O2Diesel yesterday closed up another 15% at 0.84. Clearly something is happening but I can find no news anywhere to explain these large movements. Even in this volatile sector, this scale of volatility is exceptional . . .
O2 Diesel, a company that plans to break into the US diesel market with an optimal blend of ethanol and mineral diesel, closed tonight at 0.73, up 37.7% from 0.54. So what's going on?
We're now at very close to $70 per barrel for oil. The higher the price goes, the more the alternatives start to be priced in; even corn-based ethanol for blending in with diesel.
Will be interesting to see what happens to the stock tomorrow.
Biofuels Corporation Plc has had a torrid few weeks;
Shares suspended from trading during negotiations with Bankers and Equity Providers over funding
Restored to trading today and then a massive 32% drop in the share price in one day to 100.23 from 149.5.
All this has been happening while the Government recently announced a new biofuels obligation which should be doing the sector no end of good. The company's website says "Our strategy is simple, deliverable and profitable" - but it really doesn't look like that right now . . .
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.
Yesterday, Amex listed O2 Diesel closed down 8.3%. The company aims to break into the US diesel market, which powers 94% of US freight, with an optimal blend of ethanol and mineral diesel. These additionally tuned oxygenates will remove many of the harmful pollutants that typically come from diesel.
Many parts of America such as California have demanding air quality standards which ought to encourage the take up of 02 Diesel.
But it's a tall order to design and implement a complete supply and refuelling programme. They are however exploring the military market and there's plenty of political support for the growing use of ethanol in America.
Definitely one to watch . . .
Despite her big movie combacks in the Kill Bill films, Daryl Hannah has revealed that saving the planet is more important to her than making movies. Not only does she have a solar-powered home, she drives a 100% biodiesel car.
Biodiesel is a lean burning alternative diesel-like fuel produced from energy crops which produce vegetable oil, tallow or cooking oils. Diesel fuel for passenger cars is virtually non-existant in America and biodiesel, even less, so this is very unusual. Diesel exists in the USA to power freight transport. And one listed company, O2diesel, hopes to turn a significant portion of that into biodiesel. Their target market is refueling for bus, trucks and off-road fleets.
So where does Daryl Hannah get her biodiesel from?
The American Midwest has made money out of farming hogs / swine the 19th Century, leading to the creation of the first modern futures markets. Now there's a new angle, trading the Greenhouse Gas Emissions that come from Pig Manure. And Agcert, a leading Bioenergy Company listed on London's Aim shows the way. Since going public in June, the stock price has risen from 140p to 230p today, valuing the company at around $500 million.
In an interview with yesterday's Sunday Telegraph, Al Tank, Agcert's CEO, described as "a compact farm boy from Iowa with an unnerving knowledge of pigs . . . and a crisp, clean, white collar", set forth his vision. Amongst several salient points, there was even a China Story - "Half the world's pigs are in China, which is a unique opportunity," says Tank.
What's particularly interesting here is that 20% of world GHG emissions are from Agriculture. Why?
Because methane - from farm animal manure - is a 20 times more powerful GHG than Carbon Dioxide. Moreover, captured methane can be burnt to provide heat and electricity, whereas CO2 can only be sequestrated at considerable cost.
So there you go. Now you know the true value of methane.
Having gone public last year in June 2004, UK Aim-listed Biofuels Corporation has struggled since April due to delays in bringing production on line. The company is building biodiesel processing plants.
Yesterday however, the stock had a great day yesterday surging 39 to 184p after the biodiesel group confirmed its Teesside plant is on schedule. The group said it has sold 64pc of start-up production and has a strong lists of leads in respect of a further 25,000 tonnes per month - more than three times the 7,500 tonnes per month remaining to match full production.
This is important because the company could now be judged to have sufficient sales contracts to commence full production at its new Teesside plant on schedule by the end of September.
Biodiesel in Europe seems poised for expansion due to non-binding EU targets of 20% blend of biofuels into petroleum fuels by 2020.
