Fed: Delay in sugar package could hurt rural areas: Biofuels

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Fed: Delay in sugar package could hurt rural areas: Biofuels

CANBERRA, Aug 27 AAP - The government's delay in announcing a rescue package for thesugar industry could stymie $300 million in rural development, an alternative fuels companywarned today.

Australian Biofuels chief executive Trevor Bourne said his company was ready to goahead with $300 million in ethanol plants in regional areas.

But this would be lost if the government kept delaying the sugar package, which isexpected to include the mandated use of ethanol in fuel.

"By continuing to ignore ethanol, the federal government is in danger of squanderinga golden opportunity to help Australia's rural sector," Mr Bourne said in a statement.

"We have advanced plans to invest $300 million, roll out five ethanol plants aroundthe country and involve Australia's rural communities in an industry that is economicallyviable, will create rural jobs and help the environment.

"All we need is the federal government's support."

Cabinet is expected to sign off on a $100 million package for the industry, which issuffering from a corrupted world trading market, low prices, drought and disease.

A backbench committee has recommended that as part of a long-term package for the sugarindustry, all fuel contain 10 per cent ethanol by 2005 and 20 per cent by 2010.

Mr Bourne said Australia was up to 20 years behind the United States and Brazil inthe mandated use of ethanol which can be derived from both sugar cane and traditionalgrains.

AAP sw/was/de

KEYWORD: SUGAR BIOFUEL