French Biofuel Sector in Race for New Output Target
Date: 13-Oct-05
Country: FRANCE
Author: Muriel Boselli
The sector has welcomed the government's stated aim to be Europe's leading biofuel maker by 2010, when all fuels should contain seven percent of the cleaner-burning alternatives, but says much still needs to be done to achieve the goal.
"For ten years we battled to obtain production capacity and got nothing, and now everything is happening at once," said Xavier Beulun, president of oilseed growers association (FOP).
FOP and its financial arm Sofiproteol own over half of Diester Industrie, the main biodiesel producer in France.
As traditional fuel prices have rocketed, interest in biofuels has mushroomed around the world. France, the biggest agricultural producer in Europe, believes it is well placed to take advantage of the new "green gold".
Biofuels in France are divided between biodiesel largely made from rapeseed which is then blended with diesel and ethanol, a combustible fuel made from beet or cereals which can be blended with conventional fuel.
Oilseed growers are gearing up to take the lion's share of the production increase.
"We are today producing around 400,000 tonnes of Diester (biodiesel) per year and our output capacity from 2008 will reach at least 1.5 million tonnes," Beulun said this week at a press conference to announce plans for Diester Industrie's new plant on the western coast of France at Montoir Saint Nazaire.
"And that could even go up to 1.7 million tonnes," he added.
The plant, with a capacity of 250,000 tonnes will start by mid-2007. US agribusiness giant Cargill will adapt its existing crushing facility in Saint-Nazaire to help supply the plant.
FIXED PRICE
France has announced plans to launch a tender later this month for 1.8 million tonnes of new biofuel capacity in order to reach its 2008 production target. The farm ministry has said this would be split between between 1.33 million tonnes of biodiesel and 465,000 tonnes of ethanol.
Diester Industrie plans to bid for at least 600,000 tonnes in the tender.
"Other companies will have to bid for the rest because we won't be able to go further than that," Beuleun said.
But to reach full capacity, Diester Industrie said it needed to secure long-term supplies from rapeseed growers by raising the fixed price farmers receive.
"One important thing we're doing is fixing the price we buy rapeseed at 240 euros ($287.5) (per tonne) for 2005 crop which is above the Euronext (French futures) level and five euros more than last year," Philippe Tillous-Borde, director general of Sofiproteol said.
November futures are now trading below 230 euros.
But Beulun, who is also a rapeseed producer, said the price should be raised quickly to secure supplies.
"It is important the price should reach 260 euros quickly as we have to pay farmers on a long-term basis," Beulun said.
