Premier Campbell Newman has inspected a pilot plant in western Brisbane where an alternative fuel for planes and cars is being produced from algae.

Once a commercial grade is produced, the algae could provide a multimillion-dollar source of energy for cars and aircraft.

The Solar Biofuels Research Centre at Pinjarra Hills unveiled its latest research on using algae to provide fuel on Tuesday.

Algae is essentially protein, carbohydrates and oils. By extracting the moisture and the oils it is possible to make algae cakes to feed grazing stock, fish and poultry, while the oils yield alternative fuels.

The research centre director, Associate Professor Ben Hankamer, outlined the research to Mr Newman and Science Minister Ian Walker on Tuesday.