Greenergy on lookout for partner
GREENERGY, THE UK low-emissions, transport-fuels supplier, needs outside investment to maintain its success, says its chairman, Andrew Owens.
The launch of new products and diversification into new business areas continue to boost sales at an exponential rate. Owens expects Greenergy's turnover to reach a record £250m ($390m) in 2003—roughly double its expected turnover this year and almost four times the £70m it reported in 2000 (the last year figures were published). But he says direct investment from another source, possibly an institutional investor, will be needed to sustain this kind of growth beyond 2003.
"Continuously seeking the right banking facilities and capital becomes a strain, so I think it is necessary quite soon for the company to have some kind of institutional investment," Owens told a press event in late October. This would take the form of an 'equity partner', the company confirms.
Greenergy hopes GlobalDiesel, a mixture of 5% biodiesel—rapeseed oil adapted for engine use—and 95% ULSD, will enable it to consolidate its position in the UK's market for low-emissions fuels. The company says it is the first product of its kind available at UK filling stations.
Greenergy claims GlobalDiesel is significantly less damaging to the environment than ULSD, which it is widely credited with having introduced to the UK and which makes up 100% of the country's diesel market. GlobalDiesel contains 15 parts per million (ppm) of sulphur, compared with ULSD's 50 ppm. Under an European Union directive, all diesel must contain under 50 ppm by 2005.
And Greenergy claims GlobalDiesel results in more economic fuel consumption, a guaranteed 5% reduction in carbon dioxide (CO2) emissions and up to 28% fewer particulate emissions than ULSD.
Independent testing showed a reduction in tailpipe CO2 emissions of only 0.4% compared with ULSD. But the firm claims a reduction of 5%, arguing that rapeseed oil's CO2 content has been taken from the environment and is being returned to it. Conventional fuels add CO2 otherwise not found in the atmosphere, it says.
A further benefit, the company says, is that tax on GlobalDiesel is £0.01 per litre lower than tax on ULSD. Biodiesel is subject to UK duty at £0.20 less per litre than ULSD, applicable to the proportion of biodiesel in the blend. Further tax breaks on biodiesel fuels are likely, the firm says. Existing diesel engines need no modification to take the new fuel.
Despite its environmentally responsible image, Greenergy has no plans to invest in 100% renewable energy. Says Owens: "We don't believe in zero-petroleum-content fuels ... We think that environmentally, commercially and practically, renewable content within conventional fuels is the way forward."
Greenergy plans to produce more products using biofuel, including a gasoline version, and is targeting new market segments.
However, Owens says fuels for non-vehicle purposes offer the best growth opportunities going forward. "If we look at ourselves in three to four years time I think we will be broader than just transportation fuels," says Owens. "We will move eventually into heating and electricity." The company also advises clients on managing carbon assets to minimise environmental liabilities and generate new sources of revenue.