According to just-auto.com, the UK Carbon Trust set up a consortium led by Axion Energy with the goal of finding a commercially viable solution to turn municipal and wood waste into biofuel.
The technique, called pyrolysis, may end up supplying more than half of the EU 2020 requirements. The process does not involve burning, but microwave combustion by heating, which will help avoid the generation of methane gas.
"Many biofuels such as those from waste, have the potential to provide significant carbon reductions," UK transport minister Sadiq Khan was quoted as saying by the source.
"The challenge is identifying and developing those biofuels which deliver the most environmental benefits."
The project is backed by the UK Department of Transport and the Department of Energy and Climate Change with 7 million pounds, while the Carbon Trust will give a 500,000 research grant to the University of York for initial microwave combustion R&D.
"Genuinely sustainable biofuels will be critical to help reduce the UK's transport emissions," Carbon Trust chief executive Tom Delay added.
"By developing a method which overcomes the issues associated with some existing biofuels, the UK has a vital role to play. In just a few years pyrolysis could change the way in which we produce biofuels and by 2020 be a commercially viable option."