RTFO, Green Spirit Fuels co-develop in the U.K.

By | February 01, 2006
Things are falling into place for the U.K.'s bourgeoning ethanol industry: abundant feedstocks with waning demand, the newly spawned Renewable Transport Fuel Obligation (RTFO) to achieve government carbon reduction aspirations and the growing domestic awareness of needing more secure energy supplies. According to John Waltham, chairman of Wessex Grain Ltd., these very reasons led his company to start a new value-added business to produce ethanol. That new company is named Green Spirit Fuels.

Formed in June, Green Spirit Fuels plans on procuring wheatthe demand for which has been steadily declining for 10 yearsthrough Wessex Grain for up to three ethanol plants, with the first project well underway in permitting and financing, Waltham told EPM. "The U.K. planning process is somewhat different to that in the U.S.," he said. "Assuming permitting is granted, we plan to break ground [July 2006]." Green Spirit Fuels has already taken in 1.7 million (nearly US$3 million) of developmental funding.

The first refinery will be adjacent to Wessex Grain's 50,000 metric-ton grain storage facility in Henstridge, Somerset. Green Spirit Fuels plans to produce 130 million liters (approximately 34 MMgy) at the Somerset plant, for which Lurgi AG is providing general contracting services and GEA Wiegand is supplying the process technology. Marketing deals for the company's ethanol, distillers grains and carbon dioxide haven't been solidified yet. "In all three cases, negotiations are at an advanced stage with significant market players," Waltham said. The Somerset plant will take in approximately 330,000 metric tons of wheat per year, and those wheat farmersthrough Wessex Grainwill continue to possess a significant holding in Green Spirit Fuels.

According to Waltham, Green Spirit Fuels has targeted November 2007 as a start-up date.

The RTFO became law in July. It originated as an amendment in the 2004 U.K. Energy Bill. "It gives us the tool to enable us to aim to achieve the EU target," Waltham told EPM. "[The EU target] is currently indicative but will become mandatory if the EU Commission feels that some countries are not achieving reasonable progress towards achieving the targets."

The RTFO, which requires renewable fuels to make up at least 5 percent of all transport fuels sold in the U.K., is slated for implementation in 2008 with an expected full compliance by 2010, Waltham said.

-Staff Report