How bio-fuels could help us in a crisis

PAUL Temple pushes through a field of shoulder-high oilseed rape and twists one of the plants back to show me. The yellow flowers on its head which give the crop such a distinctive colour in spring have been replaced by long green pods.

Paul splits one open, to reveal a row of tiny 'peas' - the rape seeds. In early June they're still green and unripe. By the time the crop is ready to harvest at the end of August they will be black.

"Like little black ball-bearings," he says.

It is these seeds that will ultimately be crushed to produce the vegetable oil that the crop is grown for.

Most commonly, that oil is used in cooking. With just a little bit of commitment in the right places, however, it is perfectly possible that in future fields like this could be the equivalent of a Texas or Saudi Arabian oil well.

Cars are already being produced in Brazil which can run entirely on bio-diesel - that is, fuel made from sustainable crops such as rape seed and palm oil.

Even here in North and East Yorkshire, you can go to some petrol stations (see panel) and fill up on bio-diesel which is partly made from rape and palm oil. True, it is only five per cent bio-diesel mixed with 95 per cent traditional diesel - but even so, it produces significantly fewer harmful emissions than normal diesel.

Paul, who farms near Driffield, has a dream. He would like to see a proper bio-fuel industry established in the UK, so that more farmers could produce crops like this, which could end up in your fuel tank rather than your fat fryer.

It is a sultry early-summer day and the sun is trying to burn through a humid haze. Paul sweeps his hand through his sweet-smelling crop.

"There is all this crop that is harvesting in the sunshine," he says. "The more sun it gets, the better the oil content."

The rape has deep roots, dragging moisture and nutrients up out of the soil and so improving it for other crops; it is grown in rotation with crops such as wheat and barley on a five-year cycle. It is harvested by combine, crushed in UK mills, and the mulch can be used as animal feed. It is, in fact, potentially a perfect renewable energy source.

With fossil oil prices spiralling seemingly out of control, it seems an obvious solution - invest in renewable alternatives that won't use up dwindling fossil reserves and are also cleaner and less polluting.

Yorkshire and the North East would be an obvious place for a bio-fuel industry to take off. The growing conditions in the North East of England are ideal, Paul says - and just up the road at Teesside there is a thriving petrochemical industry.

The trouble is that the will or the joined-up thinking necessary to make it happen do not seem to be in place.

"The Government has no lead department on bio-fuels," says Matt Ware, an expert on non-food uses of crops with the National Farmers' Union (NFU).

The Department of the Environment, Food and Rural Affairs (DEFRA), the Department of Trade and Industry, the Department of Transport and the Treasury all have a hand in defining bio-fuel policy, he says - and they do not all necessarily pull in the same direction.

The result? According to Matt, more than two per cent of transport fuel now used in Germany is bio-fuel, whereas in this country we will be lucky to hit 0.3 per cent by the end of next year.

This situation frustrates Paul, chairman of the NFU's North East Combinable Crops Board.

"There is real potential," he says. "The French and Germans have developed a considerable bio-fuels industry, and what I cannot understand is if they can do it, why can't we?"

Some small British firms, such as Hull-based Rix Bio Diesel, are putting their toes in the water.

Rix uses recycled cooking oil, such as that used by crisp manufacturers, for example, which is normally thrown away after being been used twice. This goes into producing bio-diesel which is available from some petrol stations in the region in a five per cent bio-diesel/ 95 per cent fossil diesel mix. That 95/5 mix reduces car emissions by up to 21 per cent, the company says.

Rix was able to start producing bio-diesel a couple of years ago when the Government reduced duty on bio-fuels by 20p compared to traditional fossil fuels. That cut just compensated for the extra cost of manufacturing bio-diesel compared to traditional fuel - so while it is just about commercially viable to produce, it won't be any cheaper at the pump.

Rix boss Rory Clarke has no doubt about the potential benefits of bio-diesel.

"As a truly renewable fuel (it) has fantastic potential in the UK market place," he says. "Not only is it manufactured from used vegetable oils, it also offers a number of environmental benefits that help to reduce exhaust gas pollution."

But not enough companies are prepared to take the plunge. The bio-fuel industry embraces both bio-diesel for diesel-powered vehicles and bio-ethanol made from sugar beet for petrol-driven cars.

Matt Ware, of the NFU, says such fuels could only take off in this country if large producers such as Shell and BP were prepared to invest in the plant needed to make such fuel.

Without incentives, he doesn't see that happening. The oil companies are raking in the profits - and so why would they want to change?

So what incentives are there? DEFRA says that under the Common Agricultural Policy, farmers producing oilseed rape for bio-fuels can claim 45 Euros per hectare on non set-aside land.

Then there is that 20p reduction in duty. That is not enough, says John Reynolds, Northallerton-based chairman of Northeast Biofuels, a cluster of companies in the region involved in bio-fuel.

The Government has given a capital grant towards a new bio-diesel plant on Teesside, he concedes, which is a help. But what is really needed to kick-start the industry is for the 20p duty reduction on biofuel to be cut still further to 28p.

The NFU is looking to another incentive, which is more of a stick than a carrot. Matt Ware says the organisation has more or less accepted that for the Government to cut duty on bio-diesel would cost it "hundreds of millions" in lost revenue, and is unlikely to happen.

Instead the NFU is pinning its hopes on a new obligation on oil companies to produce a certain percentage of bio-fuel alongside fossil fuel that could become part of British law.

The Government is consulting on exactly such an obligation at the moment, as required by Europe; and the idea is that once a target level is set, companies that fail to reach their obligation would be fined.

In an ideal world, Matt says, the money paid in fines by defaulting oil companies could be ploughed back into the industry - perhaps in the form of cuts in duty.

It could work, except that no one knows what the UK obligation would be - and what the penalty would be for failing to achieve it.

Almost everyone agrees that once a viable bio-fuel industry can get up and running, it will take off. The problem is, getting there.

Ambitious EU targets have been set of two per cent of transport fuel being biofuel by the end of next year, and 5.75 per cent by 2010.

So far, however, despite the efforts of organisations such as Rix and Northeast Biofuels, and of farmers like Paul, we are lagging far behind other European countries and there seems little prospect of those targets being met.

Updated: 10:44 Wednesday, June 09, 2004