LONDON (Dow Jones)--The U.K.'s first ethanol plant was officially opened Thursday by Food and Farming Minister Jeff Rooker.
The 70-million-liter capacity plant in Wissington, Norfolk in eastern England, is run by British Sugar and is located alongside the world's largest beet sugar factory. The ethanol will be produced using 110,000 metric tons of locally grown sugar beet.
"Sustainable biofuels can play an important role in reducing our carbon footprint and I am pleased to see the U.K. is leading the way in promoting sustainable biofuel production," said Rooker.
The sugar factory's combined heat and power plant will also provide energy for the ethanol plant, which is promoted to deliver 60% lifecycle carbon savings for the ethanol compared with ordinary petrol.
Other ethanol plants using wheat as the feed stock have been planned or are under construction in the U.K., but none have yet been completed.
There has been a push to produce biofuel in the U.K. ahead of the Renewable Transport Fuel Obligation, which starts in April 2008. Under RTFO U.K. biofuel usage in road transport fuels is targeted to reach 2.5% in the first year,3.75% in the second year and 5% by 2010-11.
Currently the U.K. offers a 20 pence a liter tax break on biofuel. In addition, for the first two years of the RTFO program, oil companies will face a 15 pence a liter penalty for not complying with obligations.
U.K. usage of 5% biofuels is expected to save 1 million tons of carbon a year, the equivalent of taking 1 million cars off the road.
-By Lisa Kallal, Dow Jones Newswires; (4420) 7842 9415; lisa.kallal@dowjones.com
