“We’ve set a target that we think we can reach,” Costello told Macquarie Radio.

“We’d be very happy if we exceeded it, but that’s a target to encourage people to think about alternative fuels.

“My advice is that by 2010 we should be able to make it.”

But the Government’s target of 350 million litres of biofuels by 2010 would amount to just 0.7% of all fuel used in Australia, which is seen by many Queensland politicians as being too modest a target.

The Queensland Government has been pushing the development of an ethanol industry as a way of providing cleaner fuels while helping the state’s struggling sugar sector.

Twelve months ago, the state had 49 service stations selling ethanol-blended fuels. Today it has 131.

Queensland’s Labor Premier Peter Beattie has said neither the Federal Government nor the Opposition were doing enough to drive the development of the ethanol industry across Australia.

Beattie said both sides of Federal politics were failing to push a national mandate for ethanol-petrol blends.

On the other side of politics, Queensland National Party Senator Barnaby Joyce is calling for the use of ethanol in Australian petrol supplies to be mandated.

But senior Nationals politicians, party leader and Trade Minister Mark Vaile and Agriculture Minister Peter McGauran yesterday ruled out the introduction of mandatory standards for ethanol use in petrol blends.

Costello said the Government had done enough to give incentives for biofuels production.

“We’re trying to give a tax holiday to the domestic industry as against petrol and as against any imported ethanol for over 10 years,” he said.