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.

The German flag carrier will start running its engines on some flights on a mix of biofuel and kerosene within two years, Wolfgang Mayrhuber told reporters on the sidelines of an event late on Saturday.

A spokesman for Lufthansa added the airline will likely decide on a more precise schedule by the end of this year.

Aircraft account for an estimated 2-4 per cent of global carbon dioxide (CO2) emissions, which scientists say could cause global temperatures to rise, triggering widespread disease, famine, flooding and drought.

Experts say global aviation emissions could reach 2.4 billion tonnes in 2050, which would be 15-20 per cent of all CO2 permitted under a global agreement and a nearly four-fold increase on current levels.

Lufthansa rival KLM, part of Franco-Dutch Air France, last year became the first airline to test biofuel in a passenger airplane, filling 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.

Continental Airlines, the US airline that is set to create the world's largest carrier by merging with United Airlines parent UAL, had already used a mix of biologically derived fuel and jet fuel on a test flight.

Mayrhuber said Lufthansa had no plans to run individual test flights at this point. Instead, the carrier would wait until it could start using biofuel regularly on some routes to gather reliable data over a longer period of time.

In the long run, the use of biofuel is expected to save airlines money.

'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 at the event, which celebrates 50 years of Boeing planes at Lufthansa.

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 euros ($201-470 million) once airlines join the scheme.-Reuters