05/07/2006 (Australian Broadcasting Corporation)  -  Work on the nation's biggest renewable fuel plant in Darwin is almost complete.

Natural Fuels Australia will import Malaysian palm oil to produce biodiesel later this year.

Charles Darwin University was commissioned to compare traditional diesel with a 20 per cent biodiesel blend.

Researcher Mark Thiele says emissions were reduced.

"Carbon dioxide emissions went up slightly but primarily because of the reduction in hydro carbon and carbon monoxide," he said.

"We also didn't actually notice very much difference in power or torque.

"Particularly at the 20 per cent blend, which is what we were testing, was only about 1 per cent."

But Mr Thiele says it is not clear how sustainable it will be to import palm oil.

"From a sustainability perspective it's probably a little bit more complicated," he said.

"We have to look at the whole cycle of biodiesel production and the feed stock.

"It was really outside the scope of the research work that we did."