Oil Report

German group in 50 mln euro French biogas plan

HAMBURG, Feb 14 (Reuters) - A German joint venture said on Thursday it plans a series of 20 biogas production plants in France with investment totalling 50 million euros ($73.05 million).

The plants will largely be built for the food processing industry to produce biogas from food waste, said a spokesman for a consortium partner, German biofuels producer BKN Biokraftstoff Nord AG B9KG.DE.

“French food processors currently have to pay to remove large amounts of waste materials such as potato peelings, the concept is to turn this waste into biogas and earn profits,” he said.

The plants would have a capacity of at least 500 megawatts annually. The first was likely to be completed in one to two years depending on planning approvals being granted by French authorities, he said.

A new joint venture company France Biogaz Valorisation has been established by German firm Biostrom Energy, a unit of BKN, plus German renewable fuels investment company Beteiligungsgesellschaft Erneuerbare Energie and development company Sterr-Koelln.

Biogas is largely methane produced by processing organic and vegetable materials such as maize, silage or farm animal manure. Conventional gas is produced from fossil fuels such as coal.

The consortium will plan and develop projects and organise investment, with finance being provided by institutional investors and food processors.

The venture expects rising biogas demand in France, especially because of government moves to compel more renewable energy use. It says France’s biogas market is underdeveloped compared to Germany, where thousands of farmers have built small plants to generate extra income.

BKN said in November it would change its corporate focus to biogas and abandoned plans to build a 150,000-tonne annual capacity biodiesel plant.

This followed a very serious fall in German biodiesel sales largely caused by new taxes on biofuels.

Reporting by Michael Hogan; editing by Chris Johnson