D1 Oils, the AIM-listed biofuels producer, is to cut up to 35 jobs at its refineries in the North of England because it is struggling to compete with subsidised US imports.

The job losses, which could equate to 30 per cent of the company’s work-force, will most probably be at its bases in Middlesbrough and Bromborough, Merseyside.

Elliott Mannis, chief executive of D1 Oils, said yesterday: “We can’t reasonably continue to bear the cost burden against an uncertain time horizon. Basically American subsidies are destroying this business.”

Europe’s domestic biofuels industry has been devastated by a legal loophole that allows American exporters of biodiesel to Europe to qualify for subsidies worth 11p a litre, or $300 a tonne.

Late last year the European Biodiesel Board (EBB), an industry body, voted overwhelmingly to back a formal complaint to the European Commission.

The EBB said that the subsidies have had a perverse effect, sending European imports of biodiesel from the United States soaring from about 100,000 tonnes in 2006 to an expected million tonnes in 2007.

Mr Mannis said that it was unlikely the US would revoke the subsidies, particularly in a presidential election year because the move would be unpopular with farmers.

He said: “I was out in Washington about two weeks ago so I have done some probing first hand to try to get a sense around whether there is any end in sight and personally I don’t see that there is.

“The simple fact is that you can buy the subsidised American imported material cheaper than you can buy virgin (vegetable) oil for processing,” Mr Mannis said.

Shares in the company closed down 36.7 per cent at 62p.

D1 Oils recently teamed up with BP, the oil giant, over plans to plant nearly 200,000 hectares of jatropha – a nonfood oil plant typically grown on semi-arid land so it poses less of a threat to food production. The first crops are expected to be ready late this year.

Mr Mannis emphasised that “that bit of the business is unaffected” by yesterday’s announcement.

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