CBH Group, the country’s largest co-operative, is preparing to derail GrainCorp’s ambitions of becoming a major biofuel player, closing in on a partnership with BP that would involve building its own large-scale oilseed crushing plant in Perth.

The move would also stymie GrainCorp’s push to extend its operations from its traditional base along the east coast into Western Australia. The ASX-listed group has outlined plans to spend several hundred million dollars on a plant in WA and has been in negotiations about securing a site, canola supply and a partnership with BP and others.