UK firm reaps profits from 'green fuel' plantations

A UK producer of green fuel from a seed traditionally used as a laxative looked to a bright future today as oil prices remained close to record highs.

Newcastle-based D1 Oils said its plantations of jatropha trees were like “oil fields above the ground” and profits were expected following a harvest in 2007 or 2008.

The aim is to produce biodiesel that can power cars, buses and lorries travelling on UK roads, although production is at an early stage.

D1 has 10,000 hectares of the crop planted in India and said its target of 267,000 hectares by the end of 2006 “remains on track”.

Chief executive Philip Wood said the future of the company looked “very good” after the recent rise in the cost of crude oil above $70 a barrel sparked fresh angst over the need to find alternative sources of fuel.

Other factors that were helping D1 included the global battle to cut carbon emissions and a greater sense of responsibility about the employment of the rural poor in developing countries, he said.

Mr Wood said: “Alternative energy sources are a global imperative. Our business addresses the growng worldwide demand for cleaner, lower carbon fuel.

“We are building a global supply chain to harvest jatropha oil from D1 plantations across the developing world and to refine jatropha into biodiesel.”

The company, which floated on the stock market in October and was founded in 2002, revealed today that its losses have widened to £3.1m (€4.5m) in the six months to the end of June against a deficit of £900,000 (€1.3m) last time.

But it said its financial position “reflects the fact that we our building our business and investing for future growth”.

Initial yields are low in jatropha and D1 is working to improve them with the help of expert plant breeders and tissue culture specialists. Simple techniques such as pruning can double the yield.

The company has also secured a £45m (€66m) loan to help Indian farmers plant the crop, and has successfully tested its refineries on other crops such as rapeseed oil.

D1 said that business in India was “moving ahead strongly”, while Indonesia, Malaysia, the Philippines and Thailand showed potential for future plantations of jatropha.

It added that China was “a very promising market” because of the demand for biodiesel, the good growing conditions, and the need to create jobs in rural areas.