The federal government has been promoting biofuel use with a target of 350 million litres to be used nationally by 2010.

But National Party Senate leader, Ron Boswell, has called for much more action by setting compulsory levels for the use of renewable fuels.

“The development of a strong and vital ethanol industry is too valuable to Australia for it to be left to chance or at the mercy of the oil companies,” Boswell said yesterday.

“The Federal Government has a target of 350ML of biofuels by 2010 but there is no way that target can be met unless the Government does more."

In a submission to Prime Minister John Howard's biofuels taskforce, Boswell urged the adoption of an MRFT. This would specify a set amount oil companies would purchase at the wholesale level, but also give them discretion over distribution and marketing schemes.

Incoming Federal Nationals leader Mark Vaile is also a strong supporter of the biofuels industry, and the Queensland government and the ethanol industry have gone even further, calling for a mandatory 10% blend of ethanol with petrol.

But Boswell said a mandatory 10% would be impractical.

“Not all fuel will be required to be E10,” Boswell said.

"Motorists will continue to have choice. However with the appropriate marketing and advertising campaign, public demand for the cleaner fuel will soon overtake the required percentage purchases.

"This plan complements the government's existing support program and provides environmental benefits as well as surety for regional biofuels producers."

The proposal also requires Australia's four foreign-owned oil companies as well as independents to buy 0.25% of renewable fuel as a minimum amount from the national petrol and diesel pool.

"That would represent an increase of more than 50% over current fuel ethanol and biodiesel sales," Senator Boswell said.

"In consultation with industry, this level will ratchet up every year and incorporate the government's initial 2010 target of 350 million litres of biofuels."

That would see 1% of the fuel consumed in Australia be required to be renewable by 2010.

After that date, incremental annual production increases would see a 5% renewable target by 2018, then the European Union target of 5.75% renewable fuels by 2020.

"Renewable fuels are the way of the future, and a vibrant ethanol industry enables Australia to become a leader in the world's fuel market as well as a leader in the production of sugar and grains," Boswell said.

Ethanol is produced from grains and sugarcane byproducts.