The race to develop sustainable biofuel for use in aircraft stepped up a gear yesterday as engineering conglomerate Honeywell announced it has joined forces with Airbus, JetBlue Airways and International Aero Engines to undertake research into second-generation biofuels for use in commercial aircraft.

The company said the project would focus on developing and testing so called "second-generation" biofuels made from crops such as algae that can be produced without competing with food or water resources.

The new research group will find itself in direct competition with a project led by Virgin Atlantic, Boeing and GE Aviation, which is similarly investigating the viability of algae-based biofuels.

Earlier this year, the company undertook the first biofuel-powered test flight of a commercial airliner from London to Amsterdam using a blend of 80 per cent normal jet fuel and 20 per cent biofuel made from coconut oil and babassu oil in one of its four main fuel tanks.

The flight attracted criticism from environmentalists who labelled it a " publicity stunt" and warned that using biofuels to power aircraft would increase demand for agricultural land, leading to deforestation and water shortages.

However, Virgin Atlantic boss Richard Branson dismissed the criticism, claiming the flight proved that biofuel was technically feasible and insisting that the group was now focused on developing algae-based biofuels that could be produced in an environmentally sustainable manner.

Honeywell has also already made progress in the field of green aviation fuels through its UOP refining technology, which has developed systems to converting natural oils and greases into military jet fuel as part of a project with the US Defense Advanced Research Projects Agency. The company said the fuel provided a drop-in replacement for traditional kerosene-based jet fuels and could be used for commercial as well as military aircraft.