Kona-based Cellana LLC has received a $5.5 million federal grant to develop animal feed from algae grown at its facility at Keahole Point.

The grant from the U.S. Department of Agriculture will be combined with $1.6 million raised by Cellana for the project titled “Developing a new Generation of Animal Feed Supplements,” according to a news release from the office of U.S. Sen Daniel Inouye. The project began May 1 and runs through April 30, 2014.

In addition to animal feed, algae can also be used to produce oil that can be refined into a variety of fuel products, including biodiesel that can be burned in automobiles and power plants.

“By developing a cheaper form of animal feed from marine algae we allow our livestock and dairy industry to remain competitive by reducing the amount of revenue they direct to feeding their animals,” Inouye said in the release.

“I would like to laud Cellana’s efforts to move Hawaii away from the use od imported fossil fuels while developing innovative new products form one of our most readily available resources,” he said.