D1 Oils says BP JV raises cost estimates of biodiesel, says still
LONDON (Thomson Financial) - D1 Oils PLC said it has raised its cost
estimates for jatropha biodiesel feedstock to 575 usd per tonne from
475-500 usd, following a study with new joint venture partner BP PLC,
but added this is still very competitive compared with other feedstocks.
Chief executive Elliott Mannis told reporters on a conference call the
company thinks 'it is sensible to take a slightly more prudent view on
in-country logistics, or the logistic costs in the country of origin'.
'The target price for landing oil in northern Europe is probably more
reasonably stated at 575 usd per tonne,' he said, adding this was still
'extraordinarily price competitive', with rapeseed currently over 900
usd/tonne and soya pushing towards that level.
Mannis was speaking after the announcement this morning of a joint
venture agreement between D1 Oils and BP to invest 80 mln stg over the
next five years to plant 1 mln hectares of jatropha for use in biofuels.
D1 is contributing its planting business to the new joint venture
company, which at June 23 included planted or rights of offtake from
172,241 hectares in India, Southern Africa and South East Asia.
Biofuels have come under increasing scrutiny as demand for competing
feedstock like corn and soya drive food prices up.
While jatropha avoids this pitfall as an inedible feedstock, there is
still the issue of carbon emissions related to transporting and refining
the product, which in some cases is argued to cancel out the intended
benefits of using renewable fuels.
Mannis said the host countries where the jatropha is grown 'have the
same concerns as we do -- security of energy supply and reducing their
He added the company does not expect to export more than 50 pct of the
jatropha to Europe, with a substantial proportion remaining in the
country for refining and distribution. firstname.lastname@example.org ks/am
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