The Department for Transport is funding £25 million for green fuel projects.

Companies Celtic Renewables in Edinburgh, Advanced Plasma Power in Swindon and Nova Pangaea Technologies from Tees Valley will receive a share of the loan which will help boost the local industry.

The projects will convert whisky, household and forestry waste into biofuel.

They are expected to produce three million litres of biofuel by 2018 and save around 60% of greenhouse gas emissions.

They will also create more than 5,000 jobs by 2030, open up international markets and promote the renewable sector, the department stated.

UK Transport Minister Andrew Jones said: “Biofuels have an important role to play in keeping Britain moving forward in a sustainable and environmentally-friendly way.

“Advanced biofuels have the potential to save at least 60% of the greenhouse gas emissions from the equivalent fossil fuel. The three successful bids show how the government is investing in transport and making better, clean journeys.”