels bring green air to Teesside
By Bill Wilson
Business reporter, BBC News, Teesmouth

Biodiesel tanks
Biofuels Corporation is at the front of moves towards cleaner fuel

Industry on Teesside has often been stereotyped as one of fume-belching chemical works set among miles of futuristic metal tanking, towers and pipes.

And indeed, the region is famous for its chemical industry developed over the course of the 20th century, and started with the production of nitrates for explosives in World War One.

Ammonia, fertilisers, plastics, alloys, fuels, and other compounds all followed.

But since the turn of the millennium the trend has been to shed, rather than add chemicals jobs.

Now, instead of churning out fumes that contribute to global warming, the region is home to a cluster of firms encouraging a more environmentally friendly way of living.

The shining pipe work, such as those at Biofuels Corporation, look the same, but are now part of a national drive to reduce the UK's carbon dioxide emissions and encourage greener fuels.

Carbon concerns

Biofuels Corporation's 250,000-tonnes-a-year facility at Seal Sands, Teesmouth, the biggest of its type in the UK, was officially opened by Prime Minister Tony Blair, in June.

"We hope that we can play our part in reducing the carbon dioxide emissions of the road transport sector, " says the company's chief executive, Sean Sutcliffe.

"Renewable transport fuel is an important part of the UK's overall climate change strategy, and biodiesel has the advantage of reducing carbon emissions.

Field of oil seed rape
Oil seed rape: coming to a fuel tank near you soon

"At present the good work being done in the UK power sector to reduce carbon dioxide output is being undermined by the transport sector. We are behind countries like Germany and France in using bio-friendly fuels."

According to a UK government report, between 1990 and 2004 emissions of carbon dioxide - the main greenhouse gas - increased in the transport sector by 10%, mainly due to an increase in road freight.

That is where it is hoped biodiesel will play its part. The product being made on Teesside is an environmentally-friendly diesel that can be blended with traditional mineral diesel to make a cleaner fuel.

Like all new companies we stand or fall on the quality of our product
Sean Sutcliffe, chief executive, Biofuels Corporation

The final blend is one of 95% regular diesel and 5% rape seed, soya or palm oil.

All cars can use the 5% blend without modification and some models have been adapted to take a diesel blend containing a bigger proportion of the biofuel.

Mr Sutcliffe believes that proportion can quite easily be increased to 10%.

"We are not asking the public to change what they are doing now. They can fill up as usual, except from now on we hope more diesels at the pump will be a biofuel blend," he says.

'Major companies'

The government's target, announced last year in response to a European directive, is to have 5% of road transport fuelled by biofuels by 2010.

It is hoped that using the 5% blend in cars will be enough to reduce the UK's emissions of carbon dioxide, by more than 1% by 2010.

Sean Sutcliffe, chief executive of Biofuels Corporation
Mr Sutcliffe has a background in the energy industry

"We are selling to major oil companies in the UK and Europe - including in Germany and France - and our biodiesel is getting into their supply chains," says Mr Sutcliffe.

"There has been reluctance from some of the oil companies to use the blended fuel, but they are now seeing that it is technically excellent."

The company's existing customers include refinery companies and distributors in the UK and mainland Europe.

The firm, which employs 50 people, floated on June 2004 when it raised funds to build the plant, and is listed on Alternative Investment Market.

Mr Sutcliffe joined at the start of 2005, having previously worked for BG Group, joining a team with background in the oil and gas industry, which took over from the original Biofuels founders.

I hope we are ahead of the game
Sean Sutcliffe, chief executive, Biofuels Corporation

However, getting Biofuels Corporation up and running was far from smooth, and problems still remain. In July the firm announced full year losses of 72.9m.

The 45m plant was hit by cost overruns and has not yet hit full production.

"Last year was about getting up and running, this year production is going ahead, with the emphasis that we produce best quality fuel," says Mr Sutcliffe.

"Like all new companies we stand or fall on the quality of our product.

"We have got debt to service and shareholders looking for returns, as we get up towards full production levels and get into a cash positive position."

'Ideal base'

The company is raising another 7.2m to double the size of its operations on Teesside as the market for biofuels grows.

"Teesside is the ideal place to be based," Mr Sutcliffe says.

"It has a good port, good workforce, land for the second plant, and good back-up services.

Tank at Biofuels Corporation site
Biofuels Corporation wants to build another plant at Seal Sands

"We are looking to build further plants here and are investigating what technology and contractors to use. Biofuels are what the future of Teesside is all about."

However he declines to predict how much fuel the firm expects to make during 2006, except to say that capacity is being increased month-by-month.

The futuristic plant is now operating at more than 90% of capacity and Mr Sutcliffe remains confident his firm has a strong position in the brave new biofuels world recently endorsed by Ted Turner and Sir Richard Branson.

"I hope we are ahead of the game," he says.

"Everyone agrees that radical steps in the UK transport sector are now needed."




SEE ALSO
Biofuels 'answer' to trade talks
25 Sep 06 |  Business
Biofuels: Green energy or grim reaper?
22 Sep 06 |  Science/Nature
Biofuels look to the next generation
18 Sep 06 |  Science/Nature
UK 'lacks ambition' on bioenergy
18 Sep 06 |  Science/Nature
Biofuel raises global dilemmas
17 Jan 06 |  Business

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