Biodiesel producer Mission NewEnergy says it has raised another US$11 million ($13.9 million) in a placement, bringing its total raisings to US$26.82 million (33.94 million) in the past month.

The company said it had issued 75.86 million new shares following on from the placement of 24.13 million shares on April 28 to raise a total of US$14.5 million ($18.32 million).

It had also raised $US12.325 million ($A15.66 million) from the co-founder and managing director of KNM Group, Ir Lee Swee Eng.

Mission NewEnergy announced yesterday it had begun commissioning its second biodiesel plant, adjacent to its existing plant in Kuantan, Malaysia.

The plant will initially use palm oil as its feedstock, but the company is working on developing an inedible feedstock in India from a drought-resistant perennial plant called Jatropha Curcas, which grows in marginal, poor soils.

Mission NewEnergy said it hoped to eventually replace palm oil with Jatropha oil as the feedstock for its entire operations.

Green groups across the world have been critical of the biodiesel industry, accusing it of diverting food crops away from human consumption for use as a feedstock to produce their fuel.

Large swathes of rainforest are cleared in South East Asia each year to make way for palm oil plantation for the growing biodiesel industry.

Shares in Mission NewEnergy were down three cents, or 13.33 per cent, to 19.5 cents at 11.45am.

STUART McKINNON