THE Tees Valley bioethanol industry could produce almost as much of the green fuel as the current output of the entire European Union within the next three years, it has been forecast.

Dermot Roddy, chief executive of renewable energy company Renew Tees Valley, has predicted Teesside will lead the way in the developing industry following a series of developments.

He said: "We now have the foundations for an industry with the potential to produce 800 million litres of biodiesel and a similar quantity of bioethanol by 2009."

Since September, four companies have announced plans to invest a total of about £400m in bioethanol plants in the Tees Valley, and negotiations are under way with three more potential investors.

Teesside-based Biofuels Corporation - which brought a biodiesel plant capable of producing 284 million litres a year to Seal Sands earlier this year - has also announced plans to build two additional production units on an adjacent plot, which would produce 230 million litres of bioethanol annually.

D1 Oils successfully commissioned four of its own-design biodiesel refineries at Middlesbrough earlier in the year, and is now proposing to add modular units to increase production more than threefold to an annual total of 114 million litres next year.

Tees Valley Biofuels has also secured planning permission to build the UK's first £47m oilseed crushing plant for more than a generation at Seal Sands, which will process more than 500,000 tonnes a year of locally-grown oilseed rape.

The plans will be supplemented by plans, backed by Centrica, to develop a carbon capture and storage facility for a new generation of coal-fired power stations.

Dr Roddy said: "While we have been working on many of those projects for a considerable time, it is in the past few months where we have seen many starting to come to fruition - and the coming year also promises further developments which will strengthen Tees Valley's position as the UK's key centre for renewable energy technology and production."