A review of subsidy applications for new biofuel project grants has seen only two of 38 applications for sugar-based ethanol projects.

The Government last year set aside $37.6 million for one-off subsidies of 16 cents per litre, up to $10 million per project, and received 21 applications for biodiesel projects and 17 for ethanol, of which only the two were sugar-based.

The total investment value of the projects is around $1.1 billion with successful applicants to be announced in the middle of the year.

Sugar Research and Development Corporation chairman Bob Grange said the lack of interest in sugar based ethanol projects confirms industry fears that ethanol presented a false hope for the struggling sugar growers.