Royal Show: Bioethanol can support the price of wheat

The new Ensus plant will have the capacity to refine over one million tonnes of wheat a year - equivalent to the entire exportable wheat surplus of north east farmers.

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Not only will such a demand give farmers a healthy market for their grain but it will help maintain a prices.

Speaking at the Royal Show Mr Seymour said: "Bioethanol will do what intervention did, it will put a bottom in the market when the price is low. The quicker we have the Ensus plant and demand increases for wheat, the better in terms of prevailing price.”

The refinery will produce 400 million litres of bioethanol a year which will be blend with petrol to help meet EU biofuel targets. According to Ensus, its bioethanol will produce green house gas savings equivalent to taking 300,000 cars off the road.

If the UK retained all of its wheat exports and fed the crop into bioethanol refineries, it would meet its 5 per cent renewable fuel target – UK wheat exports average around 2.8 million tonnes a year which is enough to produce 800 million litres of bioethanol a year.

It is just over a year since the Government introduced its Renewable Transport Fuel Obligation (RTFO) that required 5 per cent of all vehicle fuel to be made from renewable sources by 2010.

However, the target has already been pushed back to 2014 after the Government reacted to criticism about the sustainability of biofuel imports.

The domestic industry is still new, only 8 per cent of biofuel going into the UK supply chain is currently manufactured in this country, but Mr Seymour said the future is in home production.