A BIOFUELS company is poised to make a multi-million pound investment in the region creating hundreds of jobs.

Somerset-based Wessex Grain is looking at sites on Teesside to build a bioethanol plant, converting wheat into ethanol, also known as ethyl or grain alcohol, which can be mixed with petrol to make biofuels.

Three other biofuels companies are expressing an interest in investing in the region, The Northern Echo has learned.

Wessex, which attended the North-East Biofuels dinner last week, is carrying out a feasibility study on building the plant on Teesside.

It is expected to make an announcement later this summer. The plant would create 70 jobs directly and another 200 in the supply chain.

The three other companies seem likely to follow suit, with Renew Tees Valley predicting that the sector will be worth £2bn to the North-East economy and employ more than 10,000 people within five years.

The revelation came after it emerged yesterday that Progressive Energy is planning to build a "clean" coal station on the banks of the Tees, creating more than 100 jobs.

The plant will "gassify" coal, rather than burn it, creating electricity and also hydrogen, which could then be used in hydrogen fuel cell technology being developed in Teesside.

Instead of being released as a greenhouse gas, the carbon dioxide produced in the process will be collected and sold to be used in oilfields in the North Sea.

Business leaders are approaching biofuels and renewable energy companies around the world, convincing them that Teesside has the right skills and supply chain for the expanding renewable energy industry.

The Biofuels Corporation is already building Europe's largest biodiesel plant, at Seal Sands, Teesside, and has recruited 70 workers.

The company, listed on the Alternative Investment Market, was set up on Teesside by Australian businessmen who were impressed by the region's ability to support the industry, and invested £25m in the plant.

A consortium of local companies, North-East Biofuels, is also looking at building another factory that would produce rape seed oil that would supply the Biofuels plant.

Dermot Roddy, Renew Tees Valley chief executive officer, said the other companies were attracted because there was a plant being built on Teesside, which they could potentially supply or use as a supplier.

He said: "We need lots of things to come together, with biodiesel being manufactured, feedstock being grown by farmers, and the different companies all being able to supply each other, in the same way that the chemical industry works.

"There is room for up to five renewable fuel plants on the land that the Biofuels Corporation is building on, and we are optimistic that will happen.

"We have the second-largest port in the UK, which is an attraction, and we have skills that are transferable across the chemical and renewable energy sector."

The renewables sector employs about 6,800 in the Tees Valley area, with turnover standing at £370m a year.

Mr Roddy said: "We reckon the jobs figures will easily be 10,000 within five years.

"We have the Biofuels Corporation, I think there will be an announcement within a month or so about a second company, and once we have a few companies in place, in terms of inward investment, others will start coming here too."