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A liquid fuel made from plants that is chemically identical to crude oil but which does not contribute to climate change when it is burned or, unlike other biofuels, need agricultural land to produce sounds too good to be true. But a company in San Diego claims to have developed exactly that – a sustainable version of oil it calls "green crude".

Sapphire Energy uses single-celled organisms such as algae to produce a chemical mixture from which it is possible to extract fuels for cars or airplanes. When it is burned, the fuel only releases into the air the carbon dioxide absorbed by the algae during its growth, making the whole process carbon neutral.

Major investors are already opening their cheque books: Sapphire has raised a total of $50m (£25m) in venture capital in recent weeks, the highest amount ever for an algae biotech company, including a significant investment from the UK's Wellcome Trust.

Algae are seen by many experts as promising a source of green fuel in the future: ranging from single-celled organisms to large seaweeds, they are the world's most abundant form of plant life and, via photosynthesis, are extremely efficient at using sunlight and carbon dioxide from the air to make organic material such as sugars, proteins and, under the right conditions, oils.