China Biodiesel, in a disturbing echo of Biofuels Corporation's basic inability to deliver plant on schedule, has just announced that in the second half of 2007, turnover will be affected by the consequence of delays in building the extension to the plant in Longyan and the delay in completing the new plant in Xiamen.

I don't want to comment (because I don't know) about all the capital sources of China Biodiesel's expansion plans. But the big picture is that if we are moving into a global credit crunch, or at least a period of tighter money, one might want to take a hard look at all alternative energy companies that are engaging in an investment-led rather than organic expansion.

When credit is cheap, some companies are wont to invest and expand like crazy. Other companies are however more sanguine and take a longer view of the business cycle, choosing to expand out of profits. So which of these approaches works best?

Both and none of them - it's just that no strategy works continuously forever. The econosphere is a constantly evolving race without a finish, fuelled by the shifting sands of the capital markets. In other words, what works well today may not do so tomorrow and even lose money the day after.

And I have a sneaking suspicion that the progress in electrical transport just might in a few years, leave biofuels high and dry.

When starting this blog, I knew it would happen eventually; a listed alternative energy company would fail and have to be taken off the stockmarket and of course off AEI.

Tomorrow, Biofuels Corp will have its trading facility cancelled on the AIM market of the London Stock Exchange, effective from 07:00. Henceforth, the company will be trading under the name of Earls Nook Limited.

So here are my post-mortem thoughts on Biofuels Corp, which as you'll see from the 1 year chart, has lost a lot of money for its investors.

1. The company name was wrong - you can't brand yourself with a generic term, especially when their core business was biodiesel, a small part of the global biofuel industry. Imagine calling microsoft the software company.

2. I have severe doubts about companies going public without a business up and running in place already. Biofuels Corp was a development company. Couldn't they have seen a VC instead?

Venture Capitalists are active managers and owners, sometimes taking a seat on the board, in exchange for a sizeable chunk of equity, proffering valuable management advice and firing when need be. Fund Managers and retail investors who provide capital on the public market are manifestly not in this category. In reality, the IPO comes as the crowning glory, the final stage or the exit for a company, not as the seed capital.

3. The idea behind Biofuels Corp in principle was sound - Europe has high biofuel targets in place, and most of the contribution will probably be met by biodiesel as the relevant feedstock crops grow better there.

So au revoir Biofuels Corp - for AEI, you were the first, but you won't be the last to go . . .