The German automobile company is under the process of making this clear fuel through a scientific "power to liquid" process, masterminded by the German clean tech company and Audi partner Sunfire, CNN.com reported.

The automobile manufacturing company is using the most common greenhouse gas i.e. carbon dioxide by burning fossil fuels and then will recycle the gas to make a more efficient carbon-neutral fuel.

The researchers of Audi, first of all heat up steam over 800 degrees Celsius to break it down into hydrogen and oxygen and then they mix the hydrogen with carbon dioxide under pressure and at high temperature to create blue crude and lastly, the blue crude is refined into fuels in a similar way fossil crude oil is refined into gasoline.

Christian von Olshausen of Sunfire said that with the help of their e-diesel, that was successfully tested by German Education and Research minister Johanna Wanka, the engine would run quieter and would emit fewer pollutants.

Wanka said after the tests that if they come up with the widespread use of CO2 as a raw material in fuel then it would make a crucial contribution to climate protection and the efficient use of resources, and put the fundamentals of the green economy in place.

Sunfire will produce more than 3,000 liters of the "e-diesel" over the coming months and are aiming for a pre-tax price of 1.10 to 1.30 dollars per liter.