02/12/2007 (Sydney Morning Herald) - A Finnish firm plans to build the world's largest bio-diesel plant in Singapore to convert palm oil into fuel for cars, trucks and other vehicles.

The cost for Neste Oil will amount to 550 million euros ($A921.27 million) and create 100 jobs, the firm said on Friday.

Bio-diesel is a renewable fuel, derived from crops that can be repeatedly grown.

Singapore's proximity to palm-oil production sites in Malaysia and Indonesia was a factor for locating Neste's first overseas bio-diesel plant in the city-state, said executive vice-president Jarmo Honkamaa. Singapore also contains a major oil-refining hub.

Greenhouse-gas emissions from bio-diesel are 40 to 60 per cent less than from conventional diesel, Neste said.

When completed in 2010, the plant on a 19-hectare plot will be able to produce 800,000 tonnes of bio-diesel every year.

Most of the output will be shipped to Europe.

Norway's Renewable Energy Corp said last month that it plans to build a 6.3-billion-Singapore-dollar ($A5.23 billion) solar panel plant in Singapore, the world's largest.