Commercial production of jet fuel in Australia, using Linc's Underground Coal Gasification (UGC) and Gas to Liquids (GTL) technology, would improve the economy and Australia's energy security.

''It is a truly macro change in economic policy for the country,'' Mr Bond said shortly before he began his ''world-first flight'' powered by Linc's UGC and GTL know-how.

At this stage a small amount of the synthetic fuel is being produced by Linc at a demonstration plant in Chinchilla, Queensland. The energy producer hopes to get approval soon for a bigger facility.

A new $200 million plant would take 18 to 20 months to build and would produce 3000 to 5000 barrels a day of Linc's synthetic jet and diesel fuels from deep coal resources.

''And about every 20 months after that you can build another module,'' Mr Bond said.

''If you really want to ramp it up - say, 100,000 barrels a day will transform the country's future - we can probably put that in place in the next five years.''

Citing federal government figures from last year, Mr Bond said Australia's net import of crude oil and refined material for the production of transport fuel was about 470,000 barrels a day.

At $100 a barrel for crude oil, that amounted to about $47 million a day or $17 billion a year.

Mr Bond begins his flight in a Cessna Citation CJ2 in Perth today. He will stop off in Adelaide and Melbourne before heading to Canberra tomorrow and Sydney and Chinchilla on Wednesday.

He said the Jet A1 synthetic fuel has been manufactured to the standard approved by the International Air Transport Association, which was a 50:50 blend with standard jet fuel.

''We've had some early discussions directly with the airlines,'' said Mr Bond, who explained the synthetic fuel had significantly less total emissions than traditional mineral kerosene.

There is a big push for cleaner fuels in the aviation industry. Qantas has powered a one-off flight using a blend of recycled cooking oil and standard jet fuel. Australia's biggest airline also has been working on other alternative fuel sources, such as algae or household waste.

The two biggest makers of jet engines, Rolls-Royce Group and General Electric, say the industry has largely focused on ''drop-in'' alternative fuels that are compatible with existing engine technology.

Rolls-Royce's chief engineer of future programs in civil aerospace, Alan Newby, said biofuels had the potential to offer substantial CO2 benefits if they met three key requirements - suitability in terms of a drop-in fuel, sustainability and scalability to make it commercially competitive with kerosene.

GE Aviation's leader of alternative fuels, Mike Epstein, said over the next 20 to 30 years there would likely be a transition to an ''olive'' economy.

''Not completely renewable or 'green' nor completely non-renewable or 'black' but rather a mix that looks 'olive','' Mr Epstein said.

''So I think there's room for a whole suite of solutions provided they are developed with the object of minimising their environmental footprint relative to conventional oil and can be produced at competitive rates.''