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Former directors from the Stockton firm were involved in setting up biofuels company Vireol, which is poised to build an £80m plant in Teeside over the next two years ready by summer 2008.

It will produce 150,000 tonnes of bioethanol per year and is being project managed by Baker Mallett. Former BM partner and Vireol project director Ged Russell said while bioethanol is a promising business opportunity, it is "also a good thing to be doing".

"There's loads of support from local authorities, agencies like the Environment Agency and the planning authorities," he said.

Four bioethanol plants are planned for the UK by 2008 and more could be in the pipeline. Currently the UK has no such plants, preferring to import from big producers like Brazil.

There’s loads of support from local authorities and the Environmental Agency

Ged Russell, Vireol

But the government's renewable transport fuel obligation means that UK petrol must have 5% renewable content by 2010. Therefore, bioethanol supporters say the country needs a guaranteed supply. Bioethanol is made by fermentation and is the principle fuel used as an eco-friendly petrol substitute for road transport.

It can be mixed in up to 15% with petrol to run in conventional cars, and around 85% in their flexi-fuel cousins. Two plants have planning permission so far, but others look set to follow: British Sugar has started work on a £20m plant at its Wissington site which, when complete in February 2007, will produce 55,000 tonnes of bioethanol from sugar each year.

Green Spirit Fuels has permission for a 100,000 tonnes per year plant in Henstridge, which will produce the fuel from grain. And French starch firm Roquette is set to spend over £41m on a 95,000-tonne plant at its starch refinery in Corby that should be in production in early 2008.