US aircraft maker Boeing has set up a facility with a Chinese firm to transform waste cooking oil -- the source of repeated food safety scandals -- into jet fuel, it said Wednesday.

Boeing and the Commercial Aircraft Corp. of China (COMAC) have set up a plant in the eastern city of Hangzhou to convert "gutter oil", a Chinese term for used cooking oil, according to a statement.

A series of scandals involving "gutter oil" being re-used for human consumption has featured in Chinese media.

The two companies estimate that waste oil in China could yield 1.8 billion litres (500 million gallons) of biofuel annually.

"Sustainably produced biofuel... is expected to play a key role in supporting aviation's growth while meeting environmental goals," the statement said.

China is a key market for Boeing, which estimates China will need 6,020 new airplanes valued at $870 billion through 2033.

COMAC is the country's main commercial aircraft company, and could eventually compete with the US firm. It is building a regional jet and narrow body airliner, the C919.

Boeing rival Airbus and Chinese energy giant Sinopec said in 2012 that they would also develop renewable aviation fuel production for regular commercial use in China.