The future of aviation fuel may be growing on trial plots in northern Australia, as scientists search for new means of keeping the world's airliners aloft.

The Australian government science agency CSIRO and American aviation giant Boeing have launched a study to evaluate the potential to turn biomass into climate-friendly aviation fuel.

The programme is tied to the CSIRO's Flight Path to Sustainable Aviation roadmap released last year, which sketches a potential boom industry for Australia and New Zealand.

The roadmap envisages a transtasman biofuel sector that could save the two countries billions of dollars a year by replacing petroleum-based fuels, and open the potential for exporting new engineering know-how.

The Australian research joins other agreements Boeing has reached with airlines, academic institutions and industry groups in the Middle East, China, Mexico, United States and Brazil over the past two years.

"Aviation fuels made from biomass have been certified and are being used on commercial and military aircraft, so the challenge now is to find the right way to scale up feedstock production so these new fuels are both environmentally and economically sustainable," Boeing Research and Technology's Australian general manager Michael Edwards said.

Over the next year Australian researchers will assess the potential of biomass production systems based on feedstocks such as grasses and short-rotation trees in combination with grazing or cropping in regional Queensland.

They will also assess the technology needed to turn the feedstocks into jet fuels, and production systems and technology compatible with local infrastructure.

Bioenergy and sustainability expert Dr Deborah O'Connell, who heads the programme, said the aim was to find and match new fuel sources to existing land uses.

The CSIRO and Boeing will later try to attract further investment and partnerships to develop and commercialise the most promising options.

The potential, according to the CSIRO, is huge.

Although the global aviation industry is already trying to reach carbon neutral growth by 2020 - with an aspirational goal of 50 per cent reduction from 2005 levels by 2050 - present efforts to use advanced aircraft, fuel conservation and improved airspace management will not alone be sufficient, it says.

Aviation needs a substitute for petroleum-based fuel to reduce emissions and improve energy security.

"The only alternative fuel which can meet all of the environmental, economic and technical challenges is sustainable aviation fuel derived from biomass."

It says that with domestic petroleum supplies dwindling, there is strong incentive for Australia and New Zealand to capitalise on the potential production of biomass.

CSIRO research concluded that ongoing fuel tests, demonstration flights and proven refining technology had raised confidence that bio-derived jet fuel blends could be created to meet the industry's stringent safety and technical fuel standards.

Some have already been certified.

The roadmap says that by using a variety of existing and new non-food biomass resources and sustainable practices for growing them, there will be sufficient biomass to support almost half of the aviation fuel needs of Australia and New Zealand by 2020 and more than 100 per cent of fuel needs by 2050.

"While some of these resources are currently above the cost of traditional fossil fuel, the quantum of economically viable bio-derived jet fuel production is expected to increase considerably in the future as the cost of new biomass resources and refining technologies decline," it says.

"Australia and New Zealand are well positioned to establish a sustainable fuels industry given the region's favourable climate, land base, stable geopolitical environments and comparative advantages in skilled labour including construction, research and development and efficient agricultural production."

The roadmap calculated the potential gains based on a scenario under which the transtasman aviation sector achieves a 5 per cent bio-derived jet fuel share by 2020, and 40 per cent of total fuel use by 2050.

If this is achieved, the two countries could save more than AU$2 billion (NZ$2.27 billion) a year on jet fuel imports and achieve a 17 per cent annual reduction in aviation greenhouse gas emissions, the roadmap says.

A biofuel industry would also potentially create 12,000 new jobs by 2030.