SCOTLAND’S ONLY operational large-scale bio-diesel plant is to be part of a flotation on the Alternative Investments Market, writes Ewan Pate, the farming editor. Argent Energy plc has been operational since March 2005 at a site near Motherwell and is now an important outlet for animal by-products. Along with used cooking oil, the plant uses tallow from the rendering industry to produce 45,000 tonnes of bio-diesel per annum.

It is intended that capital raised by the flotation of the company will help fund a much larger plant producing 150,000 tonnes per year at Ellesmere Port, Cheshire. There are also plans to possibly extend the operation to New Zealand with a 75,000 tonne per year business.

Argent’s chief executive Andy Hunter said, “Argent Energy is an established waste-to-energy bio-diesel business with a focused strategy and significant growth potential.

“We have an experienced management team and our first plant, which is currently producing a weekly average of approximately 90% of the plant’s name-plate production capacity, has been operational for more than two years.

“The group has a strong balance sheet, is generating cash from the Motherwell plant, and is now ready to move on to the next stage of its strategy which the new funding will enable it to do.”

These are ambitious plans but the company say they are based on the strong demand for bio-diesel and the relative cheapness of the feedstock which would otherwise be waste products and a cost on the livestock industry.

Former National Farmers Union of Scotland president Jim Walker is heavily involved with Argent Energy. He was initially vice-chairman of the company but is now styled as trading director and vice-president of Argent Energy (UK) Ltd, the trading arm of the business.

He has frequently been an outspoken critic of bio-fuel production from arable crops, believing that the feedstocks—oilseed rape for bio-diesel and wheat from bio-ethanol—are simply too expensive compared to tallow and waste cooking oil.

This point is repeated in the prospectus for yesterday’s launch which states, “The directors believe that the prices of tallow and used cooking oils have been, and will continue to be, driven and benchmarked against energy prices compared to virgin vegetable oils prices which the directors believe have been, and will continue to be, primarily linked to their demand from the food and feed industries.”

They may well be correct and with wheat prices having risen by £7.75 per tonne last week alone it seems that the markets are only moving in one direction.

Additionally Argent believe that the demand for bio-diesel is set to grow and will be encouraged by two political initiatives. Firstly, duty rebates for bio-fuels are set to increase from 20 pence per litre to 35ppl by 2008-09. Secondly the Renewable Transport Fuel Obligation will require fuel from renewable sources to be no less than 5% of the total by 2010.

It all looks very promising. Farmers and slaughterers will be hoping that the expansion of Argent Energy will lead to an added value for tallow which has in the past often been an inconvenient waste product.

Alistair Donaldson, executive manager of the Scottish Asociation of Meat Wholesalers welcomed the expanding opportu- nities from tallow use.

“The abattoir industry is carrying enormous costs as a result of BSE and the more that can be done to put value back into by-products—the so-called fifth quarter—the better,” he said.

“Around half the tallow produced is burned on site at abattoirs to fuel boilers. Of course it is a clean, green fuel. The balance is sold but the price of tallow has in fact dropped in recent months from around £130 per tonne to £70 so I hope there is to be a new demand.

“The other by-product which could potentially be a fuel source is meat and bone meal, once sought after but now a waste product.

“The Scottish meat industry produces around 1200 tonnes of meal per week. It has 70% of the energy value of coal and if it could be co-fired in power stations its value would be approximately £50 per tonne. There are complications with burning waste products but I am sure they could be overcome,” said Mr Donaldson.