By Phil Mercer

BBC News, Sydney



People on the island of Bougainville in Papua New Guinea have found their own solution to high energy prices - the humble coconut.

They are developing mini-refineries that produce a coconut oil that can replace diesel.

From police officers to priests, the locals are powering up their vehicles and generators with coco-fuel.

Inquiries for the coconut power have come in from overseas, including Iran and Europe.

For years, the people of Bougainville have been dependent on expensive fuel imported onto the island.

Shortages have often caused many businesses in this part of Papua New Guinea to grind to a halt. High energy costs have not helped either.

Doesn't it sound good if you really run your car on something which falls off a tree and that's the good thing about it

Matthias Horn

Refinery operator

Matthias Horn, a German migrant and an engineer, operates one such refinery.

"They sometimes refer to me as the Mad German because how can you do that to your car... filling it with some coconut juice that you normally fry your fish in," he said.

"The coconut tree is a beautiful tree. Doesn't it sound good if you really run your car on something which falls off a tree and that's the good thing about it. You run your car and it smells nice and it's environmentally friendly and that's the main thing."

Mr Horn said his work had attracted interest from Iran.

Refineries like his also produce oils for cooking and cosmetics as well as soap.

Coconut power is not new in Bougainville.

The island endured years of civil unrest in which thousands of people were killed in a fight for independence in the 1990s. Dwindling supplies of diesel forced islanders to look for alternatives and the coconut was chosen.

In peacetime, new technology is propelling this sweet-smelling industry to greater heights.