Global Diesel

A Biodiesel Magazine Q&A with Greenergy's Donna Clarke
By Julie Bratvold | July 01, 2004
Biodiesel Magazine: Greenergy-it's an interesting company name. Tell us what the company does, and who it serves.

Clarke:
Greenergy is the United Kingdom's leading importer, blender, trader and marketer of petrol and diesel. Greenergy is also a major player in the UK biodiesel industry. As an established oil company with links to the agricultural community and a leading environmental brand, Greenergy is ideally positioned to exploit the biodiesel market through the construction of a biodiesel plant. It has the experience and infrastructure allowing it to handle the diesel as well as the biodiesel component of biodiesel blends and benefits from established relationships with the petroleum oil majors. Greenergy's trademarked biodiesel blend, GlobalDiesel, is marketed through supermarket forecourts (retail gas stations) and sold to a range of corporate and public sector fleet users.

Biodiesel Magazine : How does Greenergy market and sell its products?

Clarke: Greenergy does not undertake direct marketing. Our main customers are supermarkets, other oil companies, independent fuel distributors and large-end users, such as bus companies. Because of the high profile of Greenergy's branded product, GlobalDiesel, on supermarket forecourts, Greenergy is now well- known as a leading supplier of low-emission fuels and differentiated fuel products.

Biodiesel Magazine:
Tell us a little more about GlobalDiesel. What is it, and how does it differ from other biofuels?

Clarke: GlobalDiesel is a liquid fuel. Its components are currently 95 percent ultra low sulfur diesel (ULSD) and 5 percent rapeseed methyl ester (RME) biodiesel. Greenergy guarantees that the greenhouse gas emissions from GlobalDiesel are 5 percent lower when compared to ordinary ULSD sold in the United Kingdom on an Adjusted Whole-of-Life (AWOL) basis. The Whole-of-Life basis incorporates greenhouse gas emissions from feedstock production through to combustion-from "well-to-wheel."

The 5 percent greenhouse gas emissions reduction of GlobalDiesel is achieved by the RME biodiesel portion of the fuel and by applying emission reduction certificates known as Carbon Assets. Greenergy estimates that, for the period from Jan. 1, 2002, to March 31, 2003, the RME biodiesel portion contributed a 2.7 percent greenhouse gas emissions reduction. Therefore, in order to guarantee the 5 percent reduction, Greenergy has allocated and retired carbon credits for each delivery of GlobalDiesel to make up the remaining 2.3 percent.
No other biodiesel blend offers both Carbon-Certification (a trademarked product qualification), a guarantee on carbon reduction and supply chain environmental and quality assurance.

Biodiesel Magazine: Are you able to verify your claims about GlobalDiesel?

Clarke: The GlobalDiesel Carbon System is independently verified by KPMG, a financial advisory company. Our GlobalDiesel Carbon System auditors are from KPMG. Their verification statement can be found on our Web site at www.greenergy.com.

Biodiesel Magazine: Greenergy moved into the biodiesel industry only recently. Would you say this was a natural progression for the company? What spawned the decision to move into renewable fuels?

Clarke:
The Kyoto Protocol provides the framework for global greenhouse gas emissions reduction, which has created opportunities for lower carbon products, particularly in the energy and transport sectors. In the transport sector, considerable emphasis has been placed on improving vehicle fuel efficiency and alternative technologies, such as fuel cells. However, it is biofuels that offer an immediate short- to medium-term opportunity to lower the carbon intensity (carbon dioxide emissions per unit of fuel combusted) of fuel. Biofuels are therefore a natural progression for Greenergy as we understand and have considerable expertise in both introducing new fuels to markets and carbon markets. Our mission is therefore to:

-Create and sell innovative Carbon-Certified fuel products that combine the scale and convenience of conventional fossil fuels with the environmental credentials of renewable fuels such as biodiesel or biopetrol.
-Make our Carbon-Certification systems available to suppliers and clients in order to identify and mutually exploit new markets and new business opportunities.

Biodiesel Magazine: For our readers in North America and other parts of the world, briefly describe the climate for biodiesel in the United Kingdom. How would you rate consumer acceptance?

Clarke: There is currently limited production of biodiesel in the United Kingdom. Current capacity is approximately 20,000 [metric tons per year] of biodiesel production from waste cooking oils. A biodiesel plant is currently under construction in Scotland and is expected to come on line in the first quarter of 2005. This will produce 50,000 [metric tons per year] of biodiesel and the feedstock will be mainly animal fats (tallow). Another plant in Teeside is expected to come on line in late 2005; the feedstocks will be imported palm oil. The Greenergy biodiesel plant proposal is for a 100,000 [metric tons per year] plant on Humberside. Our feedstocks will be mainly rapeseed oil and some waste cooking oils. We hope to be operational in the first quarter of 2006.

Sales of biodiesel are currently 2.5 million liters per year, much of which is imported. GlobalDiesel sales indicate that the motoring public in the United Kingdom welcomes the opportunity to have a fuel available with lower environmental impact. The 5 percent blend level, at which there is no requirement for any engine modifications, is an important factor in promoting the uptake of blended fuels. Improved engine efficiency (e.g., mpg) has been reported by a number of users of the fuel.

Biodiesel Magazine: Please tell us more about Greenergy's proposed biodiesel plant.

Clarke: In April Greenergy announced plans for the UK's first multi-feed biodiesel plant on Humberside. The GB£10 million (US$18.35 million) plant will have the capacity to produce 100,000 [metric tons per year] of biodiesel, making it one of the largest such plants in Europe.

