The NSW Government has announced that the State’s ethanol fuel mandate would increase from 2pc to 6pc within two years.

A 10pc ethanol blend would be included in some types of regular grade unleaded petrol by 2011.

NSW Farmers’ Association Business and Economics chair Susan McLeish says there is no doubt that Australia needs alternative fuel sources and liquid biofuels may well play an important role in this mix.

“This is especially the case in a year when a wet harvest has led to an oversupply of weather damaged grain, ideally suited to ethanol production,” Mrs McLeish said.

Under the new arrangements, consumers will continue to have the choice of which petrol they use, as both petrol containing ethanol and petrol not containing ethanol will still be available.

The association fully supports increased research and development into economically efficient alternative fuels.