German firm plans new-generation biodiesel plant

HAMBURG, Dec 13 (Reuters) - German company Choren Industries is to build a biodiesel production plant using new second-generation technology at a cost of over 500 million euros, a company executive said on Thursday.

The plant will be located in Schwedt in east Germany and an announcement about the project will be made on Dec 18.

Choren will produce biodiesel from low cost waste materials in the second-generation biofuel production process called biomass to liquid (BTL).

The new plant will produce about 200,000 tonnes of BTL biodiesel annually. Construction could start in 2008 and production in late 2010.

Established first generation biodiesel producers largely use vegetable oils such as rapeseed, soyoil and palm oil.

As such agricultural raw materials are highly expensive and are also in high demand as food, some observers believe the second generation using cheaper waste vegetable raw materials presents better long term potential for biofuel production.

About one million tonnes of BTL raw material such as wood, wood chips and sawdust will be consumed annually by the new plant in Schwedt.

This would be the first of five 200,000 tonnes production units by which the company plans to raise its total output to around one million tonnes of BTL diesel by around 2015.

Choren's first major plant will start commercial-scale production in spring 2008 of 15,000 tonnes of BTL green diesel annually at Freiberg in east Germany using around 65,000 tonnes of wood and wood chips as raw material annually.