Ministers have announced a £22m fund to help deliver up to five new fuel-from-waste plants by 2021, producing fuel to power lorries and planes.
The cash would be match funded by industry to help deliver waste-based fuels for planes and lorries 'where it is not viable today to switch to electric power, because of the large weight of the vehicles', the Department for Transport (DfT) said.
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A biofuel plant
The biofuel uses 90% less carbon than traditional fossil fuels. Trials of the jet fuel have taken place in Europe and North America. As it is chemically very similar to conventional fuels they can be used in existing aircraft without any engine modifications.
The DfT said more than 70 groups have shown interest in bidding for the funding.
Transport minister Jesse Norman said: 'We are making funding available to innovative businesses which will lead the way in developing alternative fuels that are efficient, sustainable and clean.
'We want every new car and van in the UK to be zero emission by 2040, but we know lorries and aeroplanes will rely on more traditional fuels for years to come so we must promote environmentally friendly alternatives.'
Fuel from waste materials could be worth £600m a year to the British economy by 2030 the DfT said.
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