UPDATE 1-Amazon nuts help power first biofuel airline flight

(adds reaction from Friends of the Earth paragraphs 5, 10, 11)

By Nigel Hunt

LONDON, Feb 24 (Reuters) - Nuts picked from Amazon rainforests helped fuel the world's first commercial airline flight partly powered by renewable energy on Sunday.

A Virgin Atlantic [VA.UL] jumbo jet flew from London to Amsterdam with one of its fuel tanks filled with a bio-jet blend including babassu oil and coconut oil. A Virgin Atlantic statement said the biofuel mix provided 25 percent of the fuel for the test flight.

The biofuels blend on the Virgin flight contained 20 percent neat biofuel and 80 percent conventional jet fuel. Virgin founder Richard Branson said tests had shown it was possible to fly with a 40 percent blend.

"Today marks a vital breakthrough for the whole airline industry," Branson told reporters in a hangar at Heathrow airport prior to the flight's departure.

Environmental lobby group Friends of the Earth said biofuels were a distraction in the fight to cut carbon dioxide emissions, and that related carbon savings would be negated by increased airline travel.

British billionaire Branson said it was unlikely the nut of the wild growing babassu palm would play a key role as airlines turn to renewable fuel sources to cut the industry's greenhouse gas emissions.

"We did not want to use biofuels such as corn oil which were competing with staple food sources," he said, adding he believed algae produced in places like sewage treatment farms were the most likely future source of renewable fuel for the airline industry.