Lufthansa said as of Monday it will start the trial use of biofuels on aircraft in commercial flights from April 2011.
The airline will be using synthetic fuel supplied by Finland's Neste Oil, it said.
The six-month trial will involve Airbus A321 aircraft flying between Hamburg and Frankfurt.
If a certificate is awarded for aircraft use of the fuel, one of the Airbus's engines will use a 50:50 mix of biofuel and conventional kerosene, Lufthansa said.
"The primary purpose of the project is to conduct a long-term trial to study the effect of biofuel on engine maintenance and engine life," Lufthansa said.
During the trial, Lufthansa said it expects to save around 1,500 tonnes of CO2 emissions. It is hoped the biofuel for use in the project will be certified for aircraft use in March 2011.
The fuel will be produced by the biomass-to-liquid process, which involves using vegetable wastes as feedstock rather than food crops.
The European Union plans to include airlines in schemes for CO2 emission certificates from 2012, bringing them under pressure to reduce pollution.
Lufthansa said the project would also give it experience in acquisition of biofuels in large quantities and of biofuels logistics challenges.