Virgin Atlantic 747 to test biofuel in early 2008

By Al Yoon

BOSTON (Reuters) - Billionaire Richard Branson said on Monday his Virgin Group VA.UL hopes to produce clean biofuels by around the start of the next decade and early next year will test a jet plane on renewable fuel.

Virgin hopes to provide clean fuel for buses, trains and cars within three or four years, Branson told a Mortgage Bankers Association meeting in Boston.

In the meantime, Virgin will be conducting a test jet flight on renewable fuels. "Early next year we will fly one of our 747s without passengers with one of the fuels that we have developed," Branson told the annual conference.

Virgin is developing biofuels for aircraft in conjunction with Boeing Co (BA.N: Quote, Profile, Research) and engine-maker GE Aviation, a unit of General Electric (GE.N: Quote, Profile, Research). Previously, Branson had said the company would test the fuel sometime next year and that some people had said it would be late in the year.

Air New Zealand (AIR.NZ: Quote, Profile, Research) has said it plans to test a flight on a combination fuel of biofuel and kerosene in late 2008, but Virgin is trying to beat that airline by testing biofuels first.

Branson pledged last year to spend all the profit over the next 10 years from his 51 percent stake in Virgin's airline and rail businesses on fighting global warming.

He also created Virgin Fuels, which is investing $400 million (196 million pounds) over three years in renewable energy initiatives, as part of the pledge.

Biofuels, at this point mostly ethanol and biodiesel, have witnessed explosive growth this year amid record oil prices and concern about global warming. They are believed to emit less greenhouse gases because they are made from plants like corn and soybeans that absorb carbon dioxide, the main heat-trapping gas, when they grow.