Researchers have come up with a fuel blend of diesel and water which they hope will be used by all Wellington public buses by the start of the Rugby World Cup next year.
A team at Wellington Institute of Technology and a private partner have created a blend made with up to 15% water, based on similar fuels used in Europe.
The mix is made by shearing water and diesel together in high-speed machines.
The researchers say it can reduce nitrous oxide emissions by 10% to 30% and particulate emissions by up to 60%.
They say the blend is stable and works well in existing engines.