ABF commits to £200M biofuel plant

Associated British Foods (ABF) has launched a joint venture with BP and global cross-sector manufacturer DuPont to build a world-scale biofuel plant in the UK.

The plant will initially produce bioethanol from wheat and will be built at a cost of £200M at BP’s chemicals site at Saltend, Hull. Its capacity will be 420M litres (330,000t) of bioethanol per year and it is planned to be operational in late 2009. ABF expects a return on its investment ahead of its cost of capital in the first full year of operation.

Although the plant will produce bioethanol at first, the partners will look at converting it to biobutanol once the technology is available. BP and DuPont plan to run a jointly funded biobutanol demonstration plant alongside the main plant to support this objective.

Formal agreements with other ABF businesses, such as Frontier Agriculture and AB Agri, are expected to be made by the joint venture after its formation. Supply of locally grown wheat would be arranged by Frontier. The major co-product of bioethanol production, distillers’ grain, would be sold to AB Agri, which will use it as an alternative feed for livestock.

ABF and BP will each hold 45% of the joint venture and DuPont will hold 10%.

The announcement follows British Sugar’s declared intention to build the UK’s first bioethanol plant, with a capacity of 55,000t of bioethanol per year, at Wissington, Norfolk. It will use sugar beet as a feedstock and the plant will start production next month.

“This exciting project will make ABF the major producer of biofuel in the UK,” said George Weston, chief executive of ABF. “Its announcement reflects our confidence in our sugar and agricultural businesses, in our partners BP and DuPont and in the government’s commitment to biofuel production.”