A timber processing company in Co Fermanagh is abandoning fossil fuels in favour of a source of renewable energy that will use scrap materials from the factory floor to generate all its electricity requirements on site

Balcas is building a combined heat and power plant on its site near Enniskillen that will produce bio-fuel pellets from sawdust and wood chips.

The pellets are burnt in industrial and domestic heat boilers without creating carbon dioxide (CO2).

Emissions from CO2 are thought to be a main cause of global warming.

The process will make Balcas entirely self-sufficient in terms of its energy needs. The surplus is to be supplied to the UK National Grid, providing enough clean fuel to power up to 10,000 homes in Northern Ireland.

The scheme was part-funded by a €1.5 million interest-free loan from Northern Ireland Electricity (NIE).

Speaking at yesterday's official launch of the plant, Balcas managing director Mr Ernest Kidney predicted that over the coming decade, bio-fuel pellets will become one of Europe's main environmentally friendly energy sources.

"Throughout Europe, timber based bio-fuel pellets already provide heat, power and price stability. Timber is a cheap and renewable resource and the bio-fuel pellets industry provides a bonus of well-paid rural jobs in harvesting, production and distribution," he said.

There are no plans to introduce similar facilities at Balcas's plants in Co Cork, Co Leitrim and Co Kildare.