Biodiesel Magazine: What challenges has Greenergy faced as it moves into the biodiesel industry?

Clarke: The main challenges we have faced is educating consumers that biodiesel is a quality product and, when used in a B5 blend, will not harm their vehicles. There has also been a degree of education with the government, in particular on how the oil industry and the biofuels industry can work together to lower the carbon intensity of the United Kingdom's fuel supply chain.

The United Kingdom has "incentivized" biofuels through the introduction of a duty incentive so that the duty on biofuels is lower than that for standard fuels. However, these duty incentives are not as favorable as elsewhere in Europe, such as Germany where biodiesel and ethanol are "zero-rated." Greenergy is of the view that the duty incentives should be improved for biofuels as this would result in rapid market penetration of biofuels and would also provide the platform for rapid expansion of a biofuels production industry in the United Kingdom.

Biodiesel Magazine: Tell us more about Greenergy's involvement with carbon credits.

Clarke: The Kyoto Protocol sets a framework for global carbon trading. Carbon credits are the currency of carbon trading markets; they are generated by projects that reduce carbon compared to a baseline. For example, if you replaced a coal-fired power station with a wind turbine, the project would generate carbon credits.

The 5 percent biodiesel in Greenergy GlobalDiesel is of lower carbon intensity than normal diesel. However, on an AWOL basis, the carbon reduction is between 2.7 percent to 3 percent. Greenergy adds carbon credits purchased on carbon markets to make the AWOL carbon reduction 5 percent. In this way, we can guarantee that GlobalDiesel achieves a 5 percent carbon reduction when compared to standard diesel.

Biodiesel Magazine: What is Greenergy's involvement with farmers?

Clarke: Greenergy is seeking to develop a secure supply chain of UK-grown rapeseed to supply virgin oil for its biodiesel plant. To achieve this, Greenergy is working with both farmers and the agricultural supply chain, primarily through grain and seed merchants, to secure oilseed for the plant.

Biodiesel Magazine: What is the "Field to Forecourt" contract? How does it relate to biodiesel?

Clarke: Our trademarked Field to Forecourt contract is the contract between merchants and farmers. In addition, the contract includes Greenergy's requirements for crop Carbon-Certification, our biodiversity guidelines and a rapeseed floor price derived from the relative prices of rapeseed and diesel.

Biodiesel Magazine: How is the Field to Forecourt contract beneficial to both Greenergy and farmers?

Clarke: Greenergy is seeking to put in place a secure supply chain of UK grown rapeseed as feedstock for our biodiesel plant. The Field to Forecourt contract will help achieve this objective. For farmers, biofuels offer an alternative market for crops: oilseed crops for biodiesel, and grains and sugars for ethanol.

Biodiesel Magazine: Greenergy's Web site refers to an "audit trail," which allows the company to track biodiesel all the way back to individual farms. How does the audit trail work? Why is it important?

Clarke: As part of the Field to Forecourt contract, Greenergy asks farmers to submit data that relates to growing and harvesting their crop. We then use this data to calculate the carbon emissions associated with the crop. This data can be verified by an independent auditor. The audit trail is important as it feeds into the GlobalDiesel Carbon-Certification System which enables Greenergy to guarantee the GlobalDiesel 5 percent carbon reduction.

Biodiesel Magazine: Under the Field to Forecourt contract, farmers must meet biodiversity guidelines. What do those guidelines entail? How do they help give Greenergy credibility as a "green fuels" corporation?

Clarke: Customers choose biodiesel over ordinary diesel because of its environmental benefits. Biodiesel is a renewable fuel that cuts carbon emissions. The "green" credentials-and therefore the attractiveness of the fuel to customers-would be undermined if the fuel was perceived to have a negative impact on biodiversity. That is why we ask farmers to work towards a set of "common sense" biodiversity guidelines that many farmers may already respect.
To download a copy of Greenergy's biodiversity guidelines, go to http://www.greenergy.com/field_to_forecourt/biodiversity_guidelines.html.


Biodiesel Magazine: Has the Field to Forecourt contract been successful thus far?

Clarke: The Field to Forecourt contract has been extremely successful. The Field to Forecourt contract for the 2004 harvest was closed early due to the level of demand. Current indications for 2005 are that this will also be the case. We are looking to approximately double the number of farmers from about 500 for the 2004 harvest to 1,000 for the 2005 harvest.

Biodiesel Magazine: In what ways does Greenergy offer its expertise to other companies in the biofuels industry?

Clarke: Greenergy offers its expertise to other biofuels companies in a number of areas including biofuels trading and supply contracts, and consultancy on biofuels markets and Carbon-Certification.

Biodiesel Magazine:
Does Greenergy have interests outside of Europe, say in the United States?

Clarke:
Greenergy has no immediate plans to expand in the United States, but we are keen to discuss with U.S. companies business opportunities including licensing of our trademarked GlobalFuels brands, GlobalDiesel and GlobalPetrol. We are active elsewhere in Europe, in particular in Germany and Switzerland.

Biodiesel Magazine: What's in store for Greenergy, both short-term and long-term?

Clarke: The biodiesel plant is our main immediate priority, as well as increasing the availability of GlobalDiesel on petrol forecourts from 25 sites to over 200. In 2005, we are also planning to launch GlobalPetrol, a trademarked ethanol-gasoline blend.
 
 
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