Biodiesel

A British company wants to set up a plant in Northland to make Biodiesel. For those unfamiliar with the technology, biodiesel is renewable fuel made from any animal or vegetable oil or fat - in this case, from waste animal fat. While it runs normally in any diesel engine, it's normally mixed with ordinary diesel to make a blended fuel.

Mixing biodiesel into fuel in New Zealand would be a good thing from a sustainability point of view, and it would help meet our obligations under the Kyoto Protocol. Unfortunately its more expensive than petrodiesel, and so it just isn't going to happen economically. Which is why the British are wanting either a market guaranteed by regulation, or a big fat subsidy to set up.

We have another option though: carbon credits. Biodiesel is carbon neutral (all the carbon in it originally came out of the atmosphere), and using it would meet the same aims as the renewable energy projects the government currently subsidises this way.

Of course, carbon credits might not be enough to make the project financially viable - in which case we can afford to wait a few more years. Other companies (notably meridian Energy) have also studied biodiesel production in New Zealand, and may come up with a better and more economically viable plan.