Virgin Atlantic aims to support demonstration flights within 18 months using synthetic fuel derived from a process involving the capture of vented gases from heavy industrial plants.
The UK carrier will partner Chicago-based energy company LanzaTech, which generates fuel-grade ethanol through a gas-to-liquid process, compressing vented by-product gases from steel, cement and chemical factories and fermenting it.
"We take the waste gas normally flared as carbon dioxide and put it on the wing of an aircraft," said LanzaTech chief executive Jennifer Holmgren. "It sounds like science-fiction. I assure you, it's not."
In turn, LanzaTech acts as a supplier to Stockholm's Swedish Biofuels, which converts ethanol to synthetic jet fuel. Initially the programme aims to certify the fuel for a 50:50 blend, although Holmgren said it would aim for 100% "in the longer term".
Test flights are the "next stage", said Virgin chief executive Steve Ridgway, possibly out of Shanghai where a demonstration plant is located.
This plant will create 100,000gal (379,000 litres) of ethanol a year under a programme due to run from the fourth quarter of 2011, while a commercial operation will be commissioned in the first quarter of 2013 which will produce up to 50 million gal a year.
Ridgway is optimistic that certification of the jet fuel, a process which Boeing is assisting, could be accomplished in 18 to 24 months, clearing the way for initial services from Shanghai and Delhi to London within three years.
Initial certification efforts will concentrate on a 50:50 blend
"Five years ago this was a big challenge," he said. "Now it's more of a well-trodden path."
LanzaTech said the gas-capture process could be applied to two-thirds of the world's steel mills and could extend to other heavy plants, even potentially to coal-fired power stations.
New Zealand already hosts a pilot scheme which produces 15,000gal of ethanol a year from the BlueScope Steel plant at Glenbrook.
"In a nutshell, what we're going into is the recycling business," said Virgin Atlantic president Richard Branson.
"With the steel industry alone able to deliver over 15 billion gallons of jet fuel annually, the potential is very exciting."
Swedish Biofuels has been carrying out a four-year project with the US Defense Advanced Research Projects Agency, during which it demonstrated the capability of its technology to produce 100% biological aviation fuel - known as SB-JP-8 - from biomass, at pilot plant scale.
The company said the fuel shows "great promise" for being certified and potentially becoming a "complete replacement" for JP-8, Jet A-1 and other fuels.
"It's the first time jet fuel has had a competitor," said Branson, adding that Virgin Atlantic wanted "as many of its aircraft using this fuel as possible".
How to make the unwanted wanted
Swedish Biofuels has been generating synthetic aviation fuel based on lignocellulosic biomass, using non-food feedstock such as wood, agricultural and forestry waste.
The process is essentially two-stage. Initially, the feedstock is fermented and alcohol recovered, then a chemical synthesis and rectification transforms the alcohol to jet fuel.
Under the Virgin Atlantic partnership, the ethanol will instead be provided by LanzaTech, which will use carbon-capture of waste gas from industrial steelmaking, diverting about a third of the carbon that would otherwise be emitted - reducing the carbon footprint of the plant.
Virgin Atlantic believes the technology is scalable and sustainable, given that it makes use of an existing by-product, and that the cost of commercial production will be comparable with that of conventional jet fuel.