The biodiesel lorry is coming

Cambridge University has mounted a biodiesel refining plant on the back of a lorry so it can go to farms and convert rape oil to fuel at source. The portable refinery is the first in the world that can continuously produce fuel, rather than having to be emptied and cleaned after every batch.

A little bit at the end, however, has me pondering the mathematics of commercial biodiesel-

The government has made this market profitable by giving a tax rebate of 20p on every litre sold compared with commercial diesel. Tesco has begun selling a form of bio-diesel in some garages. It contains 5% bio-diesel and costs 2p a litre more than the 100% petrol version giving Tesco a substantial profit on each litre.

Unless I’ve read that wrong, or it’s badly phrased, Tesco are taking advantage of a rebate and buyers’ goodwill to gouge a profit whilst looking green. Surely they could make it a win-win by selling 5% biodiesel for a couple of pennies less and still make more per litre because of the rebate.

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