The licence also allows the Perth-based company to produce palm fatty acid distillate and glycerine, as by-products of the biodiesel production process.

In addition, Mission said the Government was considering its application for 100% pioneer tax status for this new facility. If granted, this will exempt the company from paying income tax on all statutory revenue for five years.

Mission says it has also exercised its option to lease an additional 24,000 square metre site next to where its first 100,000tpa biodiesel plant is being constructed. The 22-year lease for the site will be on similar terms to its existing lease agreement with the Kuantan Port Consortium and is expected to start from September.

Construction of the biodiesel plant started on the weekend, the company said. The plant will use crude palm oil as its feedstock, which Mission estimates as $270 per tonne cheaper than rapeseed oil – the predominant feedstock used by its intended competitors in the European biodiesel market.

A five-year offtake agreement has already been secured between Mission and European commodity trader Godiva for up to 250,000tpa of its biodiesel production, far exceeding its initial proposed production capacity.

The company claims that if the proposed Malaysian plant operates at 80% capacity over the nine months after it has been commissioned, the intake/offtake agreements in place should generate $A74.3 million revenue in fiscal year 2008, delivering net profit after tax of $27.7 million.