Reported earlier this morning by Reuters, Lufthansa has entered an arrangement with Australia’s Algae.Tec whereby Lufthansa will arrange for the financing to cover the construction costs of a dedicated BioFuel plant. Lufthansa itself will not be a stakeholder in the project. The plant will be located in a European country, close to industrial CO2 sources.

According to the press release from Algae.Tec, Lufthansa will commit to purchasing at least 50% of the output of the plant at an agreed up price with Algae.Tec.

No timeline for the project has been set, and final approval will still be required from Lufthansa’s Supervisory Board.

Lufthansa has been leading the way in determining the viability of alternative BioFuels for use in commercial airliners. It has successfully demonstrated the safety and savings that are achievable with BioFuel, so this step makes perfect sense in Lufthansa’s evolution towards the use of BioFuels on a regular basis throughout its fleet.

Earlier this year Lufthansa completed its BioFuel trials when a 747 flew from Frankfurt To Washington DC partially fueled with BioFuels. The trial had lasted 6 months and involved nearly 1200 flights within Germany using aircraft with a 50/50 blend of BioFuel and aviation fuel.