The US Air Force Research Laboratory's Defense Production Act (DPA) Title III Programme Office will focus on producing biofuels for use by the US Department of Defense (DoD).
The plans to home-grow biofuels follow President Barack Obama's call to address the production of biofuels in an effort to mitigate the vulnerabilities faced when fuel price increases.
The use of biofuels expands military energy sources and improves reliability while decreasing dependence on foreign fuel source.
DPA Title III Programme Office programme manager James Neely said: “When there is any disruption to the supply of petroleum-based fuels, the financial impact on DOD budgets is tremendous.
"A $1 change in the price of a barrel can result in billions of dollars in expense.”
A team led by Neely will work with several companies to develop feedstock, acquire equipment and help firms develop a business strategy for the production and distribution of biofuels.
The biofuels produced will be used by the DoD and the industry.
An idle refinery was recently modified to facilitate the production of large-scale batches of biofuel for military and industry use, as part of the bio-synthetic paraffinic kerosene (BSPK) project.
The biofuel will be produced using a hydro-processed esters and fatty acids (HEFA) process, which blends non-edible natural oils and agricultural waste with hydrogen and a catalyst.
The resulting fuel can be blended with petroleum jet fuel in a 50-50 proportion, integrating into existing engine systems, including aircraft, without modification.
The Air Force will use biofuels in almost all of their equipment and weapons systems.