At least 10,000 new jobs would be created in the UK countryside in the next two years if the fledgling "green fuel" industry gets off the ground, according to the NFU.

Growing wheat, sugar and rape to turn into "bio-fuels" to power the country's vehicles could help to offset many of the 60,000 job losses in the farming industry in recent years, the NFU believes.

But the much-needed boost to the rural economy depends on the Government providing the tax relief necessary to encourage the investment required to develop the emerging industry to its full potential.

The thousands of rural jobs would be created in crop production, the construction of new plant and machinery, and the operation of processing facilities for the new fuel with the potential for many more in future years.

To make bio-fuels more competitive at filling stations, NFU Alternative Crop Uses Chairman Rad Thomas has been lobbying for 30p per litre tax relief on all liquid bio-fuels in next month's pre-Budget statement instead of the current 20ppl, which is not even available for all bio-fuels.

In other EU countries such as Germany and France, the state levies little or no duty on bio-fuels.

Fuel companies are most likely to blend the new green fuel with traditional petrol and diesel supplies. Customers at the pump would notice no difference in the fuel they purchase.

Mr Thomas said: "Literally thousands of desperately-needed jobs could be created if this new industry takes off.

"We are not saying this is a panacea, but the production of bio-fuels could be a major factor in turning around the current rural economic crisis, not forgetting the major environmental benefits.

"The Government must grasp the opportunity it has in the pre-Budget statement to help this fledgling industry become a mainstream fuel provider."

Rapeseed oil can be chemically altered to produce bio-diesel while sugary or starchy crops like wheat can be fermented and distilled into bio-ethanol. The NFU believes the bio-fuel industry could meet over 5% of the UK's road fuel needs. The use of bio-fuels instead of carbon fuels saves about 50% of carbon emissions.

www.nfu.org.uk