The company's biofuels research team is working with biotech firms and academic institutions across the world on the flagship project in a bid to commercialise its R&D work in this field.

However it admits the research being carried out is highly complex and poses "considerable challenges" and says not every process being developed will become commercially available.

One area of work being examined is enzyme technology. Shell has teamed up with Canadian firm Iogen Energy to develop technology that uses enzymes to break down cellulose in crops such as wheat and barley straw.

The cellulose is converted to sugars which are fermented and distilled into ethanol at a demonstration plant in Ottawa. Iogen is now looking into potential sites for a commercial facility in Canada.

Shell is also engineering 'super enzymes' that speed up the conversion of biomass to ethanol and has a joint technology development programme with US firm Virent to convert plant sugars and inedible biomass directly into a range of fuels.

In 2010 Virent opened the world's first facility to convert plant sugars directly into a petrol-like biofuel and research is now being carried out to produce diesel and jet fuel using the same process.

According to Shell's 2011 sustainability report released today (April 12), utilising crop waste offers a more sustainable biofuel production route in terms of responsible land management.

Last year the company engaged with industry partners and NGPs to commission an independent study into how EU policy could address the potential for biofuel crops to displace other crops into sensitive areas.

Shell is one of the world's largest biofuels distributors and predicts that biofuels will account for 9% of the global transport fuel mix by 2030.

Maxine Perella