Ethanol - The UK market

Compared to other EU countries, the UK Government has done little to reduce tax and introduce other financial incentives to help spread ethanol beyond a handful of sites.

Despite the lack of support, UK bioethanol business Green Spirit Fuels, is building the UK’s first grain bioethanol plant in Somerset. Once complete in 2007, the plant will convert 340,000 tonnes of wheat into 131 million litres of ethanol each year.

Since August 2005, Ford has only sold 100 of its Focus Flex Fuel cars predominantly in and around Somerset. This mainly due to the actions of the UK Government, who has reduced duty by 20p per litre. However, production costs are high and ethanol is only a penny per litre cheaper in the UK than standard fuel. In Sweden it is a third cheaper.

With more support and more refuelling points, Saab and other European car manufactures says that they will consider bringing flexi-fuel cars to the UK. But currently there is no real market for ethanol propelled vehicles.

In November 2005, transport secretary Alastair Darling revealed his Renewable Transport Fuels Obligation (RTFO).

Darling has proposed that 5% of all UK fuel sold comes from a renewable source by 2010. This represents a twenty-fold increase over today’s sales.

With the potential to slash carbon dioxide emissions by one million tonnes – between 2-3% of transport emissions and the equivalent of taking one million cars off the road – the motivation for the RTFO is clear.

To meet the 5% target, the primary petrol producers are tying up with food manufacturers to build bioethanol plants using food waste - unusable cereals, sugar beet crop waste etc.

BP and ABF (Associated British Foods) have built a bioethanol plant at BP's chemicals site at Saltend in Hull, and is scheduled to be in operation by late 2009. It will produce 420m litres, or 330,000 tonnes, of bioethanol a year. The plant will run on low quality wheat. ABF typically has a surplus of this wheat, which is currently turned into animal feed.

A major plant being built at Teesside is due to start producing 400m litres of bioethanol a year, from mid 2009. The entire output has been contracted to Shell.

The biggest producer of E85 in the UK is Harvest Energy (was Futura Petroleum). The company supplies approximately 5% of all road fuels used in the UK.

No really, as long as we continue to rely on imported ethanol from Brazil. Satisfying the 2010 biofuels target without using exports would require around 1.5 million hectares of land, around one third of the current arable area under cropping in the UK.

This calculation is based on producing 2.5 - 5 tonnes of ethanol per hectare, using enzymes and a new processing method named: 'lignocellulosics'.

Not utilising cheap imports would have a significant impact on the country's ability to produce sufficient cereal crops and basically feed itself.