investing in green oil

ashdale1234

When my financial advisor came to see me yesterday, at the close of discussions, he mentioned the thought of investing in Green Oil. He stressed that as a financial advisor, he wasn't recommending this and wasn't allowed to anyway. He was mentioning it in case I was interested because "with his other hat on", he was involved in "new alternative investments". He gave me a brochure to read which describes the process in Queensland where Millettia crops are grown for bio-fuel.

Basically a £10K investment for five years would net a return of 5% in the first year, 10% in the next, going up to 20% in the fifth and final year.

I've never ever considered anything like this. What thoughts do you guys have about this? Ethical, yes, but is it a sensible investment?

purch

Is it anything like Red Diesel :eek:

calypso_rhapsody

No i don't think so - red diesel is just ordinary diesel that is dyed red to show that less tax has been paid on it. It is available to farmers to use for agricultural purposes - they are not meant to use it in ordinary road cars - round here they tend to do spot checks of vehicles at events like Young Farmers Rallies etc to try to catch the farmers out. I've even heard of one who uses it (illegally) to heat his swimming pool!

Bio-fuel is quite different ... and i think a very attractive proposition in the right vehicle (sorry no pun intended) .. the question is whether the investment opportunity that the OP has been shown is the right way to invest in it. The rates of return quoted sound almost 'too good to be true' and we all know what that probably means! But then weren't the early returns on pv solar systems pretty impressive too?

Probably only for the brave i would think! If you google the plant name you will find a lot of info ..... and sales blurb!

atush

There is nothing Green about Oil. And Biofuels aren't all that Green either.

I don't like the sound of your IFA and would look for a new one. He should only wear one Hat with you.

sabretoothtigger

Biodiesel is cutting edge when its produced via new types of algae or ecoli Ive heard can do it. The problem is its very fragile, normal crops can be used but in a greatly reduced way.

If you go to Tesco and buy sunflower cooking oil, this is basically what you can fuel a car with. The IRS have also made it tax free to do such things and recycle chip fat and all sorts
Your scheme sounds like it relys on tax benefits so this is the critical point. Normal plain oil black oil is still cheaper to process then agriculturally grown natural oil

The other side is biotech research and development, very high risk reward. You could literally become a millionaire if you knew who would invent the natural solution to oil
However everything Ive said has been pencilled in for ten years, maybe maybe but I think progress is slow

So government tax laws and biotech. Not sensible, sensible is boring old oil like Shell

Ark_Welder

The increasing use of agricultural land for growing bio-fuel crops is one reason why food-price inflation has been increasing - less land and crops for the hungry.

For a non-food bio-fuel-alternative story, have a look at a 5-year chart for D1 Oils (DOO).

Joe_Bloggs

This company got an award for green recycling.
J_B.
[STRIKE]Cooking oil strained through a nappy would do similar. [/STRIKE]

Aegis

docjohn wrote: »

When my financial advisor came to see me yesterday, at the close of discussions, he mentioned the thought of investing in Green Oil. He stressed that as a financial advisor, he wasn't recommending this and wasn't allowed to anyway. He was mentioning it in case I was interested because "with his other hat on", he was involved in "new alternative investments". He gave me a brochure to read which describes the process in Queensland where Millettia crops are grown for bio-fuel.

Basically a £10K investment for five years would net a return of 5% in the first year, 10% in the next, going up to 20% in the fifth and final year.

I've never ever considered anything like this. What thoughts do you guys have about this? Ethical, yes, but is it a sensible investment?

I'm really not happy hearing that sort of thing, and strongly suggest you should report the adviser either to his company compliance department or to the FSA. He should not be promoting schemes like this by simply suggesting that you take a look at them off the record. The fact that he brought brochures around indicates that he was preparing to advertise the scheme to you, so he can't even claim to have brought it up in passing...

The idea of multiple "hats" sounds like he's trying to scam you while staying off the official radar, so if nothing else you might want to consider finding someone more professional to advise you on your financial affairs.

ashdale1234

Apparently the land to be used for the millettia plantation is low-grade land that was once used for growing tobacco and would be unsuitable for food crops. (I should have said that at the start.) But here again, I've only got the brochure's word for that!

My first thought was, another South Seas Bubble! So thank you for your opinions. I shall take them on board. I appreciate your views about my IFA and that he shouldn't be "wearing two hats".

droopsnoot

I have a couple of different investments (quite small ones) in similar products, one is a couple of years in and part-way through a "restructuring" which will reduce the projected income, though if the projections are correct it reduces from 'unbelievable' to 'very good'. The main thing that worried me about the Milettia product was that wherever you look, it always comes back to one individual, in the end though that didn't stop me investing. You have to remember that however well the brochures are worded, the returns are never guaranteed, only projected.

jimjames

Two things to add.

I'd agree that it sounds very strange for an adviser to adviser "off the record", it just screams out that something is dodgy.

Secondly it isn't ethical either as mentioned above. Growing food to burn and drive up prices rather than feed people is not a great way to progress. Just because it isn't fossil fuel doesn't necessarily make it green.