The Envosmart plant will use the ThermoFuel “waste plastics to diesel fuel” system under licence to Australian developer and manufacturer Ozmotech. The contract also includes exclusivity of operations in several European countries including Germany, Poland and Belgium.

The $A191 million agreement signed between Ozmotech and Envosmart earlier this month calls for Ozmotech to manufacture and install 31 ThermoFuel systems at 15 separate locations over four years.

Envosmart said it has seen "tremendous interest" from European investors interested in the technology, which produces low-sulphur diesel from unsorted plastic waste that would otherwise be destined for landfill.

“The plastic we use would normally be going to landfill or incineration. We do not use any plastic intended for recycling. So we are giving the material a new life cycle," said Envosmart chairman John Bouterse.

Ozmotech told EnvironmentalManagementNews.net that each of the ThermoFuel systems has a production capacity of 20 tonnes a day, and the first installation in Germany will include six ThermoFuel systems.

The plant will be located near Berlin, representing a €40 million ($A67.2 million) investment, with production scheduled for the second quarter of 2007.

The facility is expected to produce 38 million litres of diesel per year from 420,000 metric tonnes of plastic waste.

Similar plants will come on line in Holland, Poland and Sweden in the same year, and then in a host of smaller EU countries.

The two companies claim that plastics, including those difficult to recycle, are liquefied, thermally treated at around 400C and condensed into a low-sulphur fuel.

The ThermoFuel system converts waste plastics into diesel fuel that complies with international fuel and EPA standards.

When the contract was signed earlier this month, Ozmotech chief executive Garry Baker said the sale was the culmination of almost two years work, firmly establishing Ozmotech as a major Australian exporter and an innovative contributor to the production of alternative fuels around the world.

In Australia, the Ozmotech technology has been licensed to alternative energy company Axiom Energy, which was forced to withdraw its prospectus last year when it became evident that the Australian Treasury would levy a full fuel excise on plastic-to-diesel and the product was not eligible for the same concessions given to biofuels.

Ozmotech spokesman Marc Middleton said Axiom and Ozmotech submitted new proposals to the Department of Environment & Heritage, Treasury and the Australian Tax Office in January.

“We’re expecting to hear back from them sometime in the next four to six weeks,” he said.