The feasibility study is something long-sought by the Meander Valley Council, who want a source of renewable energy for the precinct, which they are seeking to continue to grow as a centre for agriculture, manufacturing, transport and logistics.

The bioenergy plant is estimated to cost $60 million, and would divert waste from landfill, create 112 jobs and contribute $54 million of economic output to the region over 10 years, Lyons MHR Brian Mitchell said.

"Bioenergy technology is well established in Australia - if this plant gets up, it will have significant benefits for Tasmania; it will create new jobs, boost our state's renewable energy generation capabilities and will benefit our agricultural and forestry industries," he said.

Liberal senator Richard Colbeck said the Coalition had announced $85 million in other grants for regional Tasmania.