"We have the technology, we have the material to build the plant, but legislation does not allow for it yet," Madis Olm, Estonian representative of Varmlandsmetanol AB, told BNS. "As the plant would cost €350 million, nobody will invest in anything before it is certain that it would be possible and profitable."

According to Olm, before making any more detailed plans, the company needs to discuss with the Estonian government whether it would be possbile to tax biofuel less and whether legislation could be amended to allow for the production and sale of fuel containing three to 30 percent methanol.

Olm said that construction of the plant, which would produce biomethanol from forest residue, would cost approximately €350 million and take three years to complete.

According to the representative, while the company first contacted then-Minister of Entrepreneurship and Information Technology Liisa Oviir under the previous government, the topic died down after a change in government.

"[Minister of Entrepreneurship and Information Technology] Urve Palo has not responded to our letters," Olm said. "She wanted to know if the money was on the table and we said that the money could not be on the table before we knew the project is possible. We have now turned to [Minister of Economic Affairs and Infrastructure] Kadri Simson, who was willing to listen to us."

He added that Varmlandsmetanol AB CEO Björn Gillberg will likely meet with representatives of the Ministry of Economic Affairs and Communications in October.

Founded in 2001, Varmlandsmetanol AB is the Swedish parent company of a plant which produces biomethanol meant for vehicle fuel from forest residue. The company is not listed and has 1,600 shareholders.