Beijing, Nov 15 (IANS): Airbus has signed a deal with Chinese biofuel producer ENN to jointly explore an alternative fuel for the aviation industry.

Airbus, with its parent company EADS Innovation Works, signed the Memorandum of Understanding (MOU) with ENN, one of the leading biofuel producers in China, to develop the fuel made from algae oil, reported Xinhua.

The deal was struck at the ongoing 9th China International Air Show in Zhuhai, Guangdong province.

Algae oil, extracted, processed and refined from certain species of algae, is regarded as one of the most promising ways for the production of biofuels in the aviation industry.

According to the MOU, a test flight with the biofuel is scheduled for 2013 in China, after a Sino-US feasibility study of the biofuel is concluded.

The partners also agreed to assess the environmental, economical and social impact of the biofuel for aviation use, and promote its marketing in China.

The ENN company, which owns microalgae oil making equipment, can make more than 10 tonnes of the product annually. Starting from 2013, it will enhance its capability to meet the demand of biofuel-based flights.