Edinburgh-based Celtic has been awarded £11m to fund a new plant to make biofuels from Scotch whisky by-products.
The company has plans to open another three commercial plants across Scotland.
Advanced Plasma Power, in Swindon, will receive £11m to help develop biofuels from ordinary household waste.
Nova Pangaea Technologies, based in Tees Valley, will receive £3m to help make biofuels from forestry waste.
Transport minister Andrew Jones said: "This is a great example of the UK government’s commitment to innovative transport technology and supporting jobs and growth. Biofuels have an important role to play in keeping Britain moving forward in a sustainable and environmentally-friendly way.
"This £25m is not only a vital investment in technology that will help secure a greener future but will also help support the creation of thousands of jobs.
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By GlobalData"Advanced biofuels have the potential to save at least 60% of the greenhouse gas emissions from the equivalent fossil fuel. The three successful bids show how the government is investing in transport and making better, clean journeys."
The projects are expected to boost Scotland, the Northern Powerhouse and Wiltshire and the UK economy as a whole by generating over 5,000 new jobs by 2030.
It is also expected to open up international markets to promote the renewable energy sector in the biofuel industry.
