The first commercial aircraft to be powered by biofuel will fly next year in what could be a significant step towards airlines reducing their oil consumption and carbon dioxide emissions.

Virgin Atlantic is to announce today that one of its 747 jumbo jets will be used to demonstrate that biofuels can power an aircraft. The project, which includes Boeing and General Electric, the engine-maker, hopes to have the “green” jumbo airborne in 2008.

The airline and its partners are testing up to eight biofuels to determine which is most effective at altitude. Ethanol, which is becoming an increasingly popular alternative to petrol in cars, has been rejected because it does not burn well in thin-oxygen environments.

The idea of replacing petrol with biofuel in cars is a significant trend in the car industry. Last year Ford announced a £1 billion research project to convert more of its vehicles to these new fuel sources.

However, converting an aircraft to run on biofuel was thought to be a much longer-term project and the announcement from Virgin today will surprise those in the industry who have scorned the idea.

Virgin hopes that biofuel-powered aircraft could be operating commercially within five years, which could help to cut significantly the airline industry’s carbon dioxide emissions. At present air travel contributes 2 per cent to 3 per cent of climate-change gases, but that level is increasing as the activity expands. The industry is investing in lighter aircraft and new engines to improve fuel efficiency, but biofuels could eliminate oil dependence entirely.

Sir Richard Branson, the chairman of Virgin Atlantic, launched an alternative fuels division last year, pledging the profits from his airline and trains for the next ten years.

A source close to the biofuel project said: “Everyone was saying that flying a plane with alternative energy sources was a decade away, but it is going much faster than that. The demonstration by a 747 next year will be a milestone in the airline industry’s attempts to reduce its CO2 emissions and cut its fuel bills.”

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive