Under the terms of the accord, the Celtic Renewables, a spin-out company from the Biofuel Research Centre at Edinburgh Napier University, will develop its technology at Bio Base Europe Pilot Plant (BBEPP) in Ghent, Belgium.

Celtic Renewables president Professor Martin Tangney said, "Our ambition to grow a sustainable, international industry from Scotland requires strong partnerships and we are delighted to be working with BioBase Europe Pilot Plant, to help us complete the next, crucial stage in our development."

The company earlier demonstrated its concept of producing biobutanol from whiskey waste known as draff and pot ale.

BBEPP CEO Professor Wim Soetaert said, "Biobased production is already transforming a broad range of industries around the world and Celtic Renewables, making advanced biofuel and sustainable chemicals from whisky by-products, is exactly the kind of inspired innovation that our BBEPP is designed to support."

Over the next few months, the company will work to replicate work done in its Scottish laboratory at an industrial scale.

The Celtic Renewables’s work is expected allowing to be used as a direct replacement for petrol and diesel while eliminating the need to modify engines.