New Zealand could be making its own biofuel within the next five years.

Scion, a Rotorua-based research institute, hopes to end the country's reliance on imported fossil fuels by establishing a bio-energy industry here.

Integrated bio-energy portfolio leader Paul Bennett says his team had already made significant progress.

"We're looking at ways of converting [organic materials] into useful energy products, whether they're solids, liquids, or gaseous.

"We are able to produce liquids from wood, and those liquids are getting closer and closer to the sort of fuels that are used in the market at the moment."

Scion's wood-based aviation fuel was its most promising product, and would likely be the first to reach the market, Bennett says.

"Liquid biofuel from wood, for instance, can deliver an 85 percent reduction in C02 emissions," he says, and it could have sweeping economic benefits too.

"There's an energy security issue around the world at the moment, and New Zealand becoming more independent in terms of its energy production would be very, very beneficial.

"With no oil refinery, we're buying all our products [from overseas]," he says.

"If we can create our products here in New Zealand, it has a knock-on benefit in terms of national and regional GDP, and jobs."

Sustainability did not come cheap, but Bennett believed that would change.

"It's currently more expensive than fossil fuels, but we know from experience that with new technologies you see significant cost reductions with time.

"Also, carbon prices are heading upwards and that is going to help in terms of the cost-comparison with fossil fuels."

Other nations were already investing in biofuel.

"There are some parts of the world now that are building plants to produce aviation fuels from woody biomass, and New Zealand is looking at maybe importing that technology," Bennett says.

In fact, some New Zealanders have already made use of the innovative new fuel, and might not even know.

"Air New Zealand have imported biofuels this year," Bennett says.

"They've been blending those biofuels into the regular jet fuel that they use, so on certain routes if you jump on an Air New Zealand plane you'll be flying on biofuels."

Bennett expected Scion's aviation fuels would be market-ready within the next five years.

But boats were a tougher nut to crack.

"With marine fuels, they're slightly further behind," Bennett says.

"We think it's probably six to seven years before the work we're doing could, if everything goes right, lead to commercial activity."

Cruises, ferries, and cargo ships made boat fuel just as environmentally dangerous as its airborne counterpart.

"There's an equivalent amount of C02 emitted from the marine sector as there is from the aviation sector," Bennett says.

-RNZ.