[china and britain] green fuels the new fashion
Sunday, November 26, 2006
Green fuels in Britain
Environmentally friendly substitutes for petrol and diesel, long championed by green campaigners, have been commercially available for years. But their high price relative to fossil fuels, along with the expense and inconvenience of adapting cars to run on them, has so far prevented them from penetrating the mass market.
The most striking measure of the new mood of confidence sweeping the industry is that, for the first time, alternative fuel companies are listing on the stock market to fund future expansion. The Biofuels Corporation, based in Teesside, floated on London's AIM market last month, and London-based D1 Oils is scheduled to follow suit in September.
A modified vegetable oil made from crops such as rapeseed, it does not cause climate change since the carbon dioxide generated by burning the fuels is 100% accounted for by the carbon dioxide absorbed from the atmosphere by the plants it is made from. Moreover, when compared with ordinary diesel, biodiesel generates up to 60% fewer environmentally harmful, toxic emissions that cause acid rain and smog.
But biodiesel's biggest advantage over other alternative fuels is that most diesel cars can be easily and cheaply adapted to run on it, without any loss of performance. The main challenge for the biodiesel industry now is to produce the fuel cheaply enough to compete head-on with diesel on the garage forecourt. In the UK, biodiesel currently costs about four pence more per litre at the pump than regular diesel, despite a 20p per litre tax concession introduced by the government in 2001.
It’s too late to worry about the motivation for going into green fuels only starting now – the point is that prices must be low enough so that motorists will go for them. This raises that ugly word Tim Worstall hates: subsidies. May I suggest government subsidy on a diminishing sliding scale over five years just to get the thing up and running?
Which raises the question of the role of government. In a small government economy, is there a place for start-up subsidies to encourage new business of this type?
Environmentally friendly substitutes for petrol and diesel, long championed by green campaigners, have been commercially available for years. But their high price relative to fossil fuels, along with the expense and inconvenience of adapting cars to run on them, has so far prevented them from penetrating the mass market.
The most striking measure of the new mood of confidence sweeping the industry is that, for the first time, alternative fuel companies are listing on the stock market to fund future expansion. The Biofuels Corporation, based in Teesside, floated on London's AIM market last month, and London-based D1 Oils is scheduled to follow suit in September.
A modified vegetable oil made from crops such as rapeseed, it does not cause climate change since the carbon dioxide generated by burning the fuels is 100% accounted for by the carbon dioxide absorbed from the atmosphere by the plants it is made from. Moreover, when compared with ordinary diesel, biodiesel generates up to 60% fewer environmentally harmful, toxic emissions that cause acid rain and smog.
But biodiesel's biggest advantage over other alternative fuels is that most diesel cars can be easily and cheaply adapted to run on it, without any loss of performance. The main challenge for the biodiesel industry now is to produce the fuel cheaply enough to compete head-on with diesel on the garage forecourt. In the UK, biodiesel currently costs about four pence more per litre at the pump than regular diesel, despite a 20p per litre tax concession introduced by the government in 2001.
It’s too late to worry about the motivation for going into green fuels only starting now – the point is that prices must be low enough so that motorists will go for them. This raises that ugly word Tim Worstall hates: subsidies. May I suggest government subsidy on a diminishing sliding scale over five years just to get the thing up and running?
Which raises the question of the role of government. In a small government economy, is there a place for start-up subsidies to encourage new business of this type?
posted by James Higham at 12:37
1 Comments:
Good point about China and the UK here. I have a friend who was working on Hydrogen fuelcells for his PhD- he's now finished but seemed to think at the time that there was some prospect of that developing to fill some of the gap as well.
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