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Making whisky requires three ingredients - water, yeast and a grain, primarily barley. But 90 per cent of the output consists of waste by-products

Whisky-making can be a wasteful business.

More than 1.6 billion litres of pot ale, and half a million metric tonnes of 'draff' are produced as by-products each year - and the majority is thrown away.

Now a firm in Scotland wants to put this waste to good use to power our cars, feed our animals and even make plastics.

Edinburgh-based Celtic Renewables was formed in 2011.

It has spent the past three years refining its recycling process based on a century-old fermentation technique, and is now taking the next step toward a commercial plant, according to the American Chemical Society.

Making whisky requires three ingredients - water, yeast and a grain, primarily barley.

But only 10 per cent of the output is alcohol that can be sold. 

The main waste products include a residual solid called draff, and a yeast-based liquid known as pot ale.

Pot all is the copper-containing liquid created by the stills, and draff is made up of used barley grains.

This waste is spread on agricultural lands, turned into low-grade animal feed or discarded into the sea.

Rather than inefficiently re-using these materials or letting them go to waste, Celtic Renewables has taken an old industrial process developed to turn molasses and other sugars into chemicals, and fine-tuned it to convert draff and pot ale into acetone, biobutanol and ethanol.

The latter two can be used as fuel.

The company is scaling up its process with the help of the U.K. Department of Energy and Climate Change, private funds, and Bio Base Europe.

And if all goes to plan, a commercial facility could be next.

The company is initially focused on developing biobutanol - a next generation biofuel that has almost the same energy value as petrol and gasoline.

The main waste products include a residual solid called draff, and a yeast-based liquid known as pot ale. Celtic Renewables has taken an industrial process developed to turn molasses and other sugars into chemicals, and fine-tuned it to convert these products (pictured) into acetone, biobutanol and ethanol

Following the successful fermentation of the draff and pot ale (distillery pictured) to create biobutanol, the solid residue left is separated to produce animal feed. Celtic Renewables said the feed has a high protein and is 'ideal for the cattle and dairy cow feed markets'

These types of fuels also produce 25 per cent more energy per unit volume than bioethanol, a fuel created from agricultural feed.

It is easier to store, is less corrosive, and safer to handle than bioethanol, and works in unmodified engines with petrol. It can also be blended with diesel and biodiesel.

Biobutanol was legally recognised as a biofuel in the 2009 amendment to the Road Transport Fuel Obligation. 

This is the UK implementation of the EU Renewable Energy Directive, which dictates that 5 per cent of the UK's transport fuel comes from a renewable source by 2013, and 10 per cent by 2020.

Following the successful fermentation of the draff and pot ale to create biobutanol, the solid residue left is separated to produce animal feed.

Celtic Renewables said the feed has a high protein and is 'ideal for the cattle and dairy cow feed markets.'

The process also produces acetone, a widely-used chemical and solvent.

The UK depends on imports of acetone, from the EU and, in particular Spain, Belgium, Netherlands and Germany.

In 2008, 164,000 tonnes were imported at a cost of almost £100 million.

About half of world's acetone is used to make acrylic plastics such as Perspex. It is also the starting point for other plastics such as epoxy resins and polycarbonates.

The technology was developed by the Biofuel Research Centre at Edinburgh Napier University by Professor Martin Tangney and his team.

The research was completed in 2010.