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Budget boosts energy plays
Gordon Brown pleased followers of the energy sector with what was generally considered a good Budget, with much for a slew of renewable energy and energy-efficient companies to cheer. One major plus was news from the Chancellor that the current 20p per litre reduction in fuel duty for bio-diesel and bio-ethanol will continue until at least 2010. City analysts say this spells good news indeed for an array of AIM-listed bio-fuel producers such as D1 Oils and Biofuels Corporation, and even though the likes of Renova and GTL Resources produce and sell bio-ethanol across the Pond in the US they should prove beneficiaries of generally far warmer sentiment towards the sector. Indirect Budget beneficiaries should include palm oil producers such as the fully listed Anglo-Eastern Plantations and R.E.A Holdings, as well as MP Evans, which boasts an AIM quote. These businesses’ products are increasingly being used as a feedstock for bio-diesel production. Elsewhere, the Government announced a review to examine the vehicle and fuel technologies that could ‘decarbonise’ transport – a move that could boost the one company that has developed a system that can provide an economically viable solution to decarbonise the transport industry, £117 million outfit ITM Power. More widely, the increase in the Climate Change Levy should continue to boost the economics of all alternative energy technologies that are Climate Change Levy exempt, with Alkane Energy a prime example.
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