Biodiesel producer, Ecodiesel, is raising another $4.5 million capital to complete its full-scale commercial plant in Onehunga
A $4.7 million pilot plant is already operating, producing biodiesel from tallow (an animal by-product) it sources from the meat processing industry.
Chief executive Gary Brockett said the plant was a staged development and would eventually supply retailers with 20 million litres of biodiesel a year – only part of the 3 billion litres of diesel consumed a year in New Zealand.
New Zealand biodiesel and fuel company standards only allow 5% blend of biodiesel in retail sales. “But that’s 5% worth having,” Mr Brockett said.
The company said biodiesel had similar characteristics to conventional petroleum diesel but was clean burning and biodegradable – reducing greenhouse gas emissions by as much as 85% when made from environmentally sustainable feedstocks.
The Green Party is proposing a Biofuel Sustainability Bill to create standards for biofuel production, to ensure it is not made from food crops or ways that destroy animal habitats. The bill requires biofuels sold in the country from next May to be approved under certain criteria.
Unlike some biodiesel products, the Ecodiesel products used animal by-products (waste) from meat processing plants, rather than using crops or other food resources.
He said Ecodiesel believed New Zealand consumers were increasingly interested in how renewable fuels can complement mainstream fuels.
Biofuel (bioethanol) was introduced to the pumps in New Zealand through petrol retailer, Gull, but the country was the only one in the OECD that did not offer biodiesel at the pump.
Some companies, including Solid Energy, produce biodiesel for tourism, fishing or fleet operating companies, but not for general petrol retailers.
Mr Brockett said that while Ecodiesel’s product was the only viable product on a commercial (retail) scale for the next few years, New Zealand had a lot of potential for smaller renewable energy opportunities.
Mr Brockett said 40% of the plant was paid for and consents had mostly been granted. “We’ve got over a lot of hurdles and unknowns. It’s less risky now that we have validation, trialled retail sales and a pilot plant operating and producing a quality product.”
The company is issuing a $4.5 million fixed rate convertible notes offer. The notes are unsecured, subordinated, fixed rate debt obligations, with interest paid at 15% a year, maturing in September 2014.