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What Are BioFuel Bonds?
Renewable energy bonds for UK investors include things like solar and wind power technologies. In addition, more and more renewable energy bonds are being offered for those who wish to invest in biofuel. Essentially, biofuel bonds offer the opportunity to make a fixed-term investment in an ethical way.
Many renewable energy bonds in UK markets work this way – investors purchase a bond for a stated return over a given period and are able to redeem it at the end of the investment term or reinvest it if they wish. Biofuel bonds are no different but they do mean that your money goes into this particular form of renewable energy technology. Investment portfolios can begin at as little as £10,000 with no hidden fees. This is extremely attractive for what is a continually growing market.
As the name suggests, biofuel is a fuel that creates energy from something that has been grown in the biological sense of the term. Unlike fossil fuels, for example, a biofuel can be cropped and then grown once more on the same patch of land. As such, it is seen as a green source of power that is fully sustainable. The sector is growing rapidly. By 2010, global biofuel production had reached 105 billion litres and it has progressed significantly since then.
Although the traditional oil and gas sector still dwarfs biofuels in terms of production, investors are looking to renewable energy bonds and biofuel investment in greater numbers because of the potential it has to provide long-term growth. These days, an increasing proportion of road vehicles run on biofuel technologies and few would bet against the number of such vehicles from going up in future.
Investors can now put their money into green and renewable energy sources like biofuel to help forge a low carbon and climate resilient economy. In the UK, a secure, fixed annual return of anything between 9 and 11 per cent is to be expected from this sort of investment these days. What’s more, these sorts of figures can be generated from nothing more than a 12-month investment term although it should be said that the highest rates of return on biofuel investment tend to be offered over longer terms. Investors in biofuel businesses are also able to obtain regular returns on their bonds which are commonly calculated on a bi-annual basis.
In September 2017, the Department for Transport announced new and more stringent targets under its own Renewable Transport Fuel Obligation. This has led to a recent flurry of activity in the biofuels market because only crop-based biofuels can make the transition towards a lower carbon transportation sector possible by the new deadlines which will start to kick in from 2020.
Since the biofuels sector is now keen to make rapid but sustainable expansion, so the range of biofuel investment opportunities has grown with some very attractive rates of return being offered to investors who choose to get on board with bonds now. The market is constantly changing as demand for more sustainable fuel continues to energise the sector. As such, rates of return can and do alter. This means that anyone looking to invest in biofuel should seek professional advice in the market which can be invaluable.