from ABC

Local grain crops expected to be used as feedstock. Ethanol should be produced from sugar

cane not food crops

Australia’s recent free trade agreement with Korea has improved the prospects for a $90 million ethanol plant in south-west New South Wales.

Korean investors are close to signing off on the development in Deniliquin, which will produce fuel and by-products from grain sourced within a 400 kilometre radius.

Photo: Members of the Deniliquin Council, Korean financiers and Korean firm Dongmun IRS meet in the southern Riverina to discuss their plans for an ethanol plant.

Audio: Ethanol plant developers close to securing finance (ABC Rural)

The plant will have the capacity to produce 110,000 kilolitres of ethanol each year and most of it will be exported back to Korea.

Joo Sung Ho, managing director of Dongmun IRS, says the free trade deal will remove a 20 per cent tariff on imported oil, a big financial incentive for the project.

"Without free trade agreement between two countries, it is impossible to export ethanol, from here to Korea.

"But now, I think I can export our ethanol to Korea from Australia.

The plant is expected to generate at least 50 permanent jobs.

Plant developers hope to start construction in May, but the project still needs approval from the NSW Government.

The Deniliquin Council is also seeking state and federal government commitment for a natural gas pipeline to provide gas for the plant.

Mayor Lindsay Renwick says without a gas connection, the company would have to truck in three b-doubles of natural gas a day to run the operation.

He says rice processor SunRice has also flagged its support for a natural gas connection to run its mill in Deniliquin.