TALLINN - Alternative fuel technologies got a double boost this week after a government agency decided to grant funds for biodiesel research and a private company commissioned a study for a new plant that would produce the environmentally friendly fuel.
Enterprise Estonia, a state-sponsored agency that supports small businesses, decided to grant 15.5 million kroons (1 million euros) to Nordic Biodiesel's study of a novel biodiesel production technology. The funds will be allocated in the framework of Enterprise Estonia's research and development support program.
If the study is successful, the project, estimated to cost nearly 100 million kroons, will provide for the production of biodiesel not only from pure plant oils, but also from low-quality raw materials such as used cooking oils and animal fats.
"Biofuel production has good prospects if the price of the final product is competitive with that of fossil fuels," Nordic Biodiesel board member Aleko Peipsi was quoted as saying. As he explained, exemption from excise tax, which the government is seeking from the European Commission, and the cost of the raw materials help make the price of biodiesel more competitive.
"So far mostly expensive purified plant oils have been needed to produce biodiesel. We wish to improve this situation," Peipsi said. The new technology is, he added, also more effective than previous ones regarding the cleaning of biodiesel from production residue.
"We decided to finance the application research because it's a method involving a number of technological risks. Hedging technological risks is Enterprise Estonia's function in the Estonian innovation system," Madis Vooras, the agency's director for technological development, said.
With the technology patented by Nordic Biodiesel, both rape oil and other oils of plant origin can be used for making biodiesel. No environmentally dangerous chemicals have to be used during the production process.
Meanwhile, Transiidikeskuse AS (Transit Center), which is building a soy factory in the port of Muuga, announced it wanted to build a biodiesel plant. An environmental impact study was initiated by local authorities this week, the company said.
The idea for the plant comes from Transiidikeskuse subsidiary Muuga Sojatehase (Muuga Soy Factory), which wants a plant to produce biofuel from raw material supplied by the soy factory. Annual capacity would be approximately 100,000 tons.
Leaders of Transiidikeskuse, a concern of transit companies, declined to comment on the construction of the facility, which would be located in the western part of Muuga Port, saying only that at present preliminary designing is underway.
There are at least seven companies in Estonia that plan to launch production of biodiesel. A 328 million kroon biodiesel factory owned by Biodiisel is supposed to go into operation in Paldiski in the fall of 2006. The facility's planned capacity is 100,000 tons of biofuel a year.
