THE Government urgently needs a clear and well-defined sustainable fuels policy with financial incentives to boost the use of biofuels, according to the Society of Motor Manufacturers and Traders.

With biodiesel costing 4p more per litre than diesel, Christopher Macgowan, SMMT chief executive, said: “There is no current incentive to stimulate consumer demand. The industry can deliver the technology, but it is up to government to give a clear lead for the future.

“Unless government increases fuel duty differentials, biofuels will never be seen as a long-term alternative.”

Confusing messages are hampering the industry's desire to make progress and SMMT wants clarification on where biofuels policy sits in government thinking.

Vehicles are already capable of using biofuels in a blend of up to five per cent, which removes the need for new investment in infrastructure.