LONDON - Biofuels could become a major revenue earner for Britain's arable farmers within 5-10 years, but much will depend on government support, a major study into the UK cereals sector concluded on Monday.
The independent review commissioned by the Home Grown Cereals Authority (HGCA), the country's chief grain marketing body, also said the grains industry itself needed do more to promote the alternative energy source.
"Without doubt, biofuels will be a key priority area for grains and oilseeds and it's important to acknowledge the development of the new markets that there will be," Mark Ireland, a member of the UK farmers' union and review panel, told reporters.
Biofuels, which can be made from processing crops like rapeseed, sugar and wheat for blending in transport fuel, are widely seen as a way of cutting pollution and boosting farm incomes.
However, government support for renewable fuels will be key for future growth, HGCA chairman John Page said.
"Ministers have to make up their mind how much they're behind renewable fuels in order for this to progress," Page said.
UK LAGS BEHIND
The UK lags behind the rest of Europe in biofuel output, with little more than 10,000 tonnes produced last year -- Germany and France produced more than 100,000 tonnes between them.
Britain was asked by the European Union earlier this year to respond to a proposed EU directive on biofuel use, which indicates that member states set an initial usage target of two percent, rising to 5.75 percent by 2010.
But industry analysts say lack of coordination between the Treasury (finance) and agriculture ministries has delayed a decision and this has hampered the industry's progress.
The cereal industry review said that if current planned legislation were enforced at an inclusion rate of two percent, some 700,000 tonnes of biofuels would be needed.
At present, less than 0.1 percent of transport fuel sales were made using biofuels, HGCA analyst Josh Dadd said. The report also recommended that there be a shift to producing crops for other uses.
"For many years, the non-food uses of vegetable oils focused on the oleochemicals industries, for example, use in detergents and cosmetics...(but) growing concerns about the environment, air pollution and health has encouraged the exploration of products such as lubricants, solvents and plastics," it said.
Story by David Cullen
REUTERS NEWS SERVICE
