Toymaker Lego said on Wednesday it was on track to replace the fossil fuels used in making its signature bricks with more expensive renewable and recycled plastic by 2032, after signing deals with producers to secure long-term supply.

Lego, which sells billions of plastic bricks annually, has tested over 600 different materials to develop a new material that would completely replace its oil-based brick by 2030, but with limited success.

Now, Lego is aiming to gradually bring down the oil content in its bricks by paying up to 70% more for certified renewable resin, the raw plastic used to manufacture the bricks, in an attempt to encourage manufacturers to boost production.

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According to CEO Niels Christiansen, this will significantly increase the cost of producing a Lego brick.

The move comes amid a surplus of cheap virgin plastic, driven by major oil companies' investments in petrochemicals. Plastics are projected to drive new oil demand in the next few decades.

Lego's suppliers are using bio-waste such as cooking oil, or food industry waste fat, as well as recycled materials to replace virgin fossil fuels in plastic production.

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The market for recycled or renewable plastic is still in its infancy, partly because most available feedstock is used for subsidized biodiesel, which is mixed into transportation fuels.

According to Neste, the world's largest producer of renewable feedstocks, fossil-based plastic is about half or a third of the price of sustainable options.

Around 90% of all plastic is made from virgin fossil fuels, according to lobby group PlasticsEurope.

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(Production: Jacob Gronholt-Pedersen, Tom Little, Ilze Filks)