British Sugar's new bioethanol plant is only the start of a revolution in the UK's fuel production. Rebecca Wright finds out more

Biofuels are here to stay in the UK whether we like it or not, after MPs voted last month in favour of the Government's Renewable Transport Fuel Obligation (RTFO). This legislation will require all petrol and diesel sold to come from renewable sources, ie bioethanol or biodiesel, by 2010.

The vast majority of drivers will notice no change. Supermarkets such as Tesco and Morrisons already blend 5 per cent ethanol into some of their supplies and sell it as standard unleaded petrol. The RTFO simply means that this will become standard practice, with all diesel sold also containing 5 per cent bio-matter.

The Government promises that a switch to 5 per cent biofuel blends across the board will deliver "significant and immediate" carbon savings, to the tune of 700,000 to 800,000 tonnes of carbon per year – the equivalent of between 2.6 million and 3 million tonnes of carbon dioxide (CO2). The RTFO also means that the UK will have the most sophisticated and robust biofuel reporting system in the world, forcing all suppliers to prove that their biofuels have been produced and sourced in a sustainable and CO2-efficient manner.

So everyone's happy, right? No hassle for the car driver, no expensive refuelling infrastructure changes for the fuel suppliers, considerable carbon savings for all, and at no threat to the rainforests?

Not quite. For some reason, in parts of the UK media, biofuels have changed from having the potential to make an important contribution to the reduction of greenhouse gas emissions to being single-handedly responsible for starving the world's poor, destroying its habitat and adding greatly to the problems of climate change.

Luckily, the UK's first commercial bioethanol plant, which was opened last week by Lord Rooker, Minister for Sustainable Food and Farming, in Wissington, Norfolk, addresses all of these concerns. Owned by British Sugar and built next to the world's largest and most efficient sugar beet factory, it will produce 70 million litres of ethanol each year from 700,000 tonnes of sugar beet, all of which is grown on 10,000 hectares of English countryside.

Far from destroying sensitive habitats and eco-systems or diverting valuable food crops into fuel, all of the beet that is turned into ethanol would have been grown anyway. Previously, British Sugar used these supplies for its staple sugar business, but EU reforms put an end to this, leading the company to diversify into road transport fuel. Now, the site produces enough ethanol a year for one million cars to run on the Government's stipulated 5 per cent blend.

Another common criticism of biofuels is that their production is so energy-intensive that far more CO2 is created during their manufacture than is saved over the life of the fuel. Such statistics are usually based on outdated and inefficient US factories that use corn as their feedstock. Corn is notoriously difficult to extract energy from.

Thanks to state-of-the-art combined heat and power systems at Wissington, which utilise excess energy from the adjacent sugar factory, British Sugar's bioethanol boasts greenhouse gas savings of between 60 and 70 per cent on a life-cycle basis compared with fossil fuels. In addition, the site exports enough electricity back to the national grid to power 200,000 homes in Norfolk, and even uses excess CO2 to cultivate up to 100 million tomatoes each year, making it one of the UK's largest tomato producers.

If there's one downside to this story, it's that Wissington is a drop in the ocean, producing little more than 5 per cent of the one million tonnes needed by 2010 for the RTFO. However, British Sugar executives promise that this plant is just the start. The next step is a £200m ethanol factory being built in Hull by British Sugar's parent company, Associated British Foods (ABF), in a joint venture with oil giant BP and American chemical firm DuPont. The Hull factory will dip into the UK's 2 to 3 million tonne grain surplus to use as its raw material. (Grain is currently exported and dumped on world markets, thereby depressing prices to the detriment of emerging countries.) With an annual production capacity of 330,000 tonnes of ethanol, the Hull factory will supply one-third of the UK's biofuel needs.

Clare Wenner, head of transport biofuels at the Renewable Energy Association, says that with the opening of British Sugar's factory, the UK is leading Europe in mass biofuel production. "It's vital that the UK gets it right," she says, "otherwise how else can we expect other countries to meet the tough biofuel standards that we are imposing on them?"

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