Friday, May 11, 2007

Driving the market

Last year, the government announced that it would be imposing a biofuels sales obligation on New Zealand oil companies, requiring them to sell an escalating percentage of biofuels, starting at 0.25% next year and building up to 3.4% in 2012. The aim was to push the market in a greener direction. And it seems to be working. Argent Energy had already announced its interest in a tallow-biodiesel plant in Northland, and Solid Energy has just announced that it will be buying Canterbury Biodiesel and expanding it into producing biofuel from canola. Between them, these two companies will be able to meet 75% of New Zealand's 2012 target. With a number of other companies also working on biofuels (LanzaTech from flue waste gases, BioJoule from wood, AquaFlow from sewage, and Steve Tindall on corn ethanol) it looks like the targets will be met. The question in a couple of years time then will be how far and how fast they can be expanded.