FARMERS in North Yorkshire and the North-East are ideally placed to jump into the biodiesel market - and last week they were advised not to look at their oilseed rape fields as a break crop but as an "onshore oil field".

About 200 farmers attended a biodiesel conference held by Farmway at the Scotch Corner Hotel on Wednesday of last week.

"In our trading area we have an ideal location to grow oilseed rape; indeed, some of the best yields are grown in this region," said John Reynolds, conference chairman.

The infrastructure already existed and Teesside, where a world class biodiesel plant was planned, was on the doorstep.

"Other companies are also looking at alternative fuels on Teesside," he said. "We have a deep-water port, which means we can export from here, and get other vegetable oils to ensure a year-round supply."

Farmway was instrumental in establishing the North-East Biodiesel Consortium, representing each link in the production chain. Members include Farmway, East Durham Biofuels, Terra, Agrovista, Sembcorp, Simon Storage, Petroplus, Teesside Chemical Initiative, One North-East and Tees Valley Regeneration.

Dominic Vincent, Terra Nitrogen contracts manager, said the North-East and Yorkshire had ideal growing conditions. "We can achieve the highest quality, efficiency and yields," he said, "Some people in Europe look at us jealously because we can produce it at a lower cost and more efficiently than they can."

But he urged the Government to act swiftly to help the industry develop. Many European countries were well ahead with biodiesel production; further delays would make it difficult for this country to catch up.

He, and other speakers, said CAP reform provided a good opportunity for farmers to develop non-food energy markets.

There were political demands and targets set for reducing carbon dioxide and CO2 emissions. Europe wanted 1990 CO2 figures cut by 20pc by 2010. Last year's Government White Paper demanded a 60pc reduction by 2050.

A 95:5 blend of biodiesel would reduce carbon dioxide emissions by 4-5pc.

On Teesside, Petroplus is already producing biofuels which are being used commercially.

Mr Vincent said a 5pc blend would need 75,000t of biodiesel - the equivalent of 180,000t of rapeseed from 45,000ha.

"A study for us by Newcastle University shows it could all be obtained in a stretch from Northumberland to South Yorkshire," he said.

The Biofuels Corporation planned to build a 250,000t-a- year biodiesel plant at the mouth of the Tees. "They will need a secure and consistent supply of raw material," said Mr Vincent.

He spoke of the lobbying of Government for more help to get the industry off the ground and of work with regional development agencies.

It was Mr Vincent who advised farmers not to look at their oilseed rape as a break crop but as an on-shore oil field.

Stephen Thomason is marketing director for Teesside-based Petroplus, the UK's leading marketer of biodiesel. The company produces a 95:5 blend, Bio-Plus. Its own vehicles run on it and successful trials are being held with local authorities and bus companies.

"We are working within the North-East to develop a regional biodiesel industry," he said. "We can do it, but we are very, very dependent on Government policy. We would like to see a North-East industry. We want to see crops grown in the North-East used to make road fuel in the North-East."

Each speaker stressed the importance of all involved in the production chain working together.

Rad Thomas, chairman of NFU alternative crops, said the NFU vision was for 20pc of all of Europe's agricultural land to be devoted to non-food energy crops. Government and treasury lobbying was aimed at creating a sustainable biofuels industry.

He said the autumn statement gave some encouragement, adding: "The next budget will possibly be the real crunch one."

David Clayton, head of agri-industrial materials with Defra, said biofuels had recently attracted a lot of activity across Whitehall. "Climate change is the main driver," he said. "The UK is not on target for its CO2 reductions, which is where I think there is an opportunity for biodiesel crops."

The key would be the biofuels directive, due out next month. It would look at current and likely sales, future Government support, and targets.

Government departments initially thought biofuels were too expensive but were now keen to use them for energy and heating. "Biodiesel is no more expensive than wind energy and a third less than hydrogen," said Mr Clayton.

It would help the Government tremendously if the industry agreed a common way forward.