"Flight Path to Sustainable Aviation", commissioned by companies including Air New Zealand, Boeing, Qantas and Virgin Australia, added that such a move could generate 12,000 jobs over the next 20 years.

Compiled by CSIRO, Australia's national science agency, the report estimated that using biofuels made from non-food crops would reduce Australia's reliance on aviation fuel imports by Aus$2 billion (US$2.1 billion) a year.

"This study highlights promising options for the aviation industry," said project leader Paul Graham, a CSIRO (Commonwealth Scientific and Industrial Research Organisation) economist.

"It also identifies the market, infrastructure and governance changes that will be required for success.

"Through the uptake of sustainable bio-derived jet fuel, together with next generation aircraft and engines, the industry can reduce both its emissions and its reliance on imported fossil fuel."

Some biofuels have been criticised for drawing on vital food crops, land and water resources, but the CSIRO scenario deals with non-food biomass sources such as forestry residues, municipal waste and algae.

Several airlines have tested biofuels, including Continental Airlines, Air New Zealand, and KLM.

The International Energy Agency estimates that biofuels will make up about 30 percent of global aviation fuel supplies by 2050.

Copyright AFP (Agence France-Presse), 2011