INTERVIEW-Spain's Abengoa to sell cellulose ethanol in 4 yrs

MADRID, Oct 15 (Reuters) - Spanish energy company Abengoa (ABG.MC) could start selling cellulose ethanol in four years from a new plant it is building in the United States, the chairman of the firm's renewables subsidiary said on Monday.

Industrial production of cellulose ethanol -- using vegetation like wood, switch grass or straw -- is seen by many as preferable to producing biofuels from cereals, alcohol or sugar aS it will not put the same pressure on world food prices.

Abengoa Bioenergia said on Monday it will build and open the biomass ethanol plant in Hugoton, Kansas after signing a contract with the U.S. government for $38 million to fund the first stage of the plant.

The U.S. government's Department of Energy will later provide further subsidies for the plant to bring its total investment to $76 million.

"The construction (of the plant) will take no less than two years, so we are talking about three-and-a-half to four years", chairman Javier Salgado told Reuters/EP.

Abengoa will refine its methods of producing cellulose ethanol at a pilot plant which it opened last week in the state of Nebraska.

"In the pilot plant we are going to try to reduce costs and try new primary materials because we want the plant to be able to process various (materials), including the bagasse (waste) from sugar cane", said Salgado.

Over the next five years, Abengoa plans to invest more than $500 million on research and development into cellulose ethanol production.

Made from biomass, cellulose ethanol emits between six to eight times less CO2 than traditional ethanol produced from cereals, alcohol or sugar.