The Irish biofuel industry has said financial difficulties experienced by a global bio-diesel supplier do not undermine the business case for biofuels.
British-based Biofuels Corporation plc announced on Monday that €60 million in loans outstanding to Barclays Bank was to be converted to equity, in effect, the bank taking over 94 per cent of the company.
Just last year, the company was flying high, when then-Prime Minister Tony Blair opened its new Seal Sands plant at Teesside, one of the world's largest biofuel plants. But now the company's trading facility on the AIM market of the London Stock Exchange is to be cancelled, leaving investors - some of them Irish - facing considerable reductions in their investment.
One of those investors, and a recent secretary of the Irish Bioenergy Association, Tom Bruton, told The Irish Times, however, that the difficulties related to financial management, rather then the fundamentals of the industry.
"It is really more of a finance story than a biofuel one," he commented, adding that the company continued to trade.
Mr Bruton said that while the industry was in its infancy, it was logical that some operations would be more successfully managed, but he was confident that the necessity to secure renewable energy and reduce greenhouse gases would ensure the future viability of biofuels.
"The difficulty we have in Ireland is the issue of excise duty exemption," he remarked.
While biofuels can be produced in Ireland and assist in energy security, as well as helping to reduce greenhouse gases, they are generally more expensive to produce than fossil fuels. Because of this, the Government has exempted some six million litres of biofuel from excise duty - currently about 44 cent a litre.
However, this amount has been described as "derisory" by the Irish Road Haulage Association (IRHA), which has also complained about the process by which the licences to sell the biofuel are awarded.
IRHA spokesman Jimmy Quinn said six million litres would be used "by hauliers on the Cooley Peninsula alone" in one year and called for "a complete examination of the way those who are not producers of biofuel have been given licences to sell it".
