Scientists obtained the fuel using the US Naval Research Laboratory (NRL)'s gas-to-liquid technology, which involved removing carbon dioxide from water at 92 per cent efficiency while simultaneously producing hydrogen.
The CO2 and hydrogen gases were then converted into a liquid hydrocarbon fuel, using a metal catalyst in a separate reactor system, 'Gizmag' reported.
That fuel was used to power an RC model P-51 Mustang's unmodified two-stroke engine in a proof-of-concept test performed September last year at Blossom Point, Maryland.
The event marked the first time that the fuel had been used in a conventional combustion engine, the report said.
"This is the first time technology of this nature has been demonstrated with the potential for transition, from the laboratory, to full-scale commercial implementation," said Dr Heather Willauer, NRL research chemist.
Researchers are now working on upscaling the system to a commercial scale.
Apart from its use in fuel production, the CO2 could also have applications in the fields of horticulture or aquaculture, NRL said.