The troubled £300m biofuel plant in Teesside, England, closed this week, following a string of similar setbacks which have cost operator, Ensus, millions of pounds.
Only weeks after opening in February 2010, the plant was forced to close after problems with an odour emitted from the factory. A further closure occurred in May 2011, with the plant eventually being shut down for a further 15 months.
Ensus bosses say they are “deeply frustrated” but unsure how long the current pause in production would last. The plants problems are symptomatic of wider difficulties faced by producers across the industry, although there are still reasons to be positive:
Slow market for ethanol, both in Europe and America
“Slow development” of the UK and European markets is believed to be the main reason for the Teesside plant’s current closure. Bosses have previously said that foreign imports and subsides are undermining UK competitiveness.
Criticism of first generation biofuels has meant the industry has had to fight hard to maintain its reputation as a viable source of energy. While ethanol’s renewable properties are undeniable, the environmental impact of sourcing fuel from food crops has raised some question marks.
Recent discussions at the European Union have leant towards a cap in the supply of first generation biofuels to half of the EU’s renewable fuel target. Many member nations, however, have complained that they have already invested billions of pounds in first generation technology and production; such political wavering is unsettling to say the least.
In America, ethanol has faced a number of supply and demand side issues. Government subsidies and pro-biofuel legislation has seen the productive capacity of the industry grow substantially in recent years. However, falling demand for gasoline has meant that demand for ethanol/petroleum blended petrol has fallen overall, creating a surplus of ethanol producers and spare capacity; 10 per cent of plants have since closed.
Long lasting droughts across America have also seen corn crop yields fall hugely; this has led to ethanol being prohibitively expensive and less popular among consumers. Similar problems have also been seen in Europe:
“In the UK the poor wheat harvest in 2012 has also had an adverse impact on the quality and price of the feed wheat feedstock used within the plant, while rising gas prices have pushed our costs up considerably,” said Ensus’ chief executive Peter Sopp.
“Ensus is deeply frustrated by the slow development of the UK and European markets, given that it manufactures a highly sustainable product – bioethanol – and that it makes a major contribution to reducing greenhouse gas emissions and increasing the UK’s energy and food security,” he added.
Reasons to be positive
Despite some challenges, Ensus hope that the market for biofuels will pick up in Europe. Their plant has the added environmental advantage of utilising surplus European wheat production, almost 1.2 million tonnes a year; this reduces the negative impact that biofuel production typically has on food crop supply and prices:
“Ensus is able to supply genuine environmentally sustainable ethanol to satisfy this need but unfortunately market conditions are working against us at the moment,” added Mr. Sopp.
“Ensus remains confident in the long-term future of the business and we believe it is critical that the UK continues to support the use of high quality sustainable biofuels.
“We hope that market conditions can improve and that the plant will become operational again in the near future.”
With investment and research into second generation biofuels growing, it is hoped that the industry will continue to find more efficient and environmentally sound methods of production. The fuel industry is now set up to supply bio fuel and oil tanks all over Europe that can house variations of ethanol and biodiesel. With luck the Teesside plant will reopen again soon and stimulate further growth for the sector.
This article was been written by RPM Fuels suppliers of Fuel Tanks and pumps to the fuel industry. RPM Fuels sells a range of specific equipment for biofuels and biodiesel.