Grimsby or Hollywood? For most, it’s not much of a choice. Tim Levy is the exception.

As head of Future Capital Partners, a Mayfair investment firm, he has spent the past decade lining up financing for more than 300 films, including blockbusters such as Iron Man 2 and The Bourne Ultimatum. Today he is excited about a vacant lot in the gritty Lincolnshire port.

Levy wants to build a refinery there that will turn wheat into petrol. The plant, he argues, will be a boon to British farmers, who will provide the feedstock, and produce millions of litres of low-carbon fuel for our cars and lorries.

What he needs now is money: the plant’s price tag is £220m. “We raise money for films from about 4,000 wealthy individuals, each of them putting in about £200,000. Co-ordinating that is ridiculously complex, but we are good at it and it gave us the appetite to branch out,” said Levy. “We consciously set out to do things that others would shy away from. This qualifies.”

The pitfalls of biofuels are well known. Environmental campaigners have lambasted developers for razing forests and sensitive ecosystems for plantations. Turning plants into fuel is often more polluting than burning petrol, and using crops for fuel when millions are starving is hard to justify.

Vireol, the company set up to build the refinery, has an advantage, Levy argues. Britain is better than most at growing wheat. In an average year we export nearly a fifth — 3m tonnes — of our 16m tonnes of annual production. The Grimsby refinery would need 530,000 tonnes a year, and it runs on “feed wheat”, a lower grade generally not used for human consumption.

“We grow feed wheat more efficiently than anywhere else in Europe because it needs rainy, mild weather,” said Levy. He hopes construction will begin this summer.

Farmers love the idea. Some environmentalists don’t. They argue that large-scale bioethanol plants will inevitably lead to the clearing of forests to make way for new crop land.

Kenneth Richter of Friends of the Earth, the campaign group, said: “If they are using all this wheat there will be knock-on effects. They will need to create more agricultural land. Biofuels are not the right way to reduce transport emissions.”

Ruth Digby of the National Farmers Union shrugged off those concerns. She said that Vireol and two other new wheat-to-ethanol plants would not eat into supplies destined for our biscuits and bread.

Data from the companies suggest otherwise. Ensus, which last week shipped off Britain’s first batch of domestically produced biofuel from its Teesside plant, expects to consume 1.2m tonnes of wheat a year. The other facility, being built in Hull by BP and Associated British Foods, will need 1m tonnes. With Vireol’s 530,000 tonnes-a-year appetite, the plants will gobble up 2.7m tonnes — nearly all the 3m tonnes we ship in a good year and a fifth of Britain’s total crop.

In bad years, such as 2007 when flooding led to a poor harvest, we export as little as 500,000 tonnes. Digby downplayed the potential for a wheat crunch. She said: “There is potential to increase our yields, by investing in crops in the ground, by using more efficient farming techniques and by investing in technology.”

For potential investors, it is a legitimate concern. When Vireol first went looking for money three years ago, the commodities boom had pushed wheat from $70 a tonne to $250. Nobody would go near it. “When they came to us, 70 financiers had already turned them down,” Levy said. “We were probably last on their list.”

He thought the price spike would be temporary. It was, and he is convinced that there is enough room in Britain for all three bioethanol projects. Others agree. He claims to have already signed deals worth £1.5 billion with three companies to take all the plant’s output for 15 years.

Besides ethanol, it will produce a byproduct, animal feed, that can replace the soy that is today shipped from as far away as South America to top up protein-poor wheat. The liquid carbon dioxide it produces can be used in soft drinks and industrial processes.

The key, of course, is the fuel. Under the European Union’s Renewable Transport Fuel Obligation, by 2020 10% of our fuels must come from renewable sources, up from 3.5% today. The Grimsby plant would produce 200m litres, hardly a dent in the 25 billion litres we are expected to be burning across Europe by the turn of the next decade.

Some have already bought into the idea. Banks and vendors have agreed to put up £180m of the building cost, leaving a £40m equity gap for Levy to bridge. He is leaning hard on his contacts.

And then there are the films. The firm is in the middle of raising cash for Medieval, described as “The Magnificent Seven in the Middle Ages”. It is perhaps not a comparison that favours a plant that mashes up plants and turns them into alcohol. But Levy is confident.

“There is a shortage of people that have the imagination and money to back something like this, but it’s exactly the kind of thing we go for,” he said.