The Otago Polytechnic Centre for Sustainable Practice, which helped establish a biofuel depot in Queenstown last year, is overseeing the search for a site here.
Centre director Steve Henry said on Thursday that while several sites had been investigated, none had proved suitable.
"The bottom line is we don't have a site . . . and until we get land, nothing is going to happen."
A "sizeable area" with enough space to turn a large truck was required, he said
Last year, potential biofuel users joined the Dunedin Biodiesel Consortium and Allied Petroleum was awarded the contract to build the depot and supply Biogold NZ20 fuel. The fuel is manufactured in Christchurch and is a mix of 80% diesel and 20% biofuel made from recycled cooking oil and virgin canola oil.
When difficulties securing a site first arose, Allied Petroleum began negotiating to buy land in Green Island. However, those negotiations fell through, business development and marketing manager Brett Haldane said.
Allied Petroleum was still committed to the project but was waiting for the member partners to provide the site, he said.
The Queenstown depot, the first public facility in New Zealand, opened in March last year. It is now being used regularly by more than 70 vehicles ranging in size from four-wheel-drives to buses.
The depot was built on land provided free by the Queenstown Lakes District Council at the rear of the Lakeview Holiday Park. The council and Queenstown's tourism organisation Destination Queenstown also supplied some seed funding.
Mr Henry said the Dunedin consortium had been "actively discussing sites" with the Dunedin City Council staff and elected representatives, but no sites had materialised yet.
The consortium was a non-profit organisation and it "made sense" for the council to support the initiative as the Queenstown council had done, he said.
Sites had also been offered by some of the potential biofuel users and those were being investigated, Mr Henry said.
Allied Petroleum was keen to expand its biofuel network to Dunedin and elsewhere, Mr Haldane said.
Early this year, it began supplying Biogold NZ20 to the Marlborough Biodiesel User Group, making deliveries direct to customers' tanks rather than a shared facility.
Early demand was "very encouraging" and there was strong interest from potential users in Nelson, he said.
Mr Henry said at present biofuel blends were no cheaper than 100% diesel, with price and a desire to use "greener" fuels the main motivators to switch from ordinary fuels.
"With the prospect of carbon taxes rearing their head, the biggest motivation to change [to biofuel] will be companies and motorists positioning themselves against fuel price hikes in the future."
