BIOFUEL producer D1 Oils has been launched on the stock exchange in a move which will create £13m of funding for the Teesside-based company.

D1 announced yesterday it was placing more than eight million new shares on the Alternative Investment Market (AIM).

The firm, which produces environmentally-friendly biodiesel, said the capital would go towards funding a research and development site on Teesside as well as towards developing its overseas operations.

Trading on AIM in the new shares is to begin in a week's time.

D1 chairman Karl Watkins said the flotation would help create about 100 jobs in the region and another 25 roles in the company worldwide.

The North-East entrepreneur said: "The market for biofuels is very buoyant and demand far outstrips supply. For every litre produced at the moment, there is demand for 900 litres.

"We are one of only a handful of companies in our field in the UK so we're in a very strong position."

D1 specialises in growing crops that can be used to produce energy, including the harvesting, extracting and processing of crude vegetable oil for refining into biodiesel.

Governments around the world are encouraging biodiesel's introduction into their transport fuel mix to reduce harmful emissions and lessen dependence on imported fuels.

D1 has identified jatropha, a non-edible tree that can produce oil-bearing seeds over a 20-year life span, as its preferred crop.

The company has plantation rights for 37,000 hectares of land in Africa and Asia to cultivate the jatropha oil and has an option on a further six million hectares.