Pure biodiesel in city pumps likely

Pure biodiesel could be sold from pumps in Dunedin and Queenstown after a funding boost from the Government, the man co-ordinating two biodiesel supply consortiums says.

Biodiesel blend sales have surpassed expectations in Queenstown and may soon be bolstered by pumps in central Dunedin and Green Island, Otago Polytechnic Centre for Sustainable Practice manager Steve Henry said yesterday.

A just-announced move to extend the Government's year-old biodiesel grants scheme, which offers a 42.5c-a-litre subsidy, to cover diesel blends including more than 20% biodiesel would make supplying 100% biodiesel in both markets even more attractive, he said.

"We need the subsidy at the moment for it to be cost-effective for the producer, and then for us. Let's not lose sight of the fact that this is a start-up industry, and the environment continues to show us it needs the help it can get."

Plenty had changed since the Queenstown Lakes Biodiesel Consortium launched New Zealand's first biodiesel refuelling station in March.

The emissions trading scheme had been extended to cover fossil fuels and many big users of fuel had a stronger "corporate direction" to move to biofuel.

Passenger transport and tourism businesses were increasingly seeing the benefits of being associated with a cleaner alternative.

The Queenstown refuelling station pilot scheme had shifted "many thousands of litres" to progress "even better than we'd expected".

Some of the owners of the 38 vehicles involved reported improved engine performance and positive feedback from passengers and clients, he said.

The Dunedin group, which was set up at a meeting of 30 big diesel users in May, had just advertised for tenders to supply refuelling stations in Green Island and in the central city.

Tenders closed in early August and Mr Henry confirmed he expected "things to move very, very quickly after that".

Some in the Dunedin group used more than a million litres of fuel each year. Mr Henry expected the 20% biodiesel, which would only be available for consortium members, to be similar in price to the cost of diesel.