British biofuel producer Argent Energy says it is shelving plans to invest more than $100 million in New Zealand.
Dickon Posnett, managing director of Argent Energy's New Zealand subsidiary, said the proposed Biofuels Bill made the playing field too uneven.
"Ethanol gets a government-backed subsidy, through relief from excise duty, that amounts to 42c a litre," he said.
"Oil companies are being incentivised to import ethanol. That makes it utterly uneconomic to invest in the domestic biodiesel plant we were proposing to build."
Mr Posnett said the Government, through its Foundation for Research, Science and Technology, dished out $45.6 million to two companies researching potential biofuel sources late last month.
Argent Energy questioned how the Government could ignore a natural resource it already has in abundance -- tallow (waste animal fat) as an immediate biofuel resource.
Mr Posnett has spent nearly two years in New Zealand working on a feasibility study for the construction and operation of a plant that would use tallow and used cooking oil to produce biodiesel.
Argent Energy's plant in Scotland has been supplying major oil companies in Britain and Europe for more than two years, with trucks, buses and cars running on blends with its European standard biodiesel in all temperatures.
Mr Posnett said Argent Energy would still consider investing in New Zealand, create about 60 jobs and help to contribute to some self-sufficiency of fuel supply for the country, if the Government worked toward making all biofuel equal in terms of tax and subsidies.
