Audi has created a so-called 'green' diesel fuel made using a combination of water and carbon dioxide. The car manufacturer described its breakthrough as the 'fuel of the future' and claims it could provide a carbon neutral way of powering vehicles. Experts used renewable energy to convert carbon dioxide and water into a form of crude oil known as 'blue crude', which was then refined into diesel. Scroll down for video . Audi claims to have created the fuel of the future - diesel (shown above) made from water and carbon dioxide. Experts used renewable energy to convert the carbon dioxide and water into a form of crude oil known as 'blue crude', which was then refined into diesel . Tests have shown it can be mixed with diesel from fossil fuels, or used as a fuel in its own right. Audi has already begun using the new e-diesel to power the official car of German minister of education and research Dr Johanna Wanka. Reiner Mangold, head of sustainable product development at Audi, said: 'In developing Audi e-diesel we are promoting another fuel based on carbon dioxide that will allow long‑distance mobility with virtually no impact on the climate. Audi's fuel was developed with Sunfire, a Dresden-based energy technology company. To make the fuel, water is first heated to form steam which is then broken down into its constituent hydrogen and oxygen using high-temperature electrolysis. By performing this process at temperatures above 800°C (1,472°F), the water breaks down with greater efficiency than at room temperature. The hydrogen is then pumped into a reactor with carbon dioxide at high pressure and high temperatures. This causes them to react to produce long-chained liquid hydrocarbons. Hydrocarbons are the basic building block of all fossil fuels, but the compounds produced in the reactor are known as 'blue crude'. Audi claims the whole process can be powered using renewable energy and can be achieved with an efficiency of around 70%. The blue crude can then be refined in a similar way to standard crude oil to produce e-diesel. 'Using carbon dioxide as a raw material represents an opportunity not just for the automotive industry in Germany, but also to transfer the principle to other sectors and countries.' The new fuel was developed by Audi along with Sunfire, a Dresden-based energy technology company. To make the fuel, water is first heated to form steam, which is then broken down into its constituent hydrogen and oxygen using high-temperature electrolysis. By performing this process at temperatures above 800°C (1,472°F), the water breaks down with greater efficiency than at room temperature. The hydrogen  is then pumped into a reactor with carbon dioxide at high pressure and high temperatures. This causes them to react to produce long-chained liquid hydrocarbons. Hydrocarbons are the basic building block of all fossil fuels but the compounds produced in the reactor are known as 'blue crude'. Audi claims the whole process can be powered using renewable energy and can be achieved with an efficiency of around 70 per cent. The blue crude can then be refined in a similar way to standard crude oil to produce e-diesel. Water is heated to form steam, which is broken down into hydrogen and oxygen using  electrolysis. Hydrogen is  pumped into a reactor with carbon dioxide at high pressure and high temperatures and causes them to react to produce liquid hydrocarbons, known as 'blue crude'. Hydrocarbons form the base of fossil fuels . Audi added that the synthetic fuel does not contain sulphur or hydrocarbon rings – known as aromatic hydrocarbons – which are found in crude oil and can create additional pollution. A breakthrough was recently made in the development of clean hydrogen power. Currently, while hydrogen fuel is appealing, the production of hydrogen is incredible difficult - requiring huge amounts of energy. But the researchers say they have made a new material that can generate hydrogen from water, meaning it is less reliant on fossil fuels. Researchers at the University of Bath and Yale University have designed a molecular catalyst to split water in an electrolyser and create clean and storable hydrogen fuel. The approach increases the efficiency of electrolysis of water into its constituent parts by reducing the amount of energy needed to perform the  oxidation half of the reaction. Christian von Olshausen, chief technology officer at Sunfire, said the fuel was highly combustible and produced less pollution than traditional diesel. He said: 'The engine runs quieter and fewer pollutants are being created.' A special processing plant has been built in Dresden Reick and is set to produce 3,000 litres of e-diesel in the coming months. The carbon dioxide is currently supplied by a biogas facility as a byproduct. Audi said it also extracts carbon dioxide from the ambient air using 'direct air capturing'. Burning of fossil fuels is the main source of carbon dioxide emissions by humans into the atmosphere and is driving global warming. By capturing emissions from power plants and removing it from the air, Audi says its new fuel can be used without adding to the burden of gas in the atmosphere. The project is the latest attempt by Audi to produce more environmentally friendly fuels for its vehicles. Audi has already begun using the new e-diesel to power the official car of German minister of education and research Dr Johanna Wanka. The minister is pictured testing the new fuel in her official car . In 2009 it announced a project to produce e-gas - a form of synthetic methane – for use in its g-tron gas powered vehicles. At the launch of the new e-diesel, Dr Wanka put five litres of the fuel into her official Audi A8. She said: 'This synthetic diesel, made using carbon dioxide, is a huge success for our sustainability research. 'If we can make widespread use of carbon dioxide as a raw material, we will make a crucial contribution to climate protection and the efficient use of resources, and put the fundamentals of the "green economy" in place.'
German car manufacturer used renewable energy to convert carbon dioxide and water into 'blue crude' oil which was then refined into diesel . The carbon dioxide can be removed from the air or from power plants . Audi claims its e-diesel is carbon neutral without adding to climate change . Tests suggest it allows cars to run quieter and produce fewer pollutants .