A Marshall Islands energy company says demand for coconut oil could boost the country's economy and increase employment in the outer islands.
The islands' major copra processing plant is in the process of refurbishment, which will make the production of coconut oil more efficient.
The Asian Development Bank is also finalising a loan to the Marshalls Energy Company, so it can convert an engine to use a coconut oil-diesel biofuel mix.
Steven Wakefield, the chief technical officer at Marshalls Energy, says there is also increasing demand for the oil internationally, which will be good for the economy.
"It's produced locally so it doesn't have to be imported and it's paid for locally so the revenues that are used to purchase the fuel and paying for people on the outer islands to produce it stay within the country. It would provide employment for a lot more people on the outer islands."
Steven Wakefield says around 3 to 4-thousand metric tonnes of coconut oil is currently produced every year.