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HAMBURG (Reuters) - Sued-Chemie will build a next-generation bioethanol plant to produce the green fuel from straw, the German chemical company said on Wednesday.

The pilot plant will cost about 28 million euros ($36.14 million) and will produce about 2,000 tonnes of bioethanol annually, the company said. German government support totaling 12 million euros is being given to the project.

It will be completed in late 2011 at Straubing in south Germany and will be used to demonstrate and test new production processes.

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