Z Energy Puts Biofuel Plant to Sleep, Asks for Govt Money

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May 13, 2020

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by Eloise Gibson (Stuff) Z Energy is “hibernating” its biodiesel plant but may re-open in a year. –Z Energy has put its Auckland biofuel plant to sleep after a bidding war broke out for the fatty animal waste it runs on.

Fourteen people’s jobs will be lost, while Z looks into selling the fuel overseas to earn a higher margin. A further five employees will keep their jobs.

In a move chief executive Mike Bennetts described as “one last roll of the dice” for the factory, the fuel retailer has applied for $10 million in post-Covid-19 recovery funding to double the size of the plant. Doubling capacity would make the cost-per litre cheaper and allow the factory to break even, Bennetts said.

But with Z Energy among 1800 “shovel-ready” applicants to the Government’s post-Covid infrastructure fund, Bennetts said he wasn’t overly hopeful of winning out over projects promising to create many more jobs.

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An overseas bidder who is making and selling biofuel for the United States market has driven up the cost of New Zealand tallow, a fatty animal by-product from meat processing, which the Z plant uses to make biodiesel, said Bennetts.The biodiesel was sold to the likes of Fonterra and New Zealand Post, who were keen to begin greening their fleets.

With the cost of tallow almost doubling, the company has decided not to re-open the factory when the country moves to Alert Level 2.

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The company argues biofuel should be part of the transition to electric, zero-carbon transport, because the fuel can be used today, even in older vehicles.

“It’s a quick way to get carbon reduction,” Bennetts said.

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Bennetts said a mix containing 5 per cent biodiesel reduced emissions by about 4 percent compared with full fossil fuel, after factoring in the emissions created in the tallow’s lifecycle. READ MORE

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