OREANDA-NEWS. South Korea's Dongmun Greentec plans to build an 115mn litre/yr (1,980 b/d) ethanol plant in the New South Wales (NSW) town of Deniliquin using Australian wheat as feedstock.

The A$90mn ($65.7mn) project is designed to process about 300,00 t/yr of locally grown wheat. The plant will also include several grain storage silos and will operate for 330 days a year.

Dongmun Greentec is the Australian subsidiary of South Korean firm Dongmun IRS, which constructs anaerobic fermentation facilities. Australia's main ethanol producers are NSW private-sector firm Manildra, private-sector United Petroleum and the Wilmar Sugar subsidiary of Singapore-based Wilmar International, based in Queensland. Manildra is the largest producer and supplies around 69pc of Australian production.

Australian-produced ethanol supplies around 1pc of the country's road transport fuel market. The E10 grade ethanol is sold in NSW and Queensland.

A report commissioned by the federal government last year concluded that the country's ethanol production grants (EPG) programme, which has been in operation since 2002, means that the domestic ethanol sector is reliant on subsidies. The EPG is scheduled to continue to 2021. The EPG programme is only available for domestic producers.

The NSW government is seeking feedback on the Deniliquin ethanol plant with submissions closing on 12 November.