FT. Ineos has cancelled plans to build four biodiesel plants in Europe. In a statement, the company said that it remained committed to biofuels but was cutting back on “all non-essential growth capital expenditure” in the face of the “continued and prolonged global economic downturn”.
Ineos Enterprises, a leading global manufacturer of refined petroleum products and basic, intermediate and speciality chemicals, said in 2006 that it was targeting at least 2 million tonnes (about 604 million gallons US) biodiesel output by 2012, with some 1.2 million tonnes by 2010. (Earlier post.)
The four proposed plants —at Antwerp in Belgium, Lavera in France, an undecided site in Germany, and at Grangemouth—were intended to come on stream over the next three to four years, with a combined capacity of about 2m tonnes per year: roughly 40,000 barrels per day. Plans for all four were “on hold until Ineos has a clearer picture of the economic outlook”.
Ineos last week said it was seeking a waiver on its banking covenants after suffering a steep fall in demand from industries such as housing and motor manufacturing, and a loss on its oil inventories caused by the steep fall in prices. It has scaled back capital expenditure for next year from €650m to €250m (£209m).
In April, Ineos Enterprises entered into an exclusive strategic partnership with Viridas PLC (Viridas) to develop significant growth in the sustainable output of Jatropha. Ineos had intended to bring to the partnership a significant outlet for Jatropha Oil through its strategy to become a leading global biodiesel supplier.