A cross-industry group is urging the government to show a greater commitment to the use of biofuel in UK transport.

The consortium, made up of the NFU and Morrisons as well as Saab Great Britain Limited and the Ford Motor Company, presented a letter to the Treasury urging the Chancellor to include financial incentives to develop the biofuel industry in his 2007 budget.

It also set out the key benefits of biofuel to the UK industry, such as the potential to substantially reducing carbon dioxide emissions from road transport and improve fuel security by reducing the UK’s economic reliance on fossil fuels. It also suggested the demand for biofuel could create new markets for agriculture in growing renewable-energy crops, providing a boost to the rural economy.

According to the NFU, the current Renewable Transport Fuels Obligation (RTFO) will largely be met by blending five per cent biofuels with fossil fuels for use in conventionally fuelled vehicles. However, the group have called on the government to demonstrate its commitment to the UK biofuel industry by announcing as soon as possible the RTFO targets for post-2010 ¬- the year they are due to be reviewed.

NFU president Peter Kendall said: “We want to see the growth of higher blend biofuels which have the potential to allow the UK to make dramatic improvements to our environmental footprint.“The way to tackle the issues surrounding climate change is to include farmers as part of the solution - we are more than ready and able to rise to the challenges of providing renewable energy. But we need firm commitment from Government to push this new industry forward and create a sustainable market.”

The letter also recognised the need to encourage consumers to change their habits and called for specific announcements in the 2007 budget to increase and prolong the fuel duty rebate applied to bioethanol E85; discount company car tax for high blend biofuel cars; and revise vehicle excise duty to reflect more accurately the substantial environmental benefits of these cars.

Both Ford and Saab currently manufacture cars sold in the UK capable of running on high blend biofuels. And according to an NFU statement, Morrisons is the only UK fuel retailers to sell bioethanol E85, which is currently available on 13 of its forecourts.