Saras builds flexible biodiesel plant in Spain

LONDON (Reuters) - A biodiesel plant which Italian oil refiner Saras (SRS.MI) is building in Spain will use various vegetable oils as feedstock, Saras General Manager Dario Scaffardi told the Reuters Global Energy Summit on Wednesday.

Saras, which holds about 15 percent of Italy's refining capacity, has started building a 200,000 tonnes a year plant in Cartagena, Spain, to satisfy its own needs as the European Union presses ahead with targets for green fuel use, Scaffardi said.

"It will be flexible, it will use a variety of oils," he said, adding that the plant would use vegetable oils made in Europe as well as imported oils, like palm oil.

The plant is due to start up in 2008.

The construction was in an early stage and the feedstock choice would largely depend on the market conditions, he said.

Scaffardi brushed off concerns about overcapacity in Europe's biofuels sector, saying any excess would be temporary as green fuels demand was set to grow to meet the EU's new targets.

The EU has a non-binding target of 5.75 percent share for biofuels in car fuel use by 2010 and has agreed to impose a mandatory blending of 10 percent of green fuels in vehicle fuels by 2020, aiming to boost efforts to fight climate change.

Scaffardi said Saras, which makes 7.5 million tonnes of diesel a year, would have to use 400,000 tonnes of biodiesel to meet the EU target, but has not been planning to build another plant, at least for now.