Aussie biodiesel company, Natural Fuel, has broken ground for a new facility at Singapore's Jurong Island, that will become the world's largest biodiesel plant.

The US $130 million refinery will produce 'green' diesel from rape seed and is expected to produce 700 million litres of biodiesel a year.

While in the future it is hoped that engines will be developed that can run exclusively on this clean fuel; biodiesel is currently added as a 5% mixture to normal diesel fuels in a bid to cut down on green house gases produced from combustion.

The company intends to employ up to 50 local graduates to look after various aspects of its operations here.

Mr Lim Siong Guan, Chairman of the Economic Development Board, said: "Natural Fuel's choice of Singapore validates Singapore's value proposition as a location with access to regional feedstock, comprehensive trade links and beneficial international agreements."