Move over, algae! There’s a new slime in town that’s being mass produced as a cleaner burning fuel — the same pink, slimy filler that McDonald’s puts in its hamburgers.

Before we get to the gooey stuff, let’s hit up a quick refresher on the progress of algae. This news item from Wired.com’s Danger Room underscores positive momentum for the green stuff, in the form of the U.S. military ordering 450,000 gallons of biofuel, half of which is algae-based.

Here’s more on the deal:

The $12-million purchase, expected for months, will all be used this summer off the coast of Hawaii. There, supersonic F/A-18 jets will launch from the deck of an aircraft carrier, powered by fuels fermented from algae. A 9,000-ton destroyer and a cruiser will join it on a voyage across the Pacific, using fuel made from fats and greases. (The carrier itself runs on nuclear power.) It’ll be the first demonstration of the so-called “Great Green Fleet” — an entire aircraft-carrier strike group relying on alternative energy sources.

An interesting part of the deal is that two different companies are handling the order. Solazyme uses algae to ferment plant matter and municipal waste into fuel. Dynamic Fuels, half-owned by agribusiness giant Tyson Foods, converts fats and waste greases into biofuels. See video below, these fats and waste greases are actually the same pink slime that gets soaked in ammonia before turning into fast-food hamburger filler.

According to a recent Forbes report, McDonald’s says it will quit using pink slime. Which means Tyson stands to benefit, potentially charging more for its pink slime-powered biofuel instead of pink slime food filler. Tyson said it is now selling “millions of gallons of animal-fat-based diesel to Norfolk Southern railroad to power freight trains.”

Here’s more from Forbes on the versatility of the fuel:

The diesel they make is what’s known as a “drop-in” fuel — meaning you can use it as a direct substitute for regular diesel. Plus, it’s higher quality, with cetane levels as high as 88. Cetane is the equivalent of octane in gasoline; the higher cetane, the more evenly and more powerfully the fuel combusts.

But let’s not get too excited. Many hurdles remain in the biofuels industry. In fact, the remainder of the Forbes report is rather sobering, pointing out how biofuel maker Syntroleum “is still losing money” and that “turning a profit will require expanding the scale and convincing buyers to pay a premium for a better fuel.”

The U.S. military is more than willing to pay a premium to run greener and cleaner. So what will it take for wider production and adoption (pink slime or otherwise) to occur across the globe?

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