Some 142 jobs are to be created at a new fuel plant.
CPL Fuels is to set up a new 22 million euro facility at Foynes, Co Limerick, to produce smokeless, low-carbon solid fuels to supply the Irish domestic heating market.
Environment Minister Phil Hogan is seeking a nationwide ban on smoky coal by 2016.
"This jobs announcement today is proof that if you provide the right circumstances and certainty in relation to policy matters, then industry will rise to the challenge and provide the cleaner alternatives," he said.
"We must continue on this road of sustainability and provide jobs that are badly needed."
One hundred people will be employed at the CPL Foynes plant, with another 42 people working in sales, distribution and plant maintenance.
Last month a north-south study was launched to analyse emissions from residential heating and, in particular, air pollution from smoky coal in the Republic and Northern Ireland.
Mr Hogan added: "Ireland has the highest rate of respiratory disease in Europe and it was with that in mind that we are looking at our policy options to tackle air quality on the island of Ireland."