Z Energy closes its Te Kora Hou biofuels plant
The company has decided to exit production of the energy after the installation entered hibernation in May of 2020.
Z Energy has confirmed the closure of its Te Kora Hou biofuels plant and finalised its production of the fuel at the site. The news was confirmed by Mike Bennetts, Chief Executive of Z, after the installation went into hibernation in May of 2020 due to the rise on global tallow prices as well as escalating construction costs to bring the plant to an acceptable scale.
The company was considering reopening the plant ahead of New Zealand’s Sustainable Biofuels Obligation, which is set to come into effect on April 1st of 2023. After an initial Front-end Engineering Design (FEED) study and a detailed analysis on the risks associated with restarting the plant were completed, the firm came to its closure decision.
“Analysis confirmed that the case to stand up the plant for domestic production is uneconomic when compared to the cost of imported products. In the context of a highly competitive global market, the ongoing challenges associated with securing the necessary tallow feedstock are intensifying. As an example, tallow prices have increased some 400 per cent from around $450 per tonne in 2015, to $2077 per tonne in March 2022,” explained Bennetts.
Z Energy decided that importing renewable diesel from the international market is the most efficient and climate friendly option to meet the Obligation’s targets. While this means an important setback for local production of the alternative fuel, the firm has confirmed it will still be working to decarbonize the sector by introducing biofuels into the market.
“While we understand that there will be disappointment in this decision being confirmed, Z’s commitment to investing in biofuels, including leading the introduction of biofuels into the market to help the New Zealand transport sector decarbonise remains strong,” added Z’s representative.
