Engineered bacteria could make fuel from sunlight as a step toward replacing fossil fuels as raw materials for the chemical industry, U.S. researchers say.

Chemists at the University of California, Davis, say they have engineered blue-green algae to grow chemical precursors for fuels and plastics.

"Most chemical feed stocks come from petroleum and natural gas, and we need other sources," chemistry Professor Shota Atsumi said in UC Davis release Monday.

Photosynthesis forms carbon-carbon bonds using carbon dioxide as a raw material for reactions powered by sunlight, and cyanobacteria, also known as "blue-green algae," have been doing it for more than 3 billion years, the researchers said.

Using cyanobacteria to grow chemicals does not compete with food needs, in the way that corn is needed for the creation of ethanol, they said.

The challenge is to get cyanobacteria to create significant amounts of chemicals that can be readily converted to chemical feed stocks, and in the UC Davis experiments cyanobacteria after three weeks of growth yielded 2.4 grams of 2,3 butanediol per liter of growth medium, the highest productivity yet achieved for chemicals grown by cyanobacteria.

That represents a potential for commercial development, Atsumi said, noting the U.S. Department of Energy has set a goal of obtaining a quarter of industrial chemicals from biological processes by 2025.