French Biofuel Maker Is Tested by $35 Oil Despite Tax Breaks
Francois De Beaupuy for Bloomberg: Global Bioenergies SA, an unprofitable French maker of sugar-based gasoline, said oil’s recent slump to $35 a barrel is testing the financial viability of its technology even as it plans expansion in the U.S.
“The economic case doesn’t stand with oil at $35, except when there’s a tax incentive” as in various European countries and the U.S., Chief Executive Officer Marc Delcourt said in an interview. Without tax breaks, the company would need Brent crude well above $100 a barrel, he said.
Shares of Global Bioenergies, listed in Paris since 2011, have dropped more than 50 percent from their peak in May as oil’s collapse raised investor concern that biofuel makers couldn’t compete. Delcourt is counting on the end of European sugar production quotas in 2017 and changes in U.S. eating habits to keep the sweetener’s price low as it eyes additional capacity. Raw-sugar futures are trading at half their price five years ago. Cont'd...
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