Initially, the 78 buses will operate on B5 blended fuel, which is 95% diesel and 5% biofuel. This blend ratio is then expected to ramp up to B10 or B20 within six months.

Western Australian-based Gull Petroleum will supply the B5 blended fuel through Swan Transit depots at Kalamunda and Canning Vale.

Carpenter made the announcement yesterday at the celebration of the 500th Transperth bus built by manufacturing company Volgren, at their facility in Malaga.

"The aim of the trial is to examine any mechanical risks, bus reliability and the cost implications of using bio-fuel," he said.

He added that the trial would add to Transperth's solid 'green' credentials.

"Over the next 12 months, another 65 new compressed natural gas (CNG) buses from the Volgren factory will be added to the Transperth bus fleet at a cost of $31.2million," he said.

"This trial will see Transperth's current fleet comprise 20 per cent CNG, 73 per cent diesel, and seven per cent bio-diesel.

"Combining the CNG and bio-diesel initiatives insures that WA is seen as a leader in the field of transport energy diversity and self-sufficiency."

The trial is being undertaken through Transperth with the help of bus contractor Swan Transit.