The major part of the business plan was concerned with conducting a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. Further detail on this is given below.
Strengths
Oilseed Rape has been chosen as the feedstock for the production of Biodiesel based on the fact that is has been grown in the UK for centuries and is a known crop that has proven successful in the UK climate. The decision has been made that farmers will be contracted to grow the crop and extract the oil for a specified price, which will reflect the current market price of diesel. This pricing structure will ensure maximum profitability for the farmer. The relatively simple method of oil extraction enables the process to be decentralised and makes it accessible for seed merchants or small co-operatives of farmers, to take on and run. The technologies used in both the oil extraction process and the refinery are known and proven around the world, reducing uncertainties in their success.
Weaknesses
The limited land available for the growth of energy crops sets an upper bound for the UK grown feedstock, and so limits potential future expansion. To overcome this, alternative sources of vegetable oil would need to be found; this could include imported crops, either in the form of oilseed or grain - to replace food growth where oilseed is the preferred crop. It is apparent that government backing will be essential to the success of Biodiesel in the UK. For this to happen significant justification for the use of Biodiesel blend over traditional diesel will be required.
Opportunities
Governmental subsidies for the growth of energy crops and set aside land will have a significant bearing on the uptake from farmers. In the same vein, support in terms of reduction in taxation of Biodiesel has been seen in the Government Budget 2002, indicating an attitude that supports the Biofuel industry. This paves the way for further incentives and support from the government. As the use of the processing technology is increased there will be a greater opportunity for research and development to improve the process and increase its efficiency. Socially, there is a movement to a more environmentally conscious society, which can be used to the advantage of sustainable fuels such as Biodiesel. There is also the opportunity to nurture such an attitude through the introduction of government-enforced change to use Biodiesel blends over traditional diesel.
Threats
The initial threat to the success of the process is failure of the feedstock crop, be it through environmental or social factors, whereby farmers do not take up the scheme to produce oilseed rape. The level of taxation is crucial to the competitiveness of Biodiesel and without the support of the government and reduced tax rates the product may well be unviable. Future legislation and regulations on the production of Biodiesel will influence the process of production and, for example, should the requirements for the purity of Biodiesel change, the process will need to be adapted to ensure that this can be achieved, a costly process. Currently there is little competition in the market of Biodiesel production, the main company operating in this sector is Greenergy, which are actively working towards introducing Biodiesel to the UK market. The nature of this market is very much a niche market with little room for competition, in its existing state, and as such other companies operating in this are could prove highly influential on the success of the proposed scheme.
