Shell and Argent Energy plan for biodiesel at the pump

Shell New Zealand is delighted to announce it has signed a letter of intent with Argent Energy New Zealand Ltd in preparation for meeting the new biofuels sales target announced by the New Zealand Government today.

The biofuels sales obligation will see the mandated introduction of biofuels commencing in 2008, with the aim of 3.4% of the total fuel sold in New Zealand to be biofuel by 2012.

"As the world's largest distributor of biofuels, Shell can see real benefit for future energy supply and carbon mitigation by increasing the use of quality biofuels in the New Zealand market," said Jim Collings, General Manager, Shell New Zealand.

"Shell sees the delivery of high quality biofuels, produced as much as possible from local sustainable sources, as a critical element to the successful introduction and customer acceptance of biofuels. However, it is recognized that to meet the government's required mandate, importation of some product will be required."

"Argent has an international reputation of delivering technology that is versatile enough to meet the demands of the New Zealand heavy and light vehicle diesel fleet."

Mr Collings added that Shell would need to deliver both biodiesel and bioethanol products if it is to meet the government's 2012 sales obligation.

"Developing biofuels to become a sustainable alternative to conventional fuels is an important focus for Shell. Shell is continuing to work through what infrastructure requirements are needed to meet the government s sales obligations. We are actively trying to minimize what cost impact the delivery of biofuels will mean to consumers."

Dickon Posnett, Argent Energy New Zealand's Managing Director, is pleased New Zealand's oil industry recognises high quality biodiesel will be vital. He says its work with Shell to supply biodiesel to New Zealand consumers will add to its other work in international markets.

Mr Posnett says the government's announcement is important if biofuels are to be taken seriously as a means of helping provide a secure fuel supply, reduce carbon emissions and encourage private investment in the sector.

New Zealand's oil industry had been responsive and now Argent Energy's feasibility study on establishing a biodiesel plant in New Zealand can be completed.

Work to date has identified potential sites for a plant that would be capable of processing 75,000 tonnes of raw material a year to produce 85 million litres of biodiesel. The use of that biodiesel would displace more than 300,000 tonnes of carbon dioxide, the main gas responsible for global warming.

The plant would use tallow - animal fat that is waste from the meat processing sector - as feedstock. Mr Posnett says sophisticated laboratories at the heart of its Austrian designed plants helps ensure all output meets EN 14214 2004 - the European standard for biodiesel.

"New Zealand's recently introduced biofuel standards will ensure the market gets the benefit of top quality biofuels, " he said. "Argent Energy's UK operations already achieve those standards and I can't see any reason why drivers here in New Zealand won't be just as keen to fill up with this renewable fuel."

"Most major vehicle manufacturers and agriculture machinery producers are now producing new models with specifications for biodiesel. However, New Zealand's existing diesel vehicle fleet and agricultural equipment will be able to operate from day one on the blends that will result from the biofuels sales obligations."

ENDS

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