Coke and arch rival PepsiCo Inc are in a race to use greener packaging, a challenge for carbonated beverages that put a lot of pressure on the walls of bottles.

Coke, the world's largest maker of non-alcoholic drinks, said it signed agreements with three biotechnology companies -- Gevo Inc, Virent and Avantium -- to create plant-based plastic on a global scale so Coke can use it in bottles for drinks from its trademark cola to Dasani water.

The bottles should roll out in the next few years, a Coke executive said.

In 2009, Coke introduced a plastic bottle that was up to 30 per cent plant-based. It has since distributed more than 10 billion of the bottles in 20 countries.

Coke's goal is to satisfy all of its non-recycled plastic needs with plant-based plastic by 2020.

Over the summer, PepsiCo introduced bottles for its 7UP brand in Canada made from 100 per cent plant-based material.

Virent, a start-up company that produces both fuel and plastics feedstocks, said it would pick a site for a manufacturing plant next year and is targeting 2015 for first production of plant-based paraxylene that will be used in the Coke bottles.

That planned factory will be capable of producing 30,000 tons per year of paraxylene, enough for about 4 billion bottles.

"At the price of crude oil today, we are able to compete with oil-based paraxylene now," Virent Chief Executive Lee Edwards told Reuters.

Coke shares were up 60 cents, or nearly 1 percent, to US$66.86 in afternoon trade.

Gevo shares were up 86 cents, or 15 per cent, to US$6.50.

- Reuters