New Zealand's LanzaTech has struck a deal with Virgin Atlantic to provide the world's first low carbon jet fuel.
The Auckland-based firm said it has created a breakthrough in aviation fuel technology that would see waste gases from industrial steel production being captured, fermented and chemically concerted into jet fuel.
"The revolutionary fuel production process recycles waste gases that would otherwise be burnt into the atmosphere as carbon dioxide," Virgin Atlantic said.
The Sir Richard Branson controlled airline said it would use the new fuel on its routes from Shanghai and Delhi to London, as LanzaTech developed facilities in China and India.
"The technology is currently being piloted in New Zealand, a larger demonstration facility will be commissioned in Shanghai this year, and the first commercial operation will be in place in China by 2014.
"Following successful implementation, a wider roll-out could include operations in the UK and the rest of the world."
LanzaTech believed the process could be used in 65% of the world's steel mills.
"We were the first commercial airline to test a biofuel flight and we continue to lead the airline industry as the pioneer of sustainable aviation," Branson said.
"This partnership to produce a next generation, low-carbon aviation fuel is a major step towards radically reducing our carbon footprint, and we are excited about the savings that this technology could help us achieve."
LanzaTech is 51% owned by Khosla Ventures of Silicon Valley in California. A venture capital firm, it was founded by Vinod Khosla, the India born co-founder of Sun Microsystems.
K One W One, an entity controlled by Warehouse founder Sir Stephen Tindall owns 8.2% of the shares.
Neither Virgin Atlantic nor LanzaTech have said how much the deal is worth.