Moree Plains Shire Council is about to sign a memorandum of understanding (MOU) with Australian owned company Cubic QED, to manufacture biodiesel from

The MOU will allow the company to establish a commercialisation trial in the shire, with a view to building a biodiesel plant.

A total of 2.5 tonnes of algae biomass will produce 12,000 litres of biodiesel, with the dried by-product fed to livestock as a high nutrient supplement.

General manager David Aber says the council wants the biodiesel industry to flourish in the region.

"It's a company looking to establish a production process in Australia. They've had a number of research projects that have been going on in South Australia," he said.

"What they do is they don't consume the water, they actually treat the water as part of the process and it comes back in as clear water at the end of the process and yes by turning it into potable water we're turning [it] into genuine high security water for industrial use."