An airplane running on hydrogen or cellulosic ethanol? The idea may seem sound outlandish, but if properly designed, the less polluting, quieter planes would be a very attractive proposition.

That's why the European Union is partnering with the European aerospace industry to provide a 1.6B euro ($2.4B USD) research project grant to explore innovative technologies, including alternative fuel aircraft. The project is dubbed the “Clean Sky” project. The EU will provide 800 million euros from its 2007-2013 budget, and the industry is putting up an equivalent figure.

Participating aerospace firms are agreeing to share their research, which should create a valuable exchange of innovative solutions. Among the ideas being explored are engines that use alternative fuels and more efficient engines to conserve fuel.

Also being explored are technologies to make aircraft less noisy. This both helps to reduce noise pollution around airports, a frequent urban problem, and provides passengers with a quieter, more relaxing ride.

Marc Vantre, CEO of French conglomerate Safran's aerospace propulsion division, highlighted the key metrics in an address to reporters, stating, “There are three main objectives: the reduction by 50 percent of carbon dioxide, halving the level of noise and reducing by 80 percent the level of nitrogen oxide emissions.”

A total of 16 of the European Union's member nations have non-government entities participating in the project, with 54 industries, 15 research centers, and 17 universities from these nations on-board.

Saab's aircraft division is among the investors. Ake Svensson, CEO of the Swedish company states, “So far we are allocating about 150 million Swedish crowns ($23.67 million) for taking part in two programs, the smart fixed wing initiative and green operations, where it's not only about what you fly but how you fly.”

A provisional executive committee will determine how patents and technologies developed in the Clean Sky project are shared among companies. The move is fueled in solid economics as many of the technologies discovered are expected to bring large cost savings to the airline industry by improving fuel economy.

The EU sees the program as essential to remaining competitive with the U.S., which launched a similar aeronautics research and development policy in 2006.