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A $60 million biodiesel production plant - the third of its kind in the world - could be built in Tauranga and employ a large group of highly qualified engineers.
The bold plan could make the city a centre of excellence for the sustainable biofuel industry in New Zealand.
Scottish-based Argent Energy (UK) is nearing the end of a feasibility study to establish a New Zealand plant producing 75,000 tonnes or 85 million litres of biodiesel a year from animal fat (tallow) and used cooking oil.
That represents 2.5 per cent of diesel fuel sold in New Zealand each year. It would be blended with the fossil-based diesel used in motor vehicles.
The Government wants biofuel to make up 3.4 per cent of petrol and diesel sales by 2012 in a move to reduce carbon emissions and secure the fuel supply.
Argent Energy New Zealand managing director Dickon Posnett, whois based at Mt Maunganui, said the final decision on building theplant was "some weeks or months away; there are two or threeissues that need clarifying - suchas pricing and political commitment".
He told the Bay of Plenty Times his preferred location was Tauranga and he had looked at three sites there including port land.
Other possible locations were Auckland and Whangarei, because of the Marsden Pt refinery.
Mr Posnett said Port of Tauranga was "a good place for us" for importing raw material - and it already had bulk liquid storage terminals.
"Tauranga is a convenient place to be, not far from Auckland, and the business will support the local as well as the national economy."
Mr Posnett said the production plant, built on a 1-2ha site, would cost more than $60 million and employ up to 30 chemical and process engineers.
"I know there is a shortage of skilled people here but they like to come to Tauranga whether they are from Auckland, South Africa or Britain."
The production plant would take 2 1/2 years to complete, from the resource consent stage to the commissioning, and it could be operating by the end of 2009.
He said the plant would have minimal impact on the environment. The emissions were tiny and the plant was silent and sealed, so there would be no smells coming from it.
Argent Energy (UK) opened the world's first large-scale tallow-to- biodiesel plant near Motherwell in Scotland in March 2005. That plant produces 45,000 tonnes, which is blended to 5 per cent of ordinary diesel. At that level no changes need to be made to the fuel supply chain or to vehicle engines.
Argent Energy has just been granted planning permission to build a second plant at Ellesmere Port in Cheshire, England. The production there will jump to 150,000 tonnes, or 170 million litres, of biodiesel a year.
The company is also eyeing other locations in Europe and other parts of the world but New Zealand is likely to be third on the list.
Mr Posnett said the company was keen on New Zealand because the Government was actively pursuing a strategy to encourage local biodiesel production, and the country had a plentiful supply of tallow - the ideal feedstock for the manufacturing process.
Most of the 150,000 tonnes of tallow produced in New Zealand each year is exported to Asia.
Argent Energy NZ has been talking to Shell and Caltex about supplying biodiesel to service stations and truck stops, and for agricultural equipment.
Port of Tauranga chief executive Mark Cairns said his company had had talks with Argent Energy and further meetings were planned.
"We have land available and we are keen to attract any business that puts more cargo across the wharves."
Biodiesel
* What is it?
A clean-burning alternative to diesel fuel which reduces carbon dioxide emissions and can cut fuel bills.
* How is it made?
The glycerol that makes fats and oils thick is removed and the ester, a thick and sticky liquid with high energy content, is used as biodiesel.
* How much more economical is it?
A European trial involving a fleet of trucks driving 4 million km revealed a 1.5 to 2 per cent fuel saving using a blend of biodiesel and ordinary diesel.
* How much would it help prevent global warming?
A Tauranga plant producing 85 million litres a year would save 300,000 tonnes of carbon dioxide emissions. Vehicles contribute more than 16 per cent of New Zealand's greenhouse gas emissions.
