Dickon Posnett, managing director of Argent Energy’s New Zealand subsidiary, said: Ethanol gets a government-backed subsidy, through relief from excise duty, that amounts to $0.42 a liter. Oil companies are being incentivized to import ethanol. That makes it uneconomic to invest in the domestic biodiesel plant we were proposing to build.

The New Zealand government, through its Foundation for Research, Science and Technology, has recently given out $45.6 million to two companies researching potential biofuel sources. Mr Posnett said that while Argent Energy supports R&D, it questions how the government can ignore a natural resource it already has in abundance.

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 has said that the government has pointed to tallow as an immediate biofuel resource, but when it is time to get legislation through parliament, domestic producers are being placed at a severe disadvantage.