The government has launched a competitive bidding process for companies to construct the UK’s first biofuel plants.

A total of £25 million, from government grants and private sector investment, is available for three projects to be delivered over the next three years.

The winning bidders will have to show that their proposal would produce at least one million litres of biofuel each year and has the potential to be up and running by December 2018. The biofuel produced must provide a 60 per cent reduction in greenhouse gases compared to fossil fuels.

The process will involve detailed expressions of interest, which must be received by February 13th 2015. Full tenders will then need to be submitted by June 2015.

Transport minister Baroness Kramer announced the competition, saying: “Advanced biofuels will play an increasingly important role in lowering carbon emissions from transport and these fuel plants will help ensure the UK is leading the way in building our capacity.”