A Russian firm has unveiled a clean fuel which is expected to replace major pollutants such as diesel and petrol in cars. The company is owned by giant state holding Rostechnologies, not previously known for successfully bringing consumer products to the

The head of Russia's biggest carmaker Avtovaz is testing the world’s first commercially produced wood-based liquid biofuel. It’s something Dupont and BP have been trying to do for years.  Produced by Russia's Biotech, wood waste is converted to clean fuel for use in transport, energy and even animal feed.  Ilya Zaitsev, Communications Director for Biotech believes it’s the answer for the future.

“Our biofuel will gradually replace petrol. It will solve the major problem of pollution in cities.”

Biotech’s one of hundreds of firms transferred by the government to state holding Rostechnologies, now by far the biggest corporation in Russia, including Avtovaz, arms export monopoly Rosoboronexport and, from this week, airline AirUnion.

Its head, Sergey Chemezov claims they can successfully bring this product to the mass market.

“We have advantage over other companies. Due to the assets we have, it's easier for us to get credit and to implement the investment project.”

Environmental concerns mean manufacturers now have to pay for each cubic metre of wood wasted. That makes conversion into fuel big business. Pavel Slipchenko owns a dozen CIS factories turning bark into fuel granules. It’s less versatile than liquid biofuel but also 40 times cheaper, so the likes of power plants in Scandinavia will continue to buy his pellets.

Siberia is called the ‘lungs’ of Europe, and is the largest tract of forest in the world. Yet more than half of every tree felled for industry is currently wasted. Russia has started the revolution of transforming that waste into clean liquid, to power the next generation of cars, planes and power plants.