Seaweed harvesting and processing could be worth millions of dollars a year to South Australia if research shows the commercial production can be viable.
The production of red seaweed for use in livestock fodder, fertiliser, cosmetics, pharmaceuticals and human consumption could inject $140 million a year within three years with processing able to add a further $250 million to the state's economy.
On top of the injection of funds it is estimated the industry could support 1200 jobs.
According to PIRSA, using red seaweed in the diet of cattle has been found to reduce a cow's methane emission significantly.
Acting Minister for Primary Industries Dan van Holst Pellekaan said seaweed production could become a great option for stock feed, especially in times of drought.
"Investing in research to determine the viability of this project will mean South Australia is well positioned to become a centre of excellence for seaweed production in Australia if the benefits of adding seaweed to livestock fodder can be realised," Mr van Holst Pellekaan said.
"If there are opportunities to cost-effectively reduce ruminant methane production by converting it into energy to drive enhanced animal productivity, this represents a win-win."
As the first commercial operator in seaweed production in the state, CH4 is working with SARDI to develop trials.