Finnish flag carrier Finnair is set to become the first airline in the world to use fuel produced from renewable sources when it is planning to start fueling some of its planes with bio-fuel in the coming spring, reported Finnish media Tuesday.

According to the report, the bio-fuel set to power Finnair airplanes is bio-kerosine supplied by the Finnish energy company Neste Oil, which is produced from logging waste and animal fat.

The use of the bio-fuel is expected to be officially approved by the American Society for Testing and Materials by spring of 2011. As soon as this happens, Finnair will use a blend of 50 percent bio-fuel and 50 percent fossil-based jet fuel on its aircraft flying from Helsinki to London and Singapore.

In addition, Lufthansa has also signed a cooperative arrangement with Neste Oil to use the renewable jet fuel on its aircraft flying between Frankfurt and Hamburg of Germany since the coming spring.

According to CEO of Neste Oil Matti Lievonen, the airlines are planning to use the mixture of bio-fuel and conventional fuel during the initial phase, but the Neste Oil product is capable of totally replacing the JET A-1 fuel.

According to European Union (EU)'s plan, flights to and from EU destinations will be included in the EU's Emissions Trading Scheme from 2012 onwards, requiring airlines either to offset their emissions using emission certificates or use renewable fuels. Therefore, Neste Oil is expecting a great increase in demand for the bio-fuel although its current price is two times of that for fossil fuel.