The fuel - which went on sale at three filling stations in and around the city on Thursday - is also claimed to improve engine performance.

Manufacturer Rix Petroleum, which is based in Hull, is the first UK firm to produce biodiesel for sale to non-commercial motorists.

It said it hoped to expand the experiment to the rest of the country.

We think everybody wants to be environmentally friendly but often in the past there has been a price barrier

Peter Turner, Rix Petroleum

The oil is made from a mixture of 95% ordinary diesel and 5% from reclaimed food oil.

Rix director Peter Turner said the government's decision to reduce tax by 20p on bio-diesel meant the fuel was now cost-effective.

He said: "It is more environmentally friendly - emissions are much less, it is renewable and is bio-degradable.

"It also increases the lubricity of the fuel, which improves engine performance and the number of miles that can be done to the gallon."

He added: "We think everybody wants to be environmentally-friendly, but often in the past there has been a price barrier.

"Now, in this case, there is no increase in cost. We are confident it will prove to be a success."

The Green Shop garage, near Stroud, Gloucestershire, became the first UK garage to sell biodiesel in July 2002.

It was sourced from Canadian energy company Greenenergy.