A £1m study hopes to use the humble grass plant to produce "green" chemicals for plastic and cosmetics.
IGER has worked on several high profile projects
The Institute of Grassland and Environmental Research (IGER) said climate change made it essential to search for "cheap and renewable" sources for chemicals.
Its scientists based near Aberystwyth are experimenting using ryegrass, a species grown across the UK.
They will also be helped by a team from the University of Wales in Bangor.
Members of its Centre for Advanced and Renewable Materials (CARM) will play a leading role.
"Much of the previous work in this area has focused on fermenting starch from maize, but we think that ryegrass would be a better option for the UK," said IGER's Dr Steve Fish.
"Greater use of renewable, plant-derived compounds by industry is an attractive goal and we believe our research will ease this transition by creating new cost-effective methods suitable for the UK."
Researchers hope to extract lactic acid and succinic acid - both used commonly in cosmetics and plastics.
Dr Rob Elias, CARM's commercial manager, said the project was a major opportunity for Wales.
He added: "By working together we can really help address some of the issues facing the replacement of petrochemical sources of materials."
Funding for the three-year study has come from the Department of Trade and Industry and a range of companies, including high street chemist Boots.