Shell said the initiative could bring about the availability of new biofuels that can be used at high blend rates in standard gasoline engines. This could potentially eliminate the need for specialised infrastructure, new engine designs and blending equipment.

"Virent's BioForming technology uses catalysts to convert plant sugars into hydrocarbon molecules like those produced at a petroleum refinery. Traditionally, sugars have been fermented into ethanol and distilled. These new ‘biogasoline' molecules have higher energy content than ethanol (or butanol) and deliver better fuel efficiency. They can be blended seamlessly to make conventional gasoline or combined with gasoline containing ethanol," Shell said in a statement.

Virent vice president Dr Randy Cortright said his company had proved that sugars can be converted into the same hydrocarbon mixtures of today's gasoline blends.

"Our products match petroleum gasoline in functionality and performance," Cortright said.

"Virent's unique catalytic process uses a variety of biomass-derived feedstocks to generate biogasoline at competitive costs. Our results to date fully justify accelerating commercialization of this technology."

Furthermore, the sugars can be sourced from non-food sources like corn stover, switch grass, wheat straw and sugarcane pulp, in addition to conventional biofuel feedstock like wheat, corn and sugarcane.

This is an important development in light of criticism, most recently from major food and beverage company Nestle, that biofuel production is putting food supplies at risk.

Nestle chairman and CEO Peter Brabeck-Letmathe told the Swiss newspaper NZZ am Sonntag last week that production of biofuels is leading to an increase in the price of maize, soya and wheat while land for food cultivation is becoming scarce.

"If as predicted we look to use biofuels to satisfy 20% of the growing demand for oil products, there will be nothing left to eat. To grant enormous subsidies for biofuel production is morally unacceptable and irresponsible," Brabeck-Letmathe told the newspaper.

Shell and Virent have so far collaborated for one year on the biogasoline research. Future efforts will focus on further improving the technology and scaling it up for larger volume commercial production, the companies have said.

The two companies are also working together on a hydrogen fuel project.