The first phase enables the growth of oil-producing micro-organisms while the consequent phases will concentrate on raw material pretreatment and oil recovery.

The pilot plant entails an investment of €8m is expected to be complete towards the end of 2012.

The technology being developed is expected to produce commercial volumes of microbial oil to be used as feedstock to produce renewable diesel.

Neste Oil’s vice president of research and development Petri Lehmus noted that the pilot was on-schedule with the technology performing as expected.

"The plant is already generating microbial oil containing biomass, which is a great achievement," said Lehmus.

"Our microbial oil pilot plant is the first of its kind in Europe, and Finnish research in the area is highly advanced worldwide."

The company has carried out extensive research in the field of microbial oil, with several patents currently pending.

Commercial production of renewable diesel using this technology is expected to begin by 2015 at the earliest. .