Virgin Australia on Wednesday announced it would work with Licella, the Australian company behind the invention, to explore the system's potential to make alternative sustainable jet fuel.
The invention, which can turn discarded biomass such as agricultural waste to oil in under half an hour, uses a technology called Catalystic Hydrothermal Reaction (CAT-HTR).
"CAT-HTR offers a cleaner, faster and more cost-effective alternative to processing biomass that is the first of it's kind in the world," Virgin Australia spokesman Sean Donohue said in a statement on Wednesday.
The oil, which the interested parties are hoping will eventually be produced on a large scale in either Australia or New Zealand, could be used in existing refineries and also be refined into petrol, diesel and jet fuel.
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Licella chairman Len Humphreys described the technology as a "break-through".
"(The technology) bears testimony to the high level of commitment by the private sector and by the federal government to finding alternate supplies of crude oil," Dr Humphreys said in a statement on Wednesday.
A demonstration plant, funded by the federal government, has been set up north of Sydney.
