THE UK’s first bio-refinery could be built in the region in a move that would create hundreds of jobs, it was revealed last night.

Ineos Bio is carrying out a feasibility study into whether a plant could be built at Seal Sands, on Teesside, which would convert household and commercial wastes into carbon neutral fuel and green electricity.

The refinery, which could be operational by 2015, would be the first of its type in the UK, and would see hundreds of millions of pounds of investment in Teesside as well as the creation of hundreds of jobs.

The £3.5m feasibility study, supported by the Department for Energy and Climate Change (DECC) and a £2.2m grant from regional development agency One North East, will be completed next year, when a decision will be made on whether to go ahead with the construction of the plant, which will produce bioethanol and bio-energy.

Negotiations have been under way for more than a year between Ineos Bio, One North East, the Government and the North-East Process Industries Cluster to reach this stage.

The announcement comes as a further endorsement of the region’s rapidly-developing green sector, which includes the development of electric cars and the creation of a £12m industrial biotechnology (IB) centre at Wilton and the refinery would supplement the established biofuels sector on Teesside.

It is a major boost to the Teesside process sector, which has been hit by two plant closures, two closure announcements and questions hanging over the future of another two, with the loss of more than 600 jobs, in recent months.

Last night, the announcement was hailed by David Kidney, Energy and Climate Change Minister, who said: “This is an important project for DECC, the first of its kind in the UK. If successful, the bio-refinery technologies being demonstrated will play a significant role in helping us meet our ambitious renewable energy targets, as well as reducing waste.”

Ineos, which already has a plant at Seal Sands, said it had looked at possible sites around Europe for the potential biorefinery, but is looking at Teesside as its first option.

Peter Williams, chief executive of Ineos Bio, said: “Essentially, our aim is to provide bio-fuel for cars and bio-energy at competitive cost without harming the environment, with very low or zero carbon emissions and without competing with food production.”

Alan Clarke, chief executive of One North East, said: “This project offers a very exciting opportunity in the process industries in the Tees Valley, which continues the positive theme of recent investments in this important sector.

“Biotechnology and biofuels are central to the low carbon future of the process industries.”