MOVES to force fuel companies to explore renewable energy sources were announced by the Government yesterday, boosting an emerging industry in the region.

Suppliers of vehicle fuel will have to ensure five per cent of sales come from renewable sources from 2010.

Five per cent of all road fuels supplied into the UK market should come from accredited renewable sources.

This will increase demand for green fuels such as biodiesel, which is produced from oilseed rape, and bioethanol, made by processing crops such as wheat, sugar beet and potatoes.

The move will boost Teesside-based renewable fuel companies Biofuels Corporation and D1 Oils, as well as farmers in the region.

Darlington farmer David Maughan, of the National Farmers' Union Regional combinable crops board, said: "I'm pleased the Government has listened and given the green light to home-grown green fuels. Britain's biofuels industry has been stuck in neutral for far too long.

"In the North-East, we grow more than a quarter of a million hectares of wheat, more than ten per cent of the country's sugar beet and more than 80,000 hectares of oilseed rape."

The Biofuels Corporation, which is in the final stages of commissioning the UK's largest biofuels plant in Teesside, welcomed the move, but said the target should be higher.

Chief executive Sean Sutcliffe said: "The announcement underlines the vital role biofuels will play in reducing carbon dioxide emissions and tackling the issue of climate change.

"We believe the target could be much higher and will work with the Government on determining future target levels."

l D1 Oils said last night it was planting more than 20,000 hectares of energy crops in Zambia and Swaziland.

D1's African subsidiary has been chosen to undertake large-scale planting of jatropha trees, which produce oil-bearing nuts, which can be processed into biodiesel.

The Stockton-based company has 20 staff on Teesside and about ten in London. It predicted that more than 100 people would eventually be employed on Teesside.