A PRODUCER of environmentally-friendly fuel has signed a deal with an Indian plantation for the supply of feedstock for its biodiesel refineries.

Teesside-based D1 Oils plc will take up to 100,000 tonnes of oil from jatropha trees harvested from 40,000 acres owned by PManek Biofarms.

PManek will begin planting in India next year, after the monsoon season, and D1 will provide it with jatropha seed and technical support to grow the plant.

D1 is signing deals with governments and firms around the world to grow the jatropha plant. Its seeds are crushed to produce oil, which can then be mixed with diesel to create biofuels.

Because the jatropha plant is easy to grow, it is cheaper than rapeseed oil, which is traditionally used in biofuels.

D1 has two main strands to its business - the jatropha plantations and biodiesel refineries.

It is using expertise at its headquarters in Teesside to develop the refinery business and one day hopes to have refineries around the world on its jatropha plantations - cutting down on the miles needed to transport the fuel.

D1 hopes to start making profits once its jatropha fields start to be harvested in 2007 to 2008.