Kauai Ethanol had planned to break ground on a planned $35 million facility in January or February at Kaumakani, about four miles west of Hanapepe. However, delays in obtaining needed state and county permits has delayed the project, said William Maloney, president of project developer Pacific Quest Energy LLC.

"We're basically ready to go — at this point it's just the permits," Maloney said.

Obtaining required permits is taking longer than originally anticipated in part because Kauai Ethanol would be Hawai'i's first ethanol plant, he added.

"I think that's a big part of it," Maloney said. "I don't think there's any issue relating to the permit that's creating an impediment."

Production could begin about 14 months after groundbreaking.

Ethanol is an alternative fuel that can be produced locally from sugar cane or one of its byproducts.

None of the five companies that pledged to build ethanol plants in Hawai'i has broken ground yet.

The plant at Kaumakani would produce 12 million gallons of the alcohol-based fuel annually, or 30 percent of what is needed to satisfy demand for ethanol created by a state mandate that took effect last April. Since April, the state has required that most gasoline sold contain 10 percent ethanol. The mandate is supposed to reduce Hawai'i's dependence on imported oil.