Natural Fuel to cease biodiesel production in Darwin?

On 16 November 2007 the ABC reported the following:

Australia’s largest biodiesel plant says it can no longer afford to produce the alternative fuel.

Natural Fuels Limited, which has a $90 million dollar facility in Darwin, says the price of the main ingredient, palm oil, has doubled in the past 18 months.

Spokesman Paul Prass says there’ll be no more production once the company’s palm oil stockpile is used up.

This has not been confirmed in any Natural Fuel Limited (NFL) announcements to the Australian Stock Exchange. However, an announcement on 30 October 2007 explains the pressure palm oil prices are putting on the viability of production.

The NFL Board recognises that recent unfavourable market conditions have put significant pressure on the global biodiesel industry and have severely impacted NFL’s share price. The last six months have seen the price of palm oil – the primary feedstock – jump from $400 per tonne to around $880 per tonne, resulting in a serious downturn in market sentiment.

With the majority of global biodiesel facilities using vegetable oil as feedstock, the rising price of this feedstock has placed considerable pressure on the sector – and NFL is no exception. NFL’s facilities are designed to use a broad variety of virgin vegetable oils givingit significant flexibility in feedstock sourcing and blending to produce biodiesel to international specifications.

The Board is cognisant of these feedstock issues and as such is focused on fast tracking access to lower cost alternative feedstocks, such as jatropha oil. Jatropha oil produces high quality biodiesel with superior cold flow properties.

In a previous post I highlighted the fact that Natural Fuels has partnered with GEM Biofuels Plc for the supply of crude jatropha oil. Ongoing supply of jatropha oil at fixed prices forms the basis of their feedstock risk reduction strategy.

Source: ABC, ASX

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One Response

  1. IT IS AWFUL THAT THE NEW BIODIESEL PLANT IN DARWIN CLOSED BEFORE ,PALM OIL PRICES CRASHED ,OR WORSE BEFORE ENOUGH PONGAMIA PINATA IN PRODUCE IN aUSTRALIA AS BIODIESEL FEEDSTOC
    THIS WOULD BE A NEW AND PROMISING INDUSTRY FOR THE NORTHEN TERRITORY

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