Scottish bakery supplier Macphie has unveiled plans for an ambitious renewable energy plan that will involve cutting its carbon emissions by 2,000 tonnes a year.

A new Macphie biomass plant - a massive 1.75 MW boiler fuelled by wood chips - will be the first large industrial biomass process steam plant in Scotland.

The firm has made a £1.5m investment in the plant which will supply the heating at its Glenbervie site in the north of Scotland from March next year. It also received a grant from the Scottish Executive’s Scottish Biomass Support Scheme.

Chief executive Alastair Macphie said the biomass plant was the first phase of a renewable energy plan that will involve cutting carbon emissions by 2,000 tonnes a year.

"We calculated the feasibility of this plant when the oil price was at $65 a barrel, and expected a financial payback within five to six years. Now that oil prices are even higher it’s going to be an even better payback."

The company will turn to green energy sources to meet its fuel needs as it gears up to double the size of its business.

Electrical usage has already been reduced by 20% over the last three years. The 600-800kVA of electricity it uses has been predicted to more than double to 1,500-2,000kVA by 2011. "We’ve looked for more sustainable ways of doing what we do because of our rural setting, and they are always the more cost-effective routes," said Macphie.

The new boiler will use 5,000 tonnes of locally sourced wood fuel per year to produce the steam demand for its factory on the 2,000-acre family-owned estate.