A RURAL enterprise has received funding to become involved in the biofuel supply chain.

RMD Agriculture, in Sedgefield, is one of five businesses in the North-East to receive a grant from the Rural Development Programme for England for a range of related activities from buying harvesting and transport equipment, to building weatherproof stores.

The money, aimed at increasing the region’s capacity to supply wood for biomass plants, has been awarded in the first funding round of the £1.2m project.

The biomass sector has the potential to contribute more than £75m a year to the regional economy by 2015 and the biofuels industry as a whole could be worth £1bn regionally by 2027.

However, farms and forestry businesses wanting to expand into biomass are often small or micro enterprises, with limited resources to invest in the training and equipment needed.

John Seymour, rural affairs spokesman for the North-East Biofuels consortium, said: “The more that can happen in the North-East, the better. It is very much the biofuels hub of the country and not just with liquid biofuels. We are looking to make this the major biofuels hub for biomass.”

Project officer for the grants, Jennifer Hewitson, said: “We’re really pleased with the range of applications submitted in the first round and this high level of interest is evidence of the growth in the biomass sector in the North-East.

“Improving supply chains will allow the industry to pick up momentum, making sure current and future demand for biomass products can be met by local businesses.”

The largest biomass plant in the North-East is the Wilton 10 biomass boiler at SembCorp on Teesside.

Ensus, of Yarm, near Stockton, is building a £300m bioethanol plant at Wilton, near Redcar, in east Cleveland, which, when operational, will buy 1.2 million tonnes of wheat from farmers, including many who will be local.

The Rural Development Programme for England, which is jointly funded by the European Union and Department for Environment, Food and Rural Affairs, is managed in the region by One North- East, Natural England and the Forestry Commission.

The deadline to be considered for the next round of funding is February 17. For more details, call 01670-790444.