Biofuels are used in the fight against climate change
Scientists are working with farmers and fuel companies to produce a greener form of biofuel.
The project is using sugar-rich varieties of perennial ryegrass as a raw material for producing bio-ethanol.
It is being developed at Aberystwyth University's Institute of Biological, Environmental and Rural Sciences.
Biofuels are hailed as a way to fight climate change, but critics say they affect food stocks and prices, and may actually hinder the fight against climate change.
Supporters of so-called "second-generation" biofuels say they do not compete with food sources for land - unlike some current biofuels, which are made from the edible parts of crops such as corn or sugar cane.
But critics say these biofuels need fertilisers which themselves produce greenhouse gases, and that they can displace food production from agricultural land, causing deforestation.
Biofuels are seen as a way of reducing greenhouse gas emissions compared with conventional transport fuels such as petrol and diesel.
Burning the fuels releases CO2, but growing the plants absorbs a comparable amount of the gas from the atmosphere.
Researchers working on the three-year Grassohol project at the Institute of Biological, Environmental and Rural Sciences (Ibers) are using sugar-rich varieties of perennial ryegrass.
They are also experimenting with different soils, fertilizers and crops such as white clover.
"The Grassohol project has only been made possible by the invaluable expertise that each partner brings to the table," said Ibers research scientist and project director Dr Joe Gallagher.
"Farmers in the UK are experts on growing pasture and the use of these crops for biorefining will make an important contribution to both farm income and the UK economy whilst maintaining the traditional look of the countryside."
Early results are promising and indicate that up to 4,500 litres of ethanol per hectare of ryegrass could be produced every year.
This is comparable with other energy crops, but Ibers said it had the advantage of being able to grow the ryegrass on poor quality land to create something that was environmentally friendly and cheaper to produce.
Dr Kirstin Eley of fuel company TMO Renewables, which is part of the project, said: "This is a real opportunity to demonstrate the potential of a commercially relevant process using an abundant UK non-food crop feedstock and we are excited to be a part of this collaboration, working alongside other leading groups."
Earlier this year, scientists at Aberystwyth University revealed they were turning elephant grass, more commonly known as a garden plant, into biofuel.
The UK Government has said that by 2010 5% all fuel should come from biofuels.
The European Union has gone further, setting a target of 10% by 2020.