Biofuel plant opens new grain market

The Ensus plant, on a big industrial estate with its own power station and other services, at Wilton, between Middlesbrough and Redcar, was loading grain this week and expected to start the three-day distillation process in time to have ethanol ready in the next few days.

If all is well, that will be the start of full-out production, using 1.2 million tonnes of feed-grade wheat to produce 400 million litres of fuel over a year.

Although Ensus has made no guarantees about buying British, it hopes and expects to get most of its feedstock from the north east of England, where local farmers should have the advantage over imports.

The only other bio-ethanol plant in the UK is British Sugar's at Wissington, Norfolk, which uses beets. There are also some bio-diesel plants, using rapeseed and other vegetable oil sources.

Farmway, a farmers' supplies and services co-op, got 120 interested visitors to a recent presentation in Northallerton on the opportunities presented by the Ensus development.

One theme of the day was the importance of careful nitrogen input on crops for biofuel, because the manufacturers will eventually need to produce environmental audits of their products.

Shell will mix the Teesside ethanol with standard petrol to meet the Renewable Transport Fuels Obligation, which currently requires 3.5 per cent of all fuel sold at the pumps to be from renewable sources.

Ensus will add to the environmental credentials of the product by selling the leftovers. About 300,000 tonnes of carbon dioxide will be captured and used in the food and drink industries. And 350,000 tonnes of used grain will be turned into a high-protein alternative to imported soya for animal feeds. Glencore Grain, based in Kent, will organise the raw material supplies and sell the used grain.

Prices will vary from contract to contract, as in all grain trading, but on Tuesday this week Glencore was quoting 100 a tonne at suitable farm gates for Ensus supplies. The new market amounts to half of last year's UK wheat surplus.

Ensus was formed in 2006, by a group including ex-ICI executives, in response to the climate change policies then coming in. It raised 300m to build the Teesside plant to "the highest sustainable standards – with surplus heat and power being made available to other plants on the site".

There has been controversy over "burning food" and a company spokesman said: "We needed a business model that would deliver on the sustainability goals of biofuels policy. This means maximising the benefits from all of our refinery co-products, which is why we call ourselves a grain biorefiner and not a biofuel producer."

The local contacts for Glencore Grain are Stephen Large, 01757 282331, and John Kaye, 01430 432336. And Farmway has a deal to supply Glencore – contact Richard Martin on 01325 504611.