The Obama administration on Tuesday announced a joint project among the U.S. departments of Agriculture, Energy and the Navy to invest $510 million over three years to produce advanced biofuels for planes and ships.

The initiative is part of a broader administration strategy to reduce reliance on imported oil and could lead to more rapid development of commercial-scale biofuel refineries.

Private-sector companies will be asked to compete for the funding, and they will be required to match every federal dollar – potentially creating investments worth more than $1 billion.

Madison-based Virent Energy Systems won a federal Energy Department grant this summer to develop renewable jet fuel from sugars that come from crops that aren’t eaten. The company has been producing jet fuel from conventional sugars for several years at its pilot biofuel refinery in Madison.

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