Jatropha tree "fruit" from which biodiesel can be made - it seems fuel really does grow on trees...

Valero Energy (US) has signed a five-year deal with Mission NewEnergy (Australia), worth USD 3.5 billion, under which Valero will buy biofuel from Mission. According to the deal, Valero has the option to purchase a 25% stake in Mission.

Beginning Q2 2010, Mission will be supplying Valero with up to 200,000 tons of biodiesel per year. This amount can be doubled, and extended in term by an additional five years.

Mission will supply biodiesel made from palm oil, but the company plans to eventually move over to biodiesel derived from Jatropha plant feedstock. Jatropha is an inedible perennial oil seed plant, growing on marginal soil, without the need to displace any agricultural land, which makes it a non-competitive crop with the food industry.

[source: Financial Times]