BP drops $300m US ethanol plans

Oil super major BP has dropped plans for a $300 million (£190 million) cellulosic ethanol plant in Florida, US, announced in 2009. The plant would have had a production capacity of 36 million gallons per year.

The company says it no longer plans to pursue commercial scale production of the fuel in the US, preferring instead to focus efforts on two R&D plants and licensing its existing biofuels technology.

‘Given the large and growing portfolio of investment opportunities available to BP globally, we believe it is in the best interest of our shareholders to redeploy the considerable capital required to build this facility into other more attractive projects,’ said Geoff Morrell, BP vice president of communications.

In April, Shell dropped its plans to build a commercial scale cellulosic ethanol plant in Manitoba, Canada.

Cellulosic ethanol is produced from non-food plant material, such as for example wood, switchgrass or the inedible parts of food crops discarded during food production.