The government has made the first step towards biofuels, announcing that it will work towards a legal requirement for blended fuel. This would involve blending biodiesel (from animal tallow) or ethanol (from whey or biomass) into the fuel supply; currently we can support a 5% blend of biodiesel, but do not produce sufficient ethanol. However, that will change, the government's public commitment to blended fuel will hopefully spur the market to produce what is required.
This is good news. Blended fuel will not only reduce our reliance on imported oil (and hence our balance of payments deficit); it will also reduce our net greenhouse emissions and make it that much easier to reach our Kyoto target. It will also establish the infrastructure and market, and allow us to progressively move towards a greater mix of biofuels as necessary.