Farms in Hawaii could become “zero waste” if a state-funded demonstration project proves viable.

The state’s Agribusiness Development Corp. is proposing to build a $1.5 million facility at the Shipman Business Park that would grow algae from leftover produce, in particular, papaya. The algae could then be used for animal feed or biofuel.

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Ken Nakamoto, project manager, said the Pacific Basin Agricultural Research Center has successfully grown algae from papaya in its lab, but the state wants to see if it could be done on a larger scale.

“What we’re trying to do at our facility is take it to the next step,” Nakamoto said.

“PBARC has shown it can be done in a test tube. We are trying to show we can do it on a commercial scale.”

Nakamoto, whose agency operates under the state Department of Agriculture, said the demonstration facility would be small and sit on a 1.5-acre lot next to the Pacific Biodiesel facility.

He said there would be four 2,000-gallon vat tanks to start out with.

According to a draft environmental assessment, the facility would cost about $1.5 million to build. Construction could be done by the end of next year, the document says.

Nakamoto said about 35 percent of the crops farms produce are unmarketable. The hope is that this process could give them a way to make some money off what otherwise be tossed, and also make livestock feed more affordable.

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Eventually, other crops could be used as well. He said they are starting with papaya because it is the most prevalent in Puna.

Email Tom Callis at tcallis@hawaiitribune-herald.com.