Initially, the publicly listed company will make biodiesel from animal fat, but said it later hopes to expand into oilseed crops.

The company would index the canola contracts to oil prices, according to managing director Darryl Butcher.

"We're looking for five-year contracts and we're willing to link those five-year contracts to the price of mineral oil," said Butcher.

ARF said the construction of Australia's biggest biodiesel plant would produce 45 million litres of biodiesel a year. The company also has plans to build five more of these facilities around the country.

Construction began in June this year and the plant is expected to come online next month, ARF said in May.