A Tredegar factory could convert waste chip shop oil into fuel for use in diesel vehicles.

Plans are being considered by Blaenau Gwent council for the conversion of a disused paint factory into Wales' first commercial bio diesel plant on Tafarnaubach Industrial Estate.

A decision is expected on Thursday and if successful the factory could be open within months, as preliminary work on the site has started.

One objection has been lodged, from a neighbouring unit, but officers are recommending that the council approves the application.

The plant, which will be the first commercial plant producing bio-diesel in Wales, is being set up by an environmental fuels specialist and an entrepreneur who met at the University of Wales, Newport.

Dr Andrew Price, 30, and Steve Berrow, 48, are funding the factory themselves with the help of a small grant from the WDA.

At first they will run the factory themselves but they hope to employ eventually up to 30 staff.

The plant will initially produce 15,000 litres of fuel grade bio-diesel a month, which will eventually increase to 200,000 a week. It will mainly be sold to haulage companies.

Vehicles could use this without any alterations, they say.

Including VAT the bio diesel will sell for between 86p and 88p a litre, a saving of up to 10p.

It will be environmentally friendly and only use waste oil from chip and kebab shops. At present waste vegetable oil is collected from fast food shops and sent to Europe for its bio-diesel plants,

The oil is converted to diesel using a chemical process and then purified.

Another 5,000 litres is also going to be sold on a trial basis at a filling station on the A465 near Gilwern.

Dr Price, from Brecon, said haulage companies hoping to save money have shown a lot of interest.

"A small company with 20 lorries is spending more than £1m a year on fuel so this will be of great benefit to Gwent industry," he said.

Mr Berrow, from Crickhowell, added: "Eventually we could see all cars being run on this fuel."

After receiving planning permission the company will also need an Environment Agency licence, under pollution regulations, to produce fuel.