In July, Brazilian airline GOL became the first airline to use a new type of biofuel to power a commercial flight. The fuel in question was farnesene, which is made from sugar cane. And like the ethanol in your gasoline, 10% of the Florida to São Paulo flight's jet fuel was made of this biofuel. But this isn't the only biofuel you could see taking flight in the future.

While Brazilian discounter GOL may not be the first name that comes to your mind for air travel, it isn't the only one testing farnesene. For example, Lufthansa (NASDAQOTH:DLAKY) has been using the fuel, too, just not on commercial flights. That small and large airlines are looking at farnesene, however, is big news for Amyris (NASDAQ:AMRS), a California biotech firm that created the biofuel with France's Total (NYSE:TOT). Of the two, Amyris has much more on the line than Total, since it's basically a tiny start-up that's losing money (the red ink was over $3.00 a share last year).

Source: Andrzej Otrębski, via Wikimedia Commons.

Nothing special
Losing money, however, isn't unusual in the biofuel space. The industry is relatively new, the technology is untested at scale, and the companies involved are working to both perfect their products and gain a toehold in the market. 

For example, Solazyme (NASDAQ:TVIA) is another money-losing biofuel company (it lost about $1.80 a share last year). Solazyme uses algae to produce biofuels and other oils, like those used in food. It is testing its fuels with the U.S. Department of Defense and the U.S. Navy. Solazyme makes fuels for cars and, like Amyris, jet engines.

In fact, United Airlines, part of United Continental Holdings (NYSE:UAL), used algae to power a commercial flight in 2011. Later the same year, Alaska Air Group (NYSE:ALK) also used biofuels to power commercial flights. However, Alaska Air made the dollars and cents assessment that's a lingering problem for biofuels: "The 28,500 gallons of fuel cost nearly six times more than conventional 'Jet A' aviation fuel, or about $17 a gallon, because no large, stable supply of biofuels exists yet."

Turning the tables
However, some industry watchers believe farnesene could be the biofuel that solves the cost conundrum. In fact, Steve Csonka, executive director of the Commercial Aviation Alternative Fuels Initiative, recently told The New York Times that, "...there is nothing from a technical or aviation industry standpoint holding it back," That just leaves cost, which Amyris CEO John Melo explained to the paper could be resolved in as little as three years.

How? The answer is partly about location. Amyris' farnesene plant is located in Brazil, the world's largest producer of sugarcane. Since that's the feedstock for farnesene, it means there's ample supply. That said, the company is looking at using other materials as feedstock, too, like organic waste products. In addition, Brazil is not only the world's second largest producer of ethanol, another biofuel, but it has integrated the fuel into its infrastructure.

For example, Sugercane.org, backed by the Brazilian Sugarcane Industry Association and the Brazilian Trade and Investment Promotion Agency, estimates that around 90% of the vehicles sold in Brazil have engines that can use either gasoline or pure ethanol. Essentially, Brazil has made a big commitment to biofuels, putting the infrastructure in place to support a wider adoption of farnesene.

A long time
So, farnesane has some big potential advantages in place, but three years is a long time to wait for the price to come down to competitive levels. And a big part of that price decline will come from further research and development, not infrastructure. That means this money-losing company has more money to spend (and likely lose).

That said, Amyris believes the aviation industry is an over $200 billion market opportunity. Which could make this company's recent successes with GOL and Lufthansa important stepping stones to wider acceptance and, with any luck, profits. If you're an aggressive investor, Amyris may be worth a deeper dive.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Total (ADR). The Motley Fool owns shares of Solazyme. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.