Plans for a new biofuel made from waste gas belching out of industrial chimneys have received a $12 million boost from the Government.
Its developers hope the new fuel will slash the country's petrol consumption by 90 per cent.
The project is one of 96 to get a share of $785 million over five years from the funding agency Foundation for Research, Science and Technology.
LanzaTech, the Auckland company developing the biofuel, has already attracted heavyweight backing from Sun Microsystems co-founder Vinod Khosla.
It is testing a way of capturing industrial emissions and turning them into a high-energy alternative fuel through a fermentation process.
"It would look like a brewery next to a steel factory," said LanzaTech founder Sean Simpson.
Any industry producing carbon monoxide and hydrogen emissions would be suitable for the process.
The fuel could be mixed with petrol in a 90 per cent biofuel blend, cutting reliance on traditional fuels.
Foundation chief executive Murray Bain said the biofuel would not require changes to infrastructure.
"This is one of the most exciting projects of its kind we have invested in."
Dr Simpson said there was huge global potential in making fuel from waste gases, which were already being produced in big volumes and going to waste.
"We're not taking food resources. I know that's something people are very concerned about."
Wellington researchers were also granted a total of $6.7 million to do research into nanotechnology – the study of tiny devices or materials at the atomic level. Victoria University will examine magnetic nanoparticles, and GNS Science will investigate miniature motors and data-storage devices.
Nelson's Cawthron Institute got $14.8 million for a selective-breeding project aimed at developing a new species of greenshell mussel.
Research, Science and Technology Minister Pete Hodgson said the $785 million of funding would help boost the economy.
