Scientists are working to develop a reactor which produces fuel using sunlight and carbon dioxide as a widespread way of cutting carbon emissions.
The international research team, led by Heriot-Watt University in Edinburgh, will try to increase the efficiency of "photo-catalytic reduction", a process that uses solar energy to convert carbon dioxide (CO2) into fuels like methane and methanol.
Any carbon produced when the "clean fuel" is used is converted back into energy through a "closed loop" system, the researchers said.
The team have been given a £1.2 million grant from the Engineering and Physical Sciences Research Council (EPSRC) to carry out the work, in the hope they can increase the photo-catalytic process for wider use. If it is successful on a commercial scale, the scientists estimate the process could offset up to 700 million tonnes of CO2 each year.
Existing photo-catalytic reduction processes do not produce enough fuel to make them financially viable, according to the university. The project will involve developing new, highly efficient photo-reactors, with conversion rates that can be scaled up to a commercial process.
Professor Mercedes Maroto-Valer, director of the Centre for Innovation in Carbon Capture and Storage (CCS), will lead the work in the UK and the team includes engineers and chemists based in Taiwan, the US, Canada and China.
She said: "By developing this novel reactor and processes, we could unlock a hugely significant source of carbon-neutral fuel. We are working on creating a technology that will turn this into a genuine game-changer, turning a climate-changing gas into a climate-saving fuel.
"We will have the input of leading industry players throughout this research, ensuring that the technology we develop can be used with existing infrastructure."
Dr Robin Irons, from energy provider E.ON's Innovation Centre for CCS, said: "Industry will be working hand-in-hand with the international team of academics, making this a truly global project designed to deliver a globally significant breakthrough."
Professor David Delpy, chief executive of the EPSRC, said: "Supporting and developing leaders who can deliver answers to the world's major engineering challenges is one of our priorities. The work Professor Maroto-Valer's research team are carrying out has the potential to provide enormous worldwide benefits and opportunities."