Grain waste produced by a Scotland whiskey distillery will be converted into energy under a $9.7 million project announced by beverage maker Diageo.

The world's biggest malt whiskey distiller, which manufactures such brands as Johnnie Walker, Crown Royal, J&B and Windsor, said last week it will build a new bio-energy plant at its Glenlossie distillery complex in Speyside, Scotland.

It's the latest of several renewable energy investments made by Diageo in recent years, including a $105 million bio-energy plant at a distillery in Fife and another at its plant in Roseisle.

Brian Higgs, the company's malt distilling director, said the plant will use 30,000 tons per year of the byproducts, or draff, remaining from the manufacture of around 3.2 million gallons of Scotch whiskey production.

"With Roseisle distillery we showed what can be achieved in using the natural by-products of our industry to produce green energy," he said.

"Diageo is committed to reducing its reliance on fossil fuels and to reducing our overall impact on the environment. The plan for Glenlossie is another significant step in our journey towards that sustainable future for Scotch whiskey production."

Under the plans, stream produced by burning draff will be used for onsite operations at the distilleries as well as at a nearby dark grains plant, which makes animal feed.

The Scottish government is encouraging non-utility businesses to institute small-scale bio-energy converters, saying their construction and operation will add jobs in a tough economy and help meet CO2 emission reduction targets.

Others among Scotland's 100-distillery whiskey industry are also making green energy moves.

The Combination of Rothes Distillers announced in May it was partnering with British biomass developer Helius Energy to build a biofuel-powered heat and power plant in Speyside -- the first to provide electricity for public use, The Guardian reported.

The distiller said it will burn draff along with woodchips to produce enough electricity to supply 9,000 homes.

Environmentalists have also praised the Rothes waste-to-energy project -- but with a qualification. Sam Gardner, climate policy officer for WWF Scotland, said his group wants the wood burned to be burned with the draff to be from local sources.

"It is using waste products from our whiskey industry which is eminently sensible thing to do, and is producing heat both for whiskey production and for the local community," Gardner said. "We would want to see assurances, however, that the biomass was sustainably sourced."

That's something the whiskey makers can't guarantee, Frank Burns, general manager of Rothes Distillers, said in a statement.

"Some of it will be local and some of it will be shipped in. It is down to the supplier. They may source it locally," he said.

A big part of the equation is the distillers' effort to meet their CO2 emissions reduction targets. Diageo said its new bio-energy plant at Glenlossie will remove about 6,000 tons of emissions, the equivalent of taking around 1,600 family cars off the road.

Niall Stuart, chief executive of Scottish Renewables, the country's green energy trade group, said the country's "world famous whiskey industry is now increasingly looking to renewable fuel sources to power its operations with Diageo very much leading the way."

"Renewable heat and small-scale renewables have the potential to help all sorts of businesses generate new revenue or reduce costs while cutting carbon emissions," he added.

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