BP plc announced that it will develop a $400 million bioethanol plant in northern England in partnership with E.I. du Pont de Nemours & Co., parent company of Pioneer Hi-Bred International Inc., and Associated British Foods plc, Reuters reported.

Starting in late 2009, the plant will produce about 420 million liters of ethanol per year from wheat. This will help meet the United Kingdom’s government regulation that 5 percent of motor fuels must come from renewable sources by 2010. Lain Conn, head of BP’s refining operations, said government incentives will make the project profitable at oil prices of $40 per barrel and even more profitable at today’s level of around $70 per barrel.

BP and DuPont have also agreed to construct an adjacent facility to research and produce biobutanol, an advanced biofuel that is currently expensive to manufacture. The partners hope the new plant can later be converted to produce biobutanol from non-food sources.