The investment aims at underscoring the significant private sector investment in demonstration-scale advanced biofuel plants, thereby advancing the growth of the UK’s biofuel industry.
The Department for Transport will conduct a competitive process to award the funds over three years starting 2015.
Transport Minister Norman Baker said that the funds are provided to support innovative technologies that are expected to bring significant benefits to the UK.
"There are real opportunities for the UK to take a technological lead, driving growth, creating highly skilled jobs and seeing energy, security and environmental benefits," added Baker.
"It is clear that in the long term advanced biofuels will be important in areas that we cannot otherwise decarbonise, such as aviation. This announcement will help put the UK in a good position to meet this demand."
The government will commission a feasibility study to report on the detailed design of the proposed competition including eligibility criteria and funding scheme options, as well as ensuring the project complies with EU State aid rules.
Energy and Climate Change Secretary Edward Davey noted: "Advanced biofuels have the potential to make a sustainable contribution to our 2020 renewable energy targets, as well as to our longer term decarbonisation targets."
Welcoming government’s competitive process to allot funds for the growth of biofuel industry, Renewable Energy Association (REA) stated that the investors need framework for current generation biofuels to invest in the fuels of the future.
REA Renewable Transport head Clare Wenner remarked: "We urge Government to give investors a signal that the regulatory framework for renewable transport fuels will be extended beyond 2020 to at least 2030, to give entrants to the competition assurance that their investments will be underpinned by legislation."
