Biodiesel
Not a very good year, but a prospect for improvement
In 2007, our biodiesel unit started up as one of four Belgian production centres. However, the biodiesel market hardly took off for lack of effective government measures, turning 2008 into a disappointing biodiesel year. But was it all doom and gloom?
European objectives state that by 2010 5.75 % of marketed diesel should be based on biological raw materials. In France this number is currently over 5 %, in Germany 4.9 %, with Belgium lagging behind with 1.15 %. The root cause consists of the legislator not holding a big stick to force diesel resellers to add biodiesel. There is some tax exemption in place, but this has hardly had any effect. The import from dollar countries has also had a negative impact, in spite of the European Union protesting against competition distortion: even with transportation costs included, biodiesel from the USA was cheaper that ours.
(Not) an issue: food or fuel?
In 2008, biodiesel was very much part of the food vs. fuel discussion, but the so-called rice war proved that there was hardly any link between the use of agricultural crops for bio fuel and increasing food prices. After all, rice being the food commodity that went up in price most cannot be used as a bio fuel. Yet Proviron remains in search of raw materials and derivatives that transcend this discussion as it fits in with the sustainable long term strategy of the company.
Good news
What do the figures tell us? In 2008, Proviron sold about 12 million litres of biodiesel, but this is only about 10 % of the installation’s annual capacity. Start-up problems and teething troubles were mostly removed in 2008 – now the company is waiting for experience with a prolonged use of the installation at full capacity. Proviron has high hopes that this may become reality in 2009 as in April of this year the Belgian government declared it intended to make obligatory to add at least 4 % of biodiesel as of July 2009.
Regrets?
Somebody asked us a while ago whether we did not regret our biodiesel investment. That was before the news of the favourable governmental decision. But even then our answer was ‘no’. The biodiesel production is not an end in itself to Proviron – it remains a logical leverage to explore the world of renewables on the basis of existing strengths. As a consequence, Proviron has to be financially viable even without biodiesel earnings in order to survive when biodiesel market conditions are poor. In favourable biodiesel years, the extra income will provide for a welcome surplus.