1 Sep 2012

Biodiesel company sell off shocks growers

12:26 pm on 1 September 2012

Solid Energy's decision to sell off its Biodiesel New Zealand subsidiary has rocked the growers who have been supplying it with rapeseed oil.

The company processes and sells edible oil pressed from rapeseed and produces biodiesel from the recycled cooking oil which it buys back.

About 30 farmers, mostly in the South Island, are growing rapeseed for the company which has become the country's biggest biodiesel producer.

Growers' group chairman Jeremy Talbot says the decision to sell or shut down the biodiesel business comes as a shock after Solid Energy assured them just a few months ago it was in it for the long haul.

Mr Talbot, a South Canterbury farmer and contractor, says it sought a meeting with Biodiesel's chief executive and board chairman of the board in March this year to discuss the long-term prospects of the organisation.

He says that was denied and instead growers were told in a meeting with lower management that the organisation was there for the long term and that there was adequate funding and capital in place for the business to proceed.

Mr Talbot says on that basis more crops were grown.

While growers have been told their contracts for this year's crop are safe, they've made a long-term commitment to grow oilseed rape and are are hoping someone will buy the biodiesel business.

Scrapping of subsidy final straw

Earlier this year, the Government ended the grant scheme which paid biodiesel producers 42 cents a litre for the fuel they have been making from rapeseed or canola, used cooking oils, and tallow from meat plants.

Biodiesel New Zealand agribusiness manager Nick Murney says that made a marginally economic business unviable.

He says although more farmers have been supplying it, the company's processing plant has been operating at one third of its potential capacity.