D1 Oils Plc, a developer of bio diesel fuels from jatropha curcas seed, has just signed a deal with Indian-based essential oil producer PManek Biofarms for the supply of crude jatropha oil (CJO) for biodiesel feedstock. The stock closed yesterday at 250 p.

This news comes not long after the company issued a press release knowing of no reason why the stock has fallen so far in the last 3 months. At the beginning of September, the price was around 450p and then dropped quite quickly to 225p. With oil prices where they were in September, one might have expected the reverse movement, because as oil prices rise, biofuels start to look a better bet.

Let's see what happens . . . the company has only been listed for just over a year.

As per my earlier blog about British Biofuels being lifted by the announcement by the government to mandate 5% biofuels by 2010, Argent Energy, the Scottish renewable energy group, which is credited with having created the world’s largest biodiesel plant, is preparing to float early next year. 

The company is already capable of producing 50 million litres - almost equivalent to 5% for Scotland !

So you can see why they welcome the new captive client base that will have to appear in England, Wales and Northern Ireland . . .

Anyone wondering why London-listed Biofuels Corp rose nearly 11% today to 155.33p has missed the government announcement they had long been praying for. . .

Earlier today, Alastair Darling, the UK's Transport Secretary (why does government need a transport minister?) announced that 5% of fuel sold on UK forecourts should come from a renewable source by 2010, adding that the target could be 'much higher'.

Biofuels chief executive Sean Sutcliffe said: 'We believe the target could be much higher and will work with the Government on determining future target levels and on efficient Renewable Transport Fuels Obligation implementation, to help ensure that it stimulates further investments in biofuels in the UK.'

Biofuels Corp has had a rollercoaster ride since it's IPO last year. But thanks to this legislation, it could soon be selling biodiesel into a captive market.