Queensland is hoping to stitch up a deal to provide the US Navy with biofuel.
The US Navy is trialling biofuels in its aircraft and ships, and wants half its fuel to come from alternative sources by 2020.
Premier Anna Bligh is in Washington for a biotechnology convention and says Queensland is well placed to bid for the future business.
President Barack Obama has directed the US Navy and the Department of Energy to work with the private sector to create advanced biofuels capable of powering jet fighters and landing craft, as well as trucks and commercial airliners.
Ms Bligh said the navy would use its purchasing power to stimulate the private sector to produce suitable grade biofuels in larger and larger quantities.
She said Queensland planned to be front and centre in the race for the lucrative business, and was already investing heavily in biofuels research and development.
"Queensland is a big sugar producer and the state is well placed with a number of research institutions working in the biofuels area," she said.
"There is an opportunity for Queensland to lead the way working with the US Navy in the development of next stage (demonstration-scale) commercial production of biofuels."