Sierra Nevada Brewing Co has joined forces with The E-Fuel Corporation in order to transform brewing waste into commercial ethanol, for use as an alternative energy source.

The US brewer said yesterday (3 February) that it intends to produce "high-grade ethanol fuel" from discarded beer yeast. It has signed a deal with E-Fuel Corporation, founded in 2007 and producer of a 'home ethanol system'.

Sierra Nevada said that E-Fuel will install its system, the E-Fuel100 MicroFueler, at the group's brewery in Chico, California, allowing it to produce ethanol fuel on-site. Testing is set to begin in the second quarter of 2009.

Ken Grossman, Sierra Nevada founder and president, said: "This has the potential to be a great thing for the environment and further our commitment to be becoming more energy independent."

The group said that it currently resells 1.6m gallons of unusable beer yeast waste to farmers each year, for use as dairy cattle feed.

Interest is growing across the beer industry in the commercial use of brewing waste as an alternative energy source.

Last month, a GBP27m (US$38.8m) bioenergy research project was launched in the UK, partly funded by SABMiller. The brewer will provide experts, facilities and raw materials so that researchers can assess the viability of using spent grain from brewing to produce an alternative energy source.