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A report has been published on Friday 28 October 2005 on a study undertaken by the Scottish Agricultural College (SAC) Consultancy Division on the potential for a Biodiesel industry in the north and east of Scotland.

The report was commissioned by a partnership comprising Aberdeenshire Council, Angus Council, Fife Council, The Highland Council, Moray Council, Perth & Kinross Council, Highlands & Islands Enterprise and Scottish Enterprise Energy. A main aim of the study is to identify the means of optimising the value of the oilseed rape (OSR) crop to growers in the study area, which produces around 75% of the OSR grown in Scotland.

CAP reform has decoupled subsidies from production and farmers are now more exposed to market prices, which in the cereal sector, have shown marked decline in the last decade. While oilseed rape has been a useful break-crop within the rotation, comparison of net margins between cereals and oilseeds are altering, due to world market prices and growing demand for oilseeds for the biofuels industry.

The report identifies a number of key issues which require to be addressed before any production infrastructure could be developed with confidence and the partners are inviting feedback from stakeholders over the next three months. The study is expected to stimulate extensive discussion in the agricultural, fuel and associated industry sectors, particularly as Scotland has potential to produce oilseeds with a high oil content, but farmers lose significant value of their crop due to the transport costs to processing plants in England or overseas.

The report titled ~The Economic Evaluation of Biodiesel Production from Oilseed Rape Grown in North and East Scotland~ can be obtained from the Consultants at SAC Craibstone Estate, Aberdeen. The report is available on-line at http://www.highland.gov.uk/plintra/planpol/biodiesel/biodiesel.htm 

Commenting on the report's publication, Councillor Ian Ross, Chairman of The Highland Council's Sustainable Development Select Committee said: "The Highland Council firmly believes that we all need to do much more to reduce our fossil fuel consumption and biodiesel could play an important part in this. Due to the nature of The Highlands we are more dependent on diesel fuels for both transport and heating than many other parts of Scotland and one benefit of biodiesel is that in most situations it can be used by existing vehicles with no need for engine modification.

"We've known for some time that there is nothing technically difficult about producing biodiesel from oil-seed rape but until now nobody had looked closely at the economic feasibility of using local sources of oil-seed rape to produce biodiesel in the North of Scotland.

"This is a very full report which raises a number of detailed issues and we will be taking a close look at some of these before meeting back with our other partners in this study to discuss what the next step should be."

Against a backdrop of Common Agricultural Policy (CAP) reform, farmers now have opportunity to consider different cropping patterns, be more market focused in choice of enterprises and look to new markets.

Main drivers for considering biofuels include the European Directive for the target of 5.75% use of biofuels in road transport by 2010, the UK Treasury 20 pence per litre tax concession, environmental factors ~ energy balance, potential impact on arable production as result of CAP reform ~ greater flexibility in choice of cropping enterprises and the increasing customer demand for biofuels etc.

Current biodiesel production in the UK is well below the level to achieve the targets and UK production lags well behind mainland Europe, in particular Germany and Austria.

The technology for biodiesel production is well established. Biodiesel can be used as a 5% blend, or as a straight fuel. At 5% blend, biodiesel can be used without any modifications to the engine and existing vehicle warranties are not affected. The non mineral oil component of biodiesel is carbon neutral, ie: carbon dioxide released during the generation of energy is balanced by that absorbed by plants during their growth.

The principal objectives of the study include:
An assessment of OSR production in the north and east of Scotland and identification the volume of the OSR crop that could be utilised in a biofuel project.

Optimisation of the value of OSR crop to farmers in the north and east of Scotland, through its conversion to Rape Methyl Ester (RME)

Economic appraisal of the viability of small and medium scale processing plants in terms of the wider rural economy, through adding value, minimising transport costs and optimising local rural employment.