So-called microalgae hold enormous potential when it comes to reining in both climate change, since they naturally absorb large amounts of carbon dioxide, as well as energy production, since they can easily be converted to a range of different fuel types.

"This is certainly one of the most promising and revolutionary leads in the fight against climate change and the quest to satisfy energy needs," said Frederic Hauge, who heads up the Norwegian environmental group Bellona.

The idea is to divert exhaust spewed from carbon burning plants and other factories into so-called "photobioreactors," or large transparent tubes filled with algae.

When the gas is mixed with water and injected into the tubes, the algae soak up much of the carbon dioxide, or CO2, in accordance with the principle of photosynthesis.

The pioneering technique, called solar biofuels, is one of a panoply of novel methods aiming to crack the problem of providing energy but without the carbon pollution of costly fossil fuels -- with oil at record high prices -- or the waste and danger of nuclear power.

Studies are underway worldwide, from academia in Australia, Germany and the US, to the US Department of Energy, oil giant Royal Dutch Shell and US aircraft maker Boeing. This week alone, Japanese auto parts maker Denso Corp., a key supplier to the Toyota group, said it too would start investigating, to see if algae could absorb CO2 from its factories.

The prestigious Massachusetts Institute of Technology (MIT), for one, has successfully tested the system, finding that once filtered through the algae broth, fumes from a cogeneration plant came out 50-85 per cent lighter on CO2 and contained 85 per cent less of another potent greenhouse gas, nitrogen oxide.

Once the microalgae are removed from the tubes they can easily be buried or injected into the seabed, and thus hold captive the climate changing gases they ingest indefinitely.

And when algae grown out in the open are used in biomass plants, the method can actually produce "carbon negative" energy, meaning the energy production actually drains CO2 from the atmosphere.

This is possible since the microalgae first absorb CO2 as it grows and, although the gas is released again when the biomass burns, the capturing system keeps it from re-entering the air.

"Whether you are watching TV, vacuuming the house, or driving your electric car to visit friends and family, you would be removing CO2 from the atmosphere," Hauge said.

Instead of being stored away, the algae can also be crushed and used as feedstock for biodiesel fuel -- something that could help the airline industry among others to improve its environmental credentials.

In fact, even the algae residue remaining after the plants are pressed into biodiesel could be put to good use as mineral-rich fertiliser, Hauge said

"You kill three birds with one stone. The algae serve at once to filter out CO2 at industrial sites, to produce energy and for agriculture," he said.

Compared with the increasingly controversial first-generation biofuels made from food crops such as sunflowers, rapeseed, wheat and corn, micro algae have the huge advantage of not encroaching on agricultural land or affecting farm prices, and can be grown whenever there is sunlight.

They can also yield far more oil than other oleaginous plants grown on land.

"To cover US fuel needs with bio diesel extracted from the most efficient terrestrial plant, palm oil, it would be necessary to use 48 percent of the country's farmland," according to a recent study by the Oslo-based Centre for International Climate and Environmental Research.

"The United States could potentially replace all of its petrol-based automobile fuel by farming micro-algae on a surface corresponding to five per cent of the country's farmland," the study said.

As attractive as it may seem however, the algae solution remains in the conception phase, with researchers scrambling to figure out how to scale up the system to an industrial level.

Shell, for one, acknowledged on its website some "significant hurdles must be overcome before algae-based biofuel can be produced cost-effectively," especially the large amounts of water needed for the process.

In addition, further work is needed to identify which species of algae is the most effective.