Canadian Biox's biodiesel project stumbles on lack of govt funding

(ADPnews) - Oct 4, 2010 - Canadian biodiesel company Biox Corp (CVE:BX) said on Monday its Hamilton biodiesel project met the requirements of state incentive programme Ecoenergy, but due to lack of funds it would not receive any financing for the time being.

The company has received a notification from Natural Resources Canada (NRCan) that the authority is unable to provide funding for the facility, which will have a capacity of 67 million litres (17.7 million gallons) of biodiesel a year. NRCan cannot finance all eight projects that currently meet Ecoenergy's criteria.

"We intend to pursue further discussions with the federal government to determine if additional funding can be made available in a timely manner to fund all applications that met the program requirements, including the ability to draw upon the unused portion of funding since the program's inception," Biox president and CEO Tim Haig said. He added that the firm would look for other locations to build the facility, so that it could continue its expansion strategy.

The Ecoenergy programme, with a budget of CAD 473 million (USD 463m/EUR 338m), provides operating incentives on a per-litre basis to support the production of green alternatives to petrol (gasoline) and diesel in Canada. It kicked off in April 2008 and will continue until the end of March 2017. In December 2009, it attracted 68 applicants seeking funding of some CAD 2.1 billion.

Biox has an existing 67-million-litre biodiesel plant in Hamilton which has been receiving incentive funding since the spring of 2008.

In a separate notification, NRCan said Biox's Montreal application did not meet the requirements for a project in an advanced state of readiness.

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