His pledge at the Clinton Global Initiative in New York late last week follows an initial commitment of $400 million over three years for research and development into new cellulosic biofuels for road and aviation purposes.

Branson said the new $3 billion commitment would amount to all the profits from Virgin’s transportation units, including five airline and train companies.

“Sir Richard Branson and the Virgin Group believe that all businesses, especially those involved in transportation, energy and particularly fossil fuels … must be at the forefront of developing environmentally friendly business strategies with a focus on replacing traditional energy with energy coming from renewable sources,” the company said in a written commitment.

Although Branson’s commitment prioritised internal energy initiatives and significant funding to its new Virgin Fuels business, Theophanous wrote on behalf of the Bracks Government, asking the British billionaire to consider investing in Victoria’s wind, hydro, solar and biomass industries.

“Sir Richard is an astute investor with a generous environmental conscience,” Theophanous said.

“Unlike the Liberal and National parties he is keen to cut greenhouse gas emissions and values the role of renewable energy.”

Theophanous said Victoria was a credible place to do new business in Australia, as the federal renewable energy scheme has been fully subscribed for some time, and Victoria is the only state to have its own renewable energy target scheme in place.

“Victoria’s growing renewable energy industry is evidence that our state is the place to invest in renewable energy,” the minister said.

“Our growing population and economy will drive up demand for electricity and we obviously prefer sustainable energy supplies to match that growth.”

Theophanous was far from the only Australian commentator to make note of Branson’s commitment – Professor Ian Lowe, Emeritus Professor of Science at Griffith University and head of the Australian Conservation Foundation, was one of many scientists who commended Branson on taking leadership on climate issues beyond the scope of most politicians.

“The announcement by Richard Branson is yet another sign that business now recognises global climate change is a serious issue that requires a concerted response, showing the Australian Government’s studied inaction as being completely out of touch,” Lowe said.

“A real injection of funds into development of clean energy supply technology is welcome, but an equally high priority should be improving the efficiency of turning energy into the services we want. Finally, improved technology won’t solve the problem in the absence of political will to implement the changes needed.”

Virgin Fuels announced that the first spending from the $3 billion commitment would be its investment in Californian ethanol start-up Cilion.

Formed in June, Cilion intends to build and operate ethanol plants that will be “cheaper and greener” than traditional ethanol plants, requiring less fossil fuels to produce its biofuels.

Cilion plans to build seven plants by 2009 with a total capacity of 440 million gallons (1.6 billion litres) per year. The first three plants are expected to be built in California.

Virgin Fuels led the current investment round in Cilion, which has now raised more than $200 million in two financing rounds.

In Australia, the Virgin Group holds a 25% stake in Virgin Blue, launched in 2000. Transport giant Toll now holds the controlling stake in the Virgin-branded Australian carrier.