Green Sprit fuels has confirmed the location of a second bioethanol plant and says its Henstridge site in Somerset will be operational as planned next year.

The Humberside plant, near Grimsby, is due to start processing in 2009 and will use 650,000t of grain sourced from local farmers by merchant Gleadell.

It will be built on land currently owned by Huntsman Pigments, a titanium dioxide manufacturer, which will supply excess self-generated power to the Green Spirit site from its adjacent factory.

John Waltham, the firm’s director for development, said: “Securing this site is a significant development for us.

‘Promising site’

“It is undoubtedly the most promising site on the Humber bank and there are many synergies with Huntsman that will benefit both parties and drive down production costs.”

Mr Waltham said grain by-products from the ethanol production process would be used to generate power in a joint venture with generator RWE Npower Cogen.

Excess power would be sold onto the National Grid increasing the plant’s economic viability, added Mr Waltham.

Although he conceded that falling oil prices and rising wheat values had made it a difficult period for the biofuel sector, Mr Waltham said he believed the future was still rosy.

He said Henstridge, which will use 330,000t of wheat supplied by parent company Wessex Grain, should be on stream by autumn 2008. A third plant at an undisclosed location was also being considered, Mr Waltham said.