BOSSES at a £250m North-East refinery have called on EU bosses to increase their focus on biofuels and ease a difficult period for the industry.
CropEnergiesAG, which runs the Ensus bioethanol plant in Wilton, near Redcar, says the EU must push harder to cut transport sector fossil fuel usage.
The company says European bioethanol makers' earnings are being significantly hit by volatile prices.
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The firm bought the mothballed refinery last year, pumping £50m into the site, and employs a 100-strong workforce at sites in Wilton and Yarm.
The factory uses wheat to create bioethanol, which is added to petrol by breaking down starch in grains to sugars that are fermented into alcohol and carbon dioxide.
Remaining protein and grain is used to make thousands of tonnes of pig and cattle feed and carbon dioxide for the soft drinks market every year.
It said: “Bioethanol prices in Europe have significantly decreased, and the failure of the EU to pursue its goal to reduce fossil fuels in the transport sector adds to the market environment.
“The continuing discussion in Brussels slows down market growth, and failing to introduce a higher share of biofuels ignores the potential to lower greenhouse gas emissions quickly.
“European bioethanol prices are lower than in Brazil and the US, and even cheaper than petrol in Europe.
“But, due to the fact grain prices have developed a side trend while bioethanol prices have started to decrease, the earnings of European producers has significantly worsened.
“We expect the industry to continue its consolidation, but, as a leading producer, we are well prepared for this difficult time, though the high volatility of bioethanol prices makes the outlook for the financial year more difficult.”
Bosses issued the warning after revealing revenues had grown 13 per cent to £646m from £569m between March 1 2013 and February 28 2014.
Earlier this year, it revealed its North-East factory had spearheaded a rise in work.
It said the regional base had helped increase total bioethanol production to 626,000 cubic metres between March and November 2013, compared with 597,000 in the same period in 2012.
The Ensus plant:
- Production at the factory started in February 2010, with the first tanker of bioethanol shipped to Shell UK a month later.
- However, within weeks, the smell from the plant triggered a storm of protests from residents and the factory was taken offline.
- The odour problems cost millions to fix, and the plant re-opened in May 2010.
- A year later, Ensus was forced into a further shutdown, with bosses blaming lower-than anticipated demand for ethanol across Europe and cheap imports.
- It stopped work again in April last year, citing a poor harvest and rising energy costs for the decision.
- CropEnergiesAG bought the factory in July 2013, but the Ensus name is still used to refer to the site.