Green fuel deal in pipeline

Shell is investing £20m in the project

A £100m project to produce fuel from wood shavings could soon be available at the pump.

Oil giant Shell is investing £20m into the world's first bioethanol plant using wood shavings as source for the environmentally-friendly fue, which may be based in the UK.

Canadian company Iogen Energy Corporation wants to develop the fuel which promises to cut harmful greenhouse gas emissions from cars.

The company says the plant would create a hundreds of jobs and boost the local rural economy.

Its president, Brian Foody told BBC Radio 4's Today programme: "The way it's made is a natural way, therefore it has a very small environmental footprint.

"The fuel itself, when it's included in the fuel mixture in your car, has no net greenhouse gas emissions."

Greenhouse gases

The fuel is made from fermented sugars derived from plant fibre in wood and straw.

Car engines do not need to be adapted to take the fuel.

But cars would emit 90% less greenhouse gases such as carbon dioxide than by using conventional gasoline, said Shell.

A spokesman said it was too early to say when motorists would be able to use the fuel.

"This is the first step on a long road, but we wouldn't be doing it if we didn't think there was the potential," he said.