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The Sunday Times: Green fuels firm to raise £90m in float

November 12, 2006
Dominic O’Connell
 
A GREEN FUELS company that plans to build Britain’s first bioethanol plant is to raise up to £90m by floating in London.

Ensus, which is expected to announce details of the float within a week, plans to build a plant on Teesside capable of producing 400m litres of bioethanol a year. Shell Trading, an arm of oil and gas giant Royal Dutch Shell, has signed a 10-year deal to buy all the plant’s production. 
 
Ensus is understood to have raised £150m in debt. It will look to raise another £80m-£90m by listing its shares on AIM, the lightly-regulated London stock market.

Sir Rob Margetts, chairman of Legal & General and former chairman of industrial gases giant BOC, is chairman of the company. He said: “We plan to be a leading player in the biofuels sector in Europe, not just the UK.”

The chief executive is Alwyn Hughes, a former senior executive at chemicals group ICI. Non-executive directors include Catherine Bell, a former permanent secretary at the Department of Trade and Industry, Alan Kingsley, a former senior partner at KPMG, and Karen de Segundo, until recently chief executive of Shell’s renewable-fuels business.

Bioethanol is a type of alcohol made by fermenting crops such as sugar cane, corn and wheat. It — and other biofuels such as biodiesel — are increasingly seen as a partial solution to climate change because they reduce overall emissions of damaging greenhouse gases.

Demand for biofuels is expected to rocket in Britain and Europe. New legislation demands their blending with conventional petroleum-based fuels.

Biofuels benefit from a 20p-a-litre tax rebate and last year the UK introduced the renewable transport fuels obligation, which will force fuel distributors to use 5% biodiesels by 2010.

If they do not meet the target, to be phased in from 2008, they will pay a penalty of 15p a litre. It will be raised later to 30p.

Similar measures by other governments mean world production of biofuels is expected to grow from the 20m tonnes achieved last year to nearly 50m by 2010.

Ensus will use wheat as its main feedstock. Hughes said: “There is a significant grain surplus in Europe already, and we have the farming sectors in the new accession countries coming on line shortly.”

A deal has been struck with international trading group Glencore to supply wheat, while engineers Simon Carves will build the Teesside plant on a 30-acre site.

As well as ethanol, the plant will produce a protein-rich animal feed as a byproduct. Ensus plans to produce its first fuel towards the end of 2008.
 
http://www.timesonline.co.uk/article/0,,2095-2449652,00.html

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