A new bioethanol plant due to start up in the UK in the first half of 2009 will be the largest in the European Union.

The plant will be built by a company called Ensus. Its CEO Alwyn Hughes told Reuters that the plant, which the company is building in Wilton, northeast England, will make bioethanol and a protein rich animal feed co-product from the UK’s wheat surplus.

The plant will produce around 330,000 tonnes of bioethanol, more than the current largest facility operated by British Sugar, which has an annual capacity of around 55,000 tonnes.

Ensus is a start-up company acquired last year by two US private equity funds, The Carlyle Group and Riverstone. It has a contract to sell all the bioethanol produced in Wilton to Royal Dutch Shell.

Reuters said the plant is expected to supply one-third of UK demand for ethanol under Britain’s Renewable Transport Fuels Obligation (RTFO) which mandates that 5% of motor fuel should come from renewable resources by 2010.

The RTFO is currently under review because of concerns that biofuel production is pushing up food prices and leading to deforestation in some parts of the world.

Hughes said that the Ensus plant should provide carbon savings of around 70% compared with fossil fuel alternatives, using current UK sustainability measuring methods.

The Ensus plant may be influential in the outcome of the RTFO review. If it can be proven that there is enough ‘good’ biofuel available to meet the obligation, and that fuel does not have to be imported from Brazil, for example, then the legislation will be more viable.

Two other major facilities are already planned. British Sugar, BP and DuPont have announced plans to build a bioethanol plant at Hull in eastern England with an annual capacity of about 330,000 tonnes from late 2009.

Spanish energy and engineering group Abengoa has announced plans to build a plant in Immingham in northeast England with a capacity of about 315,000 tonnes of bioethanol from 2010. Both of those plants are also expected to use wheat as the main feedstock, according to Reuters.