Teesside BioTech firm Nova Pangaea Technologies has secured £2.3m funding to commercialise its fuel generation technology.

The firm has developed a new way to generate fuel and chemicals from waste biomass.

The funding round was led by NPIF - Mercia Equity Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund.

Additional funds came from existing investors including Cambridge Angels and venture capital firm Par Equity.

Nova Pangaea’s technology processes ‘non-food biomass’ such as waste timber, straw or other crop waste and uses it as a basis for chemicals or bio-ethanol, which can be blended into petrol.

Its technology could cut carbon emissions and reduce reliance on oil without using land or crops suitable for food and as a result provide a source of income for industries such as sugar or any which produce a large amount of waste biomass.

The company, which is building a demonstration plant at Wilton with the help of a £4.6, Department of Transport (DfT) grant, currently employs ten staff in addition to local subcontractors, but Mercia said the firm believes it could create hundreds of new jobs in the longer term.

The firm is run by engineer and serial entrepreneur, CEO Ed Wilson.

“This latest funding round represents a major milestone on our journey to commercialisation,” said Wilson.

“With the support of our investors and the commitment of expert staff and board, our technology will soon be providing real ‘green’ benefits to the UK and within the huge global marketplace, reinforcing the UK’s position as a leader in the sector.”

Simon Crabtree, Investment Manager at Mercia, added: “Nova Pangaea has created a fantastic technology that could make a significant impact on both the UK and the world’s energy and chemicals needs, and break the reliance on oil. We are delighted to back Ed and his industry-leading team. “

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.