Biodiesel New Zealand manager Paul Quinn said Solid Energy established the company in 2007 and, after a trial crop last year of about 700ha, has contracted farmers from Southland to Canterbury to grow more of the biofuel feedstock.
Oil-seed rape was easily grown and known as a break crop, grown to break grain-crop rotations for soil health and pest benefits, so it would not interrupt the production of food. Mr Quinn
said 25,000ha was not a large area considering the amount of grain being grown.
said recent increases in grain prices meant Biofuel NZ had to offer higher contracts to get the volume.
"Commodities have all gone through the roof, so we have to pay for it," he
Another issue was the Government's biofuels policy.
The Government has signalled intentions to make fuel companies supply a portion of biofuel, a move Mr Quinn
said was essential to create a biofuel industry.
"If we are the only company to go ahead, we will not have an industry - just one big company."
Oil-seed rape biofuel was top quality, he
said, and restored some of the performance values lost by diesel's low sulphur content.