An additional 150 people are expected to be employed during the construction of the plant, owned by UK-based smokeless solid fuel manufacturer CPL Industries.

It also has the potential to be very good news for farmers in Munster with the company planning to replace  olive stones from Mediterranean countries with local produced biomass as the main source of its raw material.

CPL is already in discussions with growers and merchants about developing long–term supply contracts with farmers.

The plant will initially have a capacity of about 200,000 tonnes of briquette production but will be designed with the potential to expand to over 300,000 tonnes should this be supported by market development.

CPL Industries, which currently runs an operations facility in Foynes Port, agreed to proceed with a proposal to invest some €20 million in the creation of a new bio-fuel plant due to the incoming ban on the sale of smoky coal.

The plant will employ approximately 100 people when fully operational, with 42 additional people in sales, distribution and plant maintenance. The company hopes to have the plant operational by 2015.

The plant will also have a need for approximately 80,000 tonnes of biomass when in full production and initial discussions have commenced with growers about how this need can be met by developing biomass production over the next few years in Ireland.

CPL CEO Tim Minett said: “Our investment in Foynes is really a first phase for us in Ireland to serve the domestic market.  We envisage that in the medium term we may further expand production to serve the wider European market from Foynes.”

Mr Minett continued: “Ireland is the first country in Europe to move towards a ban on the sale of smoky coal. Not only has it been widely welcomed by healthcare and environmental groups but it has also given us the impetus to take this decision.

“We trust that the government will work to encourage customers to switch to these new fuels in the three-year switchover period as they have done with other green initiatives.”

He added that the new fuel policy could contribute to greater fuel security in Ireland as it currently imports some 300,000 tonnes of smoky coal from Poland and Colombia.

Finance Minister Michael Noonan commented: “The port of Shannon Foynes is a strategic asset for the county and the region. It enjoys a well-deserved reputation as being the premier deep water port in Ireland. I understand that the team at CPL examined a number of options but chose Foynes for their investment.”