The £3.5 million study provides engineering details to build a plant at its Seal Sands site in the Tees Valley. Once completed, the study will inform an investment decision for a bio-ethanol and bio-energy plant using INEOS Bio technology.
It is being supported by the Department for Energy and Climate Change and the Regional Development Agency One North East, which has given it a £2.2 million grant.
INEOS Bio chief executive Peter Williams said: This is a very exciting project. Converting household organic wastes into bio-fuel and clean energy can deliver very attractive environmental and social benefits to the North East and the UK as a whole. 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 net carbon emissions and without competing with food production.
The INEOS Bio technology uses gasification to convert gases derived directly from biomass into ethanol to use as bio-ethanol.
Energy and climate change minister David Kidney 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.
It is hoped that if the plant is eventually constructed, subsequent expansion could turn the plant into a fully integrated bio-refinery by 2015.