3/23/2005 - Greenergy Fuels Ltd, a fuels business with annual sales of £1billion and a leader in the supply of premium quality biofuels, announcedtoday that it has joined forces with shareholder Tesco to service therapidly growing European biofuels market. The partnership with Tesco willenable Greenergy to extend its existing domestic and European biodieselsupply operations by building the UK's largest single-line biodieselproduction facility.
Capitalised at over £10 million and scheduled to open Q2 2006, subject tothe usual consents, the plant will initially have 100,000 tonnes per annumproduction capacity. Its intended location at Immingham on the HumberEstuary will allow cost effective distribution across the UK and intoEurope with supply of rapeseed, the main oilseed for the facility, securedunder existing contracts with the UK farming community.
Andrew Owens, Chairman of Greenergy Fuels Ltd commented: "We are pleasedto announce that funding is now in place to build this plant and that weare on schedule to open Q2 2006. At a time when supply constraints areleading to high oil prices, and there is increasing Government focus oneffective and immediate reductions in carbon dioxide emissions, lowcarbon, renewable biodiesel offers a vital part of the solution.
"Used as a blend in standard fuel mixes, biodiesel can provide security ofsupply through UK sourcing, and reduce the greenhouse gas emissionsrequired if climate change commitments in the transport sector are to bemet."
The announcement comes as the Government makes tackling climate change akey objective of its G8 and EU Presidencies, with the renewable fuelbiodiesel central to the Government's strategy to reduce transport-relatedcarbon emissions. Biodiesel already benefits from a duty incentive in theUK and a Renewable Fuels Obligation looks set to stimulate demand further.
At the same time the European market, in particular France and Germany, isexperiencing rapid growth in demand driven either by mandated use or bylow or zero fuel duties, coupled with a shortage of plants able to delivercost effective processing and distribution.
Daniel Quinn of Tesco added: "We are very pleased that our partnershipwith Greenergy has resulted in the development of the UK's largest singleline biodiesel plant. Shoppers have asked for our help in buying moreenvironmentally friendly high performance fuel. The availability ofGlobalDiesel at 23 Tesco stores across the UK means many customers can dotheir bit for the environment. This new plant will help the growth of thebiofuels market in the UK."
Discussions are underway with potential partner investors including LouisDreyfus, the global agricultural commodity and energy trader, andGrainfarmers, the UK's largest farmer owned arable business and one of themerchants offering the Field to ForecourtÆ contract to buy rapeseed fromUK farmers for biodiesel production.