TOPPENISH -- The parent company of the AB Foods-Washington Beef processing plant in Toppenish has won $2 million in grants and loans to create a biofuels company that will transform waste into diesel.

AB Bioenergy will use the money to build a biofuels facility later this year in a yet-to-be determined Central Washington location. After it ramps up in the spring of 2011, the plant is expected to create 16 new jobs.

AB Foods-Washington Beef is owned by AgriBeef Co. of Boise, Idaho.

Company spokesman Rick Stott said AB Bioenergy will convert tallow — which is solid, rendered  beef fat — and waste grease to biodiesel using feedstock from the Toppenish plant and by securing agreements with local livestock processors throughout Washington and Idaho.

“We are proud to foster economic development in a rural community in Eastern Washington while reducing our reliance on foreign fuels and reducing greenhouse gas emissions,” Stott said in a news release.

Gov. Chris Gregoire’s office announced similar grants to 13 projects around the state, including a bio-diesel refinery in Richland and a manure digester for three dairies in King County.

State Agriculture Director Dan Newhouse said farmers and food processors are finding success in renewable energy projects.

“In supporting these projects, we’re deepening the connection between urban energy consumers and the rural economy and boosting awareness of the many positive roles agriculture plays in our state,” Newhouse said.

The money comes from $200 million in federal Recovery Act funds administered by the state Department of Commerce.

• Leah Beth Ward can be reached at 577-7626 or lward@yakimaherald.com.