South Australian abattoir Dalriada Meat has won a $100,000 State Government grant to turn its residual waste and tallow into biodiesel.

Using its own process, Dalriada will produce biodiesel and other organic products, such as fertilisers, at its Keith integrated meat and rendering operation with extra raw material from abattoirs in Bordertown and Murray Bridge.

"The company plans to market its biodiesel domestically and possibly overseas, providing a major economic boost to Keith and the Limestone Coast region," says South Australian Minister for Regional Development, Karlene Maywald.

Dalriada chief executive Kevin Hoey says his company’s unique process makes biodiesel economically viable and sustainable.

"Biodiesel does not attract any Commonwealth rebates, so if it’s made from canola oil, for example, it can be uneconomic," Hoey claims.

"On the other hand, tallow is a cheap co-product of abattoir waste so value-adding is easy."

Hoey says Dalriada’s process had overcome the problem of tallow solidification at low temperatures.

"This opens up export markets in cold climate countries," Hoey claims.

Dalriada has also applied for a $1.5 million Federal grant from the Department of Transport and Regional Services to assist in funding the project.

"The $5.8 million biodiesel project is part of an overall $10 million expansion for the Dalriada site, requiring a substantial upgrade of the Keith electricity substation, at a cost of $200,000," Maywald says.

To offset this, the company will receive $100,000 grant through the government’s Regional Development Infrastructure Fund.

"The capital expansion includes an upgrade of the meat processing operation and will create 65 full-time positions over time. Power will also be provided to nearby enterprises and a planned housing estate," she says.