It evokes images of the vintage days of aviation, when flying around the world was a luxury few could afford. But propeller-driven aircraft, inspired by the iconic Spirit of St Louis, could make a return thanks to innovative fuel-saving designs.

The Guardian has learned that Rolls-Royce recently cleared a major hurdle in testing its new design for a propeller-driven engine, involving a double rotor and new blade shape. Engineers have called Rolls-Royce's design a "tremendously significant" step forward.

The company claims the design could cut an airline's fuel bills and greenhouse gas emissions by 30%. "We're talking about saving $3m or 10,000 tonnes of CO2 per year per aircraft if you introduce an open-rotor on to a 100-200-seater aircraft," said Mark Taylor, an engineer at Rolls-Royce who is leading a project to design the next generation of aircraft engines.

Modern propeller-driven engines, also known as advanced open rotors or turboprops, are acknowledged to be more fuel efficient than the turbofan and turbojet engines used by most aircraft today. But, despite much research and testing by all the major engine manufaturers in the early 1980s, they never caught on, partly because they are far noisier. But with the growth in aviation causing major environmental concerns, aeronautical engineers believe that the open-rotor engine could have a new lease of life.

"We believe that, based on our test, we can produce a quiet and efficient open-rotor engine," said Taylor. The company believes its design would be quieter than any aircraft in operation today.

Rod Self, an acoustic engineer who works on aircraft engines at Southampton University said Rolls-Royce's latest work was "tremendously significant — they are a significant player in this market. On the noise front, they've got the best models going and … a lead on others in the field."

Efficiency improvements are sorely needed, said Alice Bows, a climate scientist at the University of Manchester's Tyndall Centre who specialises in aviation's environmental impact, said: "The amount of CO2 from aviation looks to be 2-3%, a relatively small proportion of the world's total. But you've got annual growth of 6-7% in terms of passenger kilometres with efficiency improvement only at around 1%."

Turbofan engines work by sucking in air with a enclosed fan at the front of the engine. Most of this air is pushed out of the back to produce the thrust needed, with the rest used to burn fuel to drive the fan. The more air that is pushed out rather than burned, known as the bypass ratio, the more efficient the engine is. Put simply, open-rotor engines have a higher bypass ratio than turbofans or turbojets for an equivalent-sized device.

Another reason for the higher efficiency of open-rotor engines is that, unlike traditional engines, they do not have a casing around the propeller. The casing increases weight and drag. "Because you've removed the [casing], you're able to go to much bigger fan diameters and not incur the weight and drag penalties," said Taylor.

The airline industry has been here before. The oil crisis in the late 1970s encouraged engineers to design engines inspired by the old propeller-aircraft of the first half of the 20th century but incorporating the jet technology used in the more modern aircraft engines.

American engine manufacturers Pratt & Whitney and General Electric, both funded by Nasa, flew open-rotor designs for several hundred hours on McDonnell Douglas and Boeing aircraft. But two factors prevented open rotors from being used commercially — noise and propeller designs. In addition, the drop in the price of oil meant there was no great incentive to save fuel.

But the rise in the price of oil over the past year coupled with environmental concerns mean that efficient engine designs once again look attractive.

Rolls-Royce's design uses two sets of propellers near the rear of the engine, which rotate in opposite directions. This reduces the energy wasted when propellers twist some of the air, rather than pushing it all straight backwards. "If you have a second set spinning in the opposite direction, you untwist it and recover the energy from that air. That goes into useful force to drive the aircraft forward," said Self. "But it's even more noisy."

The sources of noise in an open-rotor engine come from different aspects of the propeller, such as their thickness and whether the tips spin faster than the speed of sound. Rolls Royce's engineers specifically tackled these problems by increasing the number of blades on the rotors, changing their shape from the traditional elongated to a more squat design and making the blades thinner. The result was, claims Rolls-Royce, a set of rotors that can turn at a slower speed — and hence make less noise — while maintaining a high efficiency.

The British-based company is not the only one investigating the open-rotor concept. General Electric, Pratt & Whitney and French company Snecma all have open-rotor prototypes under construction, though commercial secrecy means their progress is unclear.

Taylor said there was a choice for airlines. "You could go for a low-noise advanced turbofan or you could trade that for some noise and go for a much more efficient engine and that is the question we're asking the aviation industry. What would you rather have — a bit better noise profile or better fuel burn and lower CO2?"