Plans scrapped for Scottish biofuel plant

Plans to build a £65 million biofuel refinery plant in Scotland have been indefinitely put on hold because of the credit crunch, much to the relief of eco-campaigners.

Ineos Enterprises, the oil refinery company who planned to build the plant, said the current economic climate and doubts about the environmental sustainability of biofuels have made the project unviable.

A statement from Ineos said the plans would be on hold until the company had a clearer picture of the economic outlook, and the probable demand for biofuel in Europe.

If the building had gone ahead, 1.2 million tonnes of biodiesel would have been created at the plant by 2010 - making it a world leading site in biofuel production.

Ineos already runs a biofuel refinery in France. A spokesperson for the company said plans to double the capacity at that plant would be going ahead.

Duncan McLaren, chief executive of Friends of the Earth in Scotland, welcomed the news that plans to build the Scottish plant had been called off.

McLaren said that even though biofuels can help to reduce carbon emissions, current production methods have led to conflict over food security and biodiversity.

Biofuel is made from renewable sources such as vegetable oils.

The production of biofuels has raised controversy in recent months as crops grown for biofuels take up land that could otherwise be used for food production, leading to a worldwide food shortage.