Biofuel takes flight with Virgin Atlantic

Virgin Atlantic Airways flew a 747 from London to Amsterdam on Sunday powered in part by a biodiesel made from tropical oils.

The fuel used by the plane is a combination of regular kerosene-based jet fuel and a biodiesel from Imperium Renewables composed of babassu oil and coconut oil. Babassu comes from a tree in Brazil. In fact, 80 percent of the fuel consumed by the plane was kerosene-based. Only 20 percent of the fuel used on the flight came from plant oils. Still, it's a first, says Virgin.

The oils came from existing plantations, Imperium said. No modifications were required to the plane's engines.

Biodiesel is similar to regular diesel, but instead of being processed from fossil fuels it is made from plant oils. Biodiesel gets slightly lower mileage than regular diesel, but it spews far less polluting compounds into the air. It is also carbon neutral in that the carbon in the fuel comes from plants that are already on the surface of the Earth, which had sucked carbon dioxide from the atmosphere when they were growing. Fossil fuels are said to add carbon because they unlock molecules that have long been buried.

Although less polluting, biodiesel generally also costs more. In the U.S. the federal government offers subsidies ranging from 50 cents to $1 a gallon to biodiesel refiners. Carbon regulations, however, will likely make alternative fuels like biodiesel more economically attractive in the future.

Imperium has also cut deals with cruise ships to use biodiesel. Besides tree oils, Imperium is also experimenting with algae-based biodiesel with a company called Solazyme which could be cheaper. (Imperium last year opened up a 100 million gallon a year refinery. It also switched CEOs and delayed an IPO.)

Meanwhile, Richard Branson, he of the Virgin empire, has been investing in green start-ups.