Up to £1 million in funding will be made available from 2022 to 2023 to support the testing, research and personnel costs of the flight, which will use 100% sustainable aviation fuel (SAF).
The competition is open to airlines, fuel producers, aircraft or engine manufacturers and fuel suppliers.
Mr Shapps, who made the announcement during a visit to the US, said: “This trailblazing net-zero emissions flight, a world first, will demonstrate the vital role that sustainable aviation fuel can play in decarbonising aviation in line with our ambitious net-zero targets.”
Current jet fuel specifications do not allow flights to use 100% SAF, meaning SAF use needs to be complemented by additional decarbonisation measures to be fully net-zero.
The Government said delivering the transatlantic flight would help accelerate the testing and approval of 100% SAF “to unlock the full decarbonisation potential of this technology”.
Tim Alderslade, chief executive of Airlines UK, said: “UK airlines strongly support the development of a UK SAF industry, which will play a vital role in helping our sector deliver net-zero emissions by 2050, as we are committed to doing.”