The government of P.E.I. announced Thursday there will be no approval for an ethanol plant on the Island for at least several months.

'We're not jumping into anything.'— Premier Robert Ghiz

The announcement throws a wrench into the business plans of Atlantec BioEnergy, a group hoping to start production of ethanol on the Island using sugar beets this year. For that to happen, approval would need to come before the planting season.

"The original plan was to plant sugar beets obviously in late April, early May," said communications manager Ron Coles.

"By mid-June we'd start stocking our plant. The equipment starts arriving from Europe in August. Assembly would start late August. Actually, the beets would be harvested in October and by mid-November we'd be processing ethanol on P.E.I. and ready for sale Jan. 1."

The sugar beet plant would have been the first of its kind in the world, but Premier Robert Ghiz said he's not sold on the idea of ethanol production on Prince Edward Island just yet.

"We're not jumping into anything as a government," said Ghiz.

"We're going to make sure that there'll be public consultation and engagement on this."

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Ron Coles said his company will have to make a decision quickly. ((CBC))

Ghiz said his government is reviewing the pros and cons of a biofuels plant. A report will be released by late spring or early summer, and that will be followed by a series of consultations before a decision is made.

Atlantec BioEnergy has already designated 5,000 acres of land for sugar beet crops on P.E.I., and raised $2.5 million for research. Coles said with the planting season just two months away, the company will have to make a decision within the next few days.

"We have a business plan that we want to follow, and we're not going to say today that we're leaving P.E.I. or considering not building here," said Coles.

"We'll talk to government over the next couple of days and see what their thoughts are and then we'll make a decision based on that."

In the meantime, local opposition to the plant is growing. Leo Broderick of the Council of Canadians was part of a delegation that met with the premier Thursday to discuss environmental concerns.

"We will continue to inform the public that an ethanol plant on Prince Edward Island is bad," said Broderick.

"It's harmful to the environment, it's destructive of our groundwater and we need no more industrial agriculture in the province."

The federal government has put up $50 million to assist farmers interested in investing in an ethanol plant. That program runs out at the end of March. The government had previously said it would make a decision on the future of an ethanol plant before then.