Ineos shelves plans for £65m biodiesel plant in Grangemouth
Monday 08 December 2008
Plans for a £65 million biodiesel plant in Grangemouth in Scotland have been shelved by petrochemicals firm Ineos Enterprises as a result of the current economic climate.
But, a giant energy-from-waste plant being developed by sister company Ineos Chlor is still going ahead, the company said today.
Chemicals and biofuels companies across Europe are experiencing a period of "unprecedented volatility and uncertainty" in prices at the moment, the company explained.
Our current strategy is now focussed on developing new capacity through acquisition or collaboration.
Ineos said it was acting to clamp down on costs because it was currently "extremely difficult" to make economic predictions.
A statement issued by the company regarding its overall position said: "Given the continued and prolonged global economic downturn INEOS is focussing on tight control of costs and expenditure across its entire portfolio. It has made significant savings in fixed costs and has cut back on all non-essential growth capital expenditure."
Grangemouth
Despite having planning permission in place, the facility planned for a site at Bo'ness Road, near the Ineos oil refinery, has been put on "indefinite hold", the company confirmed.
The facility was designed to produce around 500,000 tonnes of biodiesel a year from vegetable oils, but the company said the project will not now be taken forward "until such a time when the economic conditions improve".
The plant was to have had two equal-sized production units, with around half the total production destined to be used in blending with oil products from the Ineos refinery.
With the project shelved, Ineos has told the Scottish Executive that it does not expect to draw on the Regional Selective Assistance award granted for the project in 2007.
Asked whether it had been the economic slowdown or the recent fall in oil prices that led Ineos to withdraw from the project, a spokesman for the company told New Energy Focus this afternoon that there was "no single factor" involved, "just the general economic situation".
Ineos has stressed that the decision does not mean it has abandoned biofuels activities entirely. The company continues to operate a biofuels facility at Baleycourt in France, which has been recently expanded to double production levels.
The company's statement read: "INEOS Enterprises remains committed to biodiesel and our current strategy is now focussed on developing new capacity through acquisition or collaboration, therefore at present investments in new build are on hold."
Energy-from-waste
The belt-tightening within Ineos will not affect the £300 million energy-from-waste plant being developed for its Runcorn site, the company's spokesman told New Energy Focus today.
That project - which could turn out to be Britain's largest energy-from-waste plant - is being delivered by Ineos Enterprise's sister company, Ineos Chlor (see this New Energy Focus story).
The spokesman said the Runcorn project was "completely separate" from the biodiesel operation, and insisted it was still going ahead.
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