Scottish whisky makers are set to become the first distillery in the world to use by-products to create eco-friendly bio-fuel.

Perthshire malt whisky makers Tullibardine have signed a deal with Celtic Renewables Ltd. which will see the development of technology capable of producing biobutanol as a by-product of distillation.

The bio-fuel will be capable of powering vehicles that normally run on petrol or diesel.

Currently, whisky by-products are spread on agricultural fields, turned into animal feed or safely discharged into the sea under license; all at a cost.

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Currently, Tullibardine spends £250,000 disposing of its by-products every year.

The new project is thought to have the potential to create a £60m-a-year industry.

Ministers believe it could contribute to the government’s target of reducing carbon emissions by 42% by 2020, as well as contributing to the EU mandated bio-fuel target of 10% by 2020.

Douglas Ross, the managing director of Tullibardine, said: "We are delighted to be partnering Celtic Renewables in this innovative venture, the obvious benefits of which are environmental."

The pilot demonstration project has received a £155,000 grant from Zero Waste Scotland.

Iain Gulland, Director of Zero Waste Scotland, said: "To become a zero waste society we need to find new, innovative ways of turning wastes and by-products into high-quality products."

The original research was conducted at Edinburgh's Napier University on a small scale of three litres, while the current second-phase testing at the CPI will systematically scale up to 10,000 litres.

(IT)