Rape Meal
The EU is the world’s largest importer of oilseed meals due to a very significant deficit in such protein-rich meals for animal feeding. This import dependency is likely to fall as a growing proportion of EU oilseed meal consumption is sourced from domestically produced and processed oilseeds, in particular rapeseed meal. Recent rising maize prices relative to those for oilseeds have resulted in an increased demand for oil meals, which have progressively replaced maize in livestock feed rations as a source of energy. This has had a positive impact on oilseed meal prices. With livestock enterprises predominantly based in the western half of the UK, and currently supplied with rapemeal from processing plants located at significant road haulage distances in the east of the country, FFE’s Cardiff operations are ideally located to supply this market efficiently and sustainably.

Rape Seed Oil
Rape oil currently attracts a premium price in European markets over other competing products such as soybean oil and palm oil. This price can be enhanced by further processing through refining, bleaching and deodorising (RBD). The market for premium-value, food-grade rapeseed oil is strong and expected to continue to attract relatively high prices. Given these market conditions, Flex Fuels Energy is confident that its oilseed processing facility can serve effectively as a stand-alone unit until the biofuel market in the UK stabilises and its potential becomes clearer.

Oil Seed Rape
Oilseed rape will be the main feedstock into the plant. There is currently a global shortfall in rapeseed processing capacity and this is expected to grow in the short term as more land is allocated to rapeseed production. Significantly, larger volumes of oilseed rape are expected to be supplied into the EU from Eastern Europe, reducing the UK export demand and generating a greater shortfall in UK processing capacity. With strong local markets for processed products, the best location to add capacity is at the source of seed.

Biodiesel
FFE considers that the short to medium term UK outlook for biofuels remains uncertain. The impact of the ‘Splash and Dash’ subsidies in the US remains profound, even though they are now likely to be subject to regulatory limits, and the recent Gallagher report on the indirect effects of biofuels, have together damaged confidence in the biofuels sector in Europe. However, Flex Fuels Energy remains optimistic that the medium to longer-term outlook for biofuels remains positive, and that it will be well positioned to develop a co-located biodiesel plant to supply this market.