Programme aims to leverage up to €100m of private funds for innovative clean energy technologies.
The UK government has committed £10m to a European scheme designed to encourage the development of innovative bioenergy projects.
The catchily-titled ERA-NET Plus BESTF scheme is supported by a coalition of eight European nations, contributing a total of €47m in public money to industry led-projects from 2014.
It is expected to stimulate up to €100m of industry-led bioenergy projects across the partner countries, which comprise the UK, Finland, Sweden, Germany, Spain, Denmark, Switzerland, and Portugal.
Eligible technologies include biogas, bio-energy generation, and biofuel production systems, which will all be able to apply for funding.
The Department of Energy and Climate Change (DECC) is set to commit up to £6m to the scheme over the next two to three years, with the government-backed Technology Strategy Board and Biotechnology and Biological Sciences Research Council (BBSRC) together contributing a further £4m.
UK Energy Minister John Hayes said the government is keen to "make the most" of bioenergy technology.
"Bioenergy has an important role to play in our energy mix, helping cut carbon as well as support jobs and spur on economic growth on a national and international scale," he said in a statement.
"Britain has been the global engine room of innovation for centuries. I want to see that rich tradition continue in the energy sector."
The funding comes as scientists warned producing biofuels could actually contribute to air pollution, potentially causing 1,400 premature deaths in Europe by 2020, costing society over $7bn.
A paper published in the journal Nature Climate Change says some trees used as sources of renewable wood, such as poplar, willow or eucalyptus, emit high levels of the chemical isoprene as they grow. This chemical can form the toxic substance ozone when mixed with other pollutants in sunlight.
Nick Hewitt, a researcher at Lancaster University who worked on the study, told news agency Reuters that isoprene mixed with other pollutants could also damage crop yields.
The study suggests the effects could be mitigated by developing biofuel plantations away from population centres or using genetic engineering to reduce isoprene emissions.