Bio Wales has been set up in Swansea by businessman Llyr ab Islwyn with the help of the Wales Environment Trust.
He has applied for planning permission for a purpose-built plant on a 4.4-acre site on the M4 corridor. If successful, production could start in the spring.
The plant will transport vegetable oil into environmentally friendly bio-diesel. The move has been made possible by a 20p reduction in duty on bio-diesel, and falling prices of used vegetable oil.
‘Bio-diesel does not have a negative effect on fuel consumption and runs effectively in the majority of engines,’ explained ab Islwyn.
‘And most importantly there are no vehicle modifications needed in order to use it.’
He added: ‘The UK market for diesel is 1,860 million litres every month so I am confident that we can help the people in Wales by bringing environmental and cost benefits to all users.’