The biofuels industry says that the Government is being disingenuous in its criticism of Solid Energy.
The Government has referred to expensive non-coal energy projects that the company undertook.
Solid Energy's strategy manager Bill Luff told Morning Report on Wednesday that the markets for alternative energy projects - in which the company invested - just didn't materialise.
One of the projects involved biodiesel produced from rapeseed grown by farmers rotating their crop with other land-use.
The Bioenergy Association says the scheme was developed under policies initiated by the previous Labour-led Government to encourage biofuel production.
The association's executive officer Brian Cox says those policies were dismantled in two stages by the present Government and without that help the project was left stranded when it was on the brink of becoming profitable.
But Solid Energy's current chairman Garry Diack says the scheme was not working, even with Government support.
The failure of Solid Energy's biodiesel business has left a once optimistic alternative energy sector nervously eyeing its future.
Though the Bioenergy Association says Solid Energy's biofuels losses were not the company's fault, the demise of that business leaves few alternative transport fuels.
Zed Energy is investigating biofuels but says the project is very challenging.
Another company, Gull Petroleum says biofuels cost more than ordinary fuel, but it is pressing on because of its commitment to alternative fuels.
Gull Petroleum general manager Dave Bodger says there is a similar problem with ethanol-enhanced petrol for cars, and savings on excise taxes are the only thing that sustains that product.
