UNITED KINGDOM: Oil will grow on trees in BPs latest biofuel joint venture

BP has set up a venture with biodiesel firm D1 Oils to increase planting of jatropha, an oilseed tree that produces an inedible vegetable oil used to make biofuel.

This is the second such deal that BP has signed within days. On Tuesday, it joined forces with Associated British Foods to build a £200m biofuels plant in Hull.

BP will put in an initial £31.75m, while D1 will incorporate its planting business and the trees it has planted to date. The venture requires £80m in funding over five years, and the rest of the money will be put in on a 50-50 basis.

News of the link came as Grain, a charity that promotes the sustainable management and use of agricultural biodiversity, warned that the stampede into biofuels was "causing enormous environmental and social damage". Their report said hundreds of thousands of indigenous people and peasant communities in developing countries were being thrown off their land as biofuel firms needed more and more space for their crops.

Elliott Mannis, chief executive of D1 Oils, said the report did not apply to jatropha, as it grows on land that is unsuitable for arable crops.

Philip New, head of BP Biofuels, added: "As jatropha can be grown on land of lesser agricultural value with lower irrigation requirements than many plants, it is an excellent biodiesel feedstock."

BP and D1 want to plant one million hectares over four years. D1 has a presence in India, southern Africa, and south-east Asia, including China. Mr Mannis said it was thinking of expanding to South America, and possibly Australia.

D1 will keep the plant science, as well as its refinery and trading activities. The joint venture will plant the trees, harvest the seeds and extract the oil. D1 and BP will share the crude oil and sell it.

The Guardian
by Marianne Barriaux