Lufthansa is set to become one of the world’s first airlines to mix biofuel with traditional kerosene on commercial flights as carriers seek ways to cut soaring fuel costs, its chief executive said recently.

The German carrier will start running its engines on some flights on a mix of biofuel and kerosene within two years, Wolfgang Mayrhuber told reporters, according to Reuters.

Lufthansa rival KLM, last year became the first airline to test biofuel in a passenger aircraft, running one of four engines on a Boeing 747 with biofuel for a 1.5 hour test flight. The carrier has said it aims to make commercial flights which use biofuel from 2011.

“First, we are hoping to get some resource security, and second, we hope that we will have some advantages in our costs for emissions trading,” Mayrhuber said.

The European Union is set to extend its Emissions Trading System (ETS) to airlines from 2012, and the less traditional kerosene airlines use every year, the fewer certificates they have to buy permitting them to pollute the air. Lufthansa has estimated its annual costs from the ETS at €150-350 million once airlines join the scheme.