The European Commission announced it’s funding a new solar fuels research project, which will be spearheaded by Volkswagen AG.

Just under 6 million euros ($6.6 million) has been allocated for the study under Europe’s research and innovation program Horizon 2020. Volkswagen AG has been named as the lead coordinator and will be joined by 11 other participants (including Volvo and the Finnish Neste Oil Corporation).

Named Photofuel, the scope of the project is to develop a solar fuel that can be manufactured for retail sale. Four key ingredients are used to produce the fuel: tiny organisms – called microbes or biocatalysts – sunlight, water and carbon dioxide.

The European Commission’s Community Research and Development Information Service (CORDIS) explained the process further:

“Microbial cells directly excrete hydrocarbon and long chain alcohol fuel compounds to the medium from which they are separated, without the need to harvest biomass,” said CORDIS. “The products are drop-in fuels that fully or partially replace their fossil counterparts without the need for new infrastructure.”

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Europe has limited farmland available, noted CORDIS, which excludes the region from growing a large number of crops such as corn to produce biomass. As a result, Europe’s ability to produce biofuel is restricted.

But by using on microbes instead of plants “significantly improves the costs and energy balances as only a minimum of nutrients is required for self-replication of the biocatalyst, whilst cell harvesting, drying and lipid extraction is omitted,” explained CORDIS.

Once the best system to produce a solar fuel has been found, the researchers will consider if solar fuels can be used as a blend or an additive with fossil fuels. Environmental and economic impacts will also be evaluated, and CORDIS said the final results will be analyzed by oil and automotive companies.