Shares in D1 Oils plunge as talks start on axing jobs · Subsidised American fuel undercuts UK raw material
Jill Treanor
Saturday March 8 2008
The US is flooding Europe with subsidised biofuels that threaten to destroy Europe’s domestic refining market, the head of the biofuel company D1 Oils warned yesterday as its shares lost a third of their value.
Admitting that some 35 jobs could be lost as a result of the cheap imports, Elliott Mannis, chief executive, said: “The simple fact is that you can buy the subsidised American imported material cheaper than you can buy virgin oil for processing.”
Shares in D1 Oils closed 36p lower at 62p yesterday after the company told the stockmarket of its plans to begin consultations with employees at its Middlesbrough and Bromborough, Merseyside, sites about job losses.
“The decision to begin consultations with employees is not one we have taken lightly,” Mannis said. “Imports of heavily subsidised biodiesel fuel from the US, so-called B99, have eroded margins to the point where we have no choice but to consider how to reduce operating costs.
“We are taking this action in order to manage the business proactively in a difficult market,” he added.
Mannis said the EU was trying to negotiate change in Washington and would take the case to the World Trade Organisation, which regulates free trade, but that changes could take months. “If you believe in free trade, this isn’t a fair market.”
He feels it is unlikely that the US will end subsidies to its powerful farming lobby in an election year. The B99 blend of biofuel receives a subsidy in the US and also tax exemption when it is imported into the UK.
The situation is coming to a head because for the fiscal year 2008 (which runs from April 2008 to March 2009), the UK has to meet an EU target for biofuels that requires 2.5% of all fuel sold from pumps to come from renewable sources. Mannis warns that this target will be achieved by cheap US imports rather than from firms such as his making biodiesel.
As an example, it costs about $1,200 (£600) to buy a tonne of B99 but $1,400 to buy soya to convert into biofuel, which in turn costs $150 a tonne to process.
“It’s about the price,” Mannis said.
The company, based in Middlesbrough, employs 120 staff in total but Mannis was at pains to point out that the troubled refining business was not the core part of its operations. He believes the most important is planting jatropha, a drought-resistant tree which has seeds that can be used to produce non-edible oil for use in heavy diesels or be refined to high specification fuel. This is supposed to help address concerns about biofuels competing with crops grown for food.
The company, chaired by the former Shell chairman Lord Oxburgh, has a joint venture with BP to plant the crop in various parts of the world.
This part of the business was unaffected by yesterday’s announcement, which helped to reassure some analysts. Not all were convinced though. “If the company finally closes the facility [at Bromborough] it would be a big blow to the hopes of the biodiesel industry in the UK and, indeed, the EU, as well as costing D1 in terms of reputation and cash,” said analysts at the brokers Ambrian.
http://www.guardian.co.uk/environment/2008/mar/08/biofuels.oil
This article appeared in the Guardian on Saturday March 08 2008 on p38 of the Financial section. It was last updated at 00:02 on March 08 2008.
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Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
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