Algae from Christchurch's sewage ponds will be made into biofuel from next month.
The National Institute of Water and Atmospheric Research (NIWA) says the scale of the project and the type of ponds used make it a world first.
The scheme is a partnership between the Christchurch City Council, NIWA and a private South Island company, Solray Energy.
The council has provided land for the ponds and carbon dioxide from its wastewater treatment plant.
NIWA has provided the ponds and the technology to use the carbon dioxide to stimulate the naturally occurring algae.
And Solray's patented technology will turn it into biofuel.
Solray says enough crude bio oil will be made to meet 15% of Christchurch's needs.