A split is never an easy thing to go through. All that dividing the CDs, working out who takes the cutlery and the books, scratching eyes out of photographs (only recommended for those who really don’t take these sort of things well) and solace in heavy drink and copious unattractive weeping. So Greenbang extends a sympathetic Kleenex to biofuels company D1 Oils, which is ditching its refining business.
The reason behind the split? The classic ‘it’s not me, it’s the US subsidised imports’, which apparently are making it too hard for D1 to carry on.
CEO Elliott Mannis had this to say about the break-up:
2007 brought significant challenges for the biofuels industry, including rising feedstock prices, growing concerns on sustainability and imports of heavily subsidised US biodiesel. […]
Refining food-grade vegetable oils into biodiesel in Europe has developed into a highly competitive market in which only very large scale operations are viable. We therefore intend to withdraw from this business and propose to close our UK refining sites. We believe that the best way to deliver value for shareholders is to leverage our technology and experience in jatropha to focus the business on the upstream breeding, planting and managing of new varieties of sustainable, commercial biofuel crops. Our upstream plant science and related technologies, always core to our vision and business, will now be our main commercial thrust.
To help heal the scars of the break up, D1 will carry on with experiments on biofuels based on atropha curcas. crop, This year will see 50,000 hectares of the jatropha seedlings planted, through a joint venture with BP, cunningly called D1-BP.
Here’s more from the annual report on how jatropha is going:
Jatropha planting expanded significantly throughout the year, particularly in North East India where the partnership with Williamson Magor, one of India’s leading tea companies, planted more than 50,000 hectares in the current season. Total planting by Williamson Magor now stands at over 62,000 hectares. Planting in South East Asia also expanded steadily during the year, and new relationships were established with new partners, including PT Astra Agro Lestari, part of the Jardine Matheson Group. Progress in Africa was slower, and flooding and low germination rates due to the poor storage and transportation of seed led to the failure of a proportion of planting in Zambia.
The experience of poor germination and other general agricultural risks had led to a thorough review of existing assets and their likely performance now that growing conditions are better understood and planting is more mature. As experience has increased it is possible to assess more accurately the quantity and quality of successful jatropha planting and recognise where planting has failed or where suppliers lack sufficient reliability. As a result, provisions have been recorded against planting, the majority with third parties with whom there are arm’s length supply agreements for grain and oil, that is either unlikely to deliver the requisite quantity and quality, or which is too far from available logistics facilities to make harvest and transport viable.