A company planning to build the world's largest renewable fuel plant posted its maiden results yesterday.

Biofuels Corporation, of Billingham, on Teesside, which floated on London's junior stock market in June, said work was due to be completed on its first £21m plant in Seal Sands, Teesside, by April, with full production starting in June. Biofuels' stockbrokers Collins Stewart said that because they were the first results, they had little relevance.

But they said that on the basis of those first results, Biofuels was expected to make more than £20m operating profit over a full year.

A spokesman said: "The background papers to the pre-Budget tomorrow could include details of further measures to promote the use of biodiesel."

This could include a further cut in the duty on biodiesel, the provision of capital grants and a possible biofuels obligation to require or give incentives to fuel suppliers to put a minimum biofuel content into mineral diesel.

Biofuels chairman Field Walton said in a statement to shareholders that a number of options for a second biodiesel plant were being studied.

The Seal Sands plant will process feedstocks from crude palm oil to refined rapeseed oil before mixing it with mineral diesel. It will then be sold by independent fuel distributors and supermarkets.

Financial results for the six months to September showed a loss of £1.8m, representing pre-production and administrative expenditure during he finance-raising and construction phase.

Cash inflows during the period amounted to £6.7m, of which £12.3m represented net inflows from the share placing, offset by £4m capital expenditure and £1.6m operating expenses. Petroplus has signed a five-year contract for 365,000 tonnes of biodiesel with Biofuels.

Discussions are continuing with other potential customers, Mr Walton said.

It is hoped the new plant will place Teesside at the heart of the renewable fuel industry.