The £10 million plant will be able to produce 100,000 tonnes of biodiesel per year, making it one of the largest in Europe. Final project approval depends on regulatory consents and institutional funding.
Greenergy already has contracts for UK-grown rapeseed and says that this source "has the potential" to supply at least 60% of the plant's future needs.
Catering company Compass Group will also supply 2,500 tonnes of used cooking oil over the next three years, and Greenergy is in discussions with other suppliers.
Greenergy already sells biodiesel from the forecourts of Sainsbury's and Tesco and has signed a memorandum of understanding with oil company ConocoPhilips.
Last year, rival developer Cargill which told a Parliamentary inquiry that biodiesel requires a further 8p/l duty differential for large-scale manufacture to be viable (ENDS Report 342, pp 38-39 ). At present, duty is 20p/l less than for standard diesel.