LONDON (Reuters) - Biofuels producer Ensus said on Tuesday it was in the process of taking its bioethanol plant in northeast England off line due to adverse market conditions.
"We regretfully confirm that due to continuing adverse market conditions, we are having to temporarily pause production at our plant," a spokesman said.
"At this stage, we don't know how long this pause will be, but we hope that market conditions can improve and that the plant will become operational again in the near future," he added.
Ensus owns one of Europe's largest bio-refineries with the capacity to make about 400 million to 450 million litres of bioethanol a year from about 1 million tonnes of feed wheat.
The plant can also produce up to 350,000 tonnes of animal feed and 300,000 tonnes of carbon dioxide, mostly for use in beverages.
Biorefining breaks down the starch stored in wheat or maize to sugars, which are fermented into alcohol in a similar process to a whisky distillery. Bioethanol is a type of alcohol that can be used as a substitute for petrol.
Ensus is owned by U.S. private equity funds the Carlyle Group and Riverstone.
"Unfortunately, the European ethanol market continues to be challenging as the price of ethanol has not risen in line with input costs," the spokesman said.
"In the UK the poor wheat harvest in 2012 has also had an adverse impact on the quality and price of the feed wheat feedstock used within the plant, while rising gas prices have pushed our costs up considerably."
The company had to add about 20 to 30 percent maize to its feedstock to improve the quality following last summer's poor quality UK harvest.
The plant started operations in February 2010 but shut for 15 months from May 2011 until August 2012, also due to adverse market conditions.
(Reporting by Nigel Hunt; editing by Jane Baird)