But many industry players have been calling for direct incorporation of ethanol into fuel as only oil majors hold agreements to produce ETBE and can supply low volatility fuel necessary for such a mix.

"Ministers want intiatives involving direct incorporation of ethanol in fuels to start as soon as 2006 in order to perpetuate this sector," Loos said late on Monday, adding that a major operation based on the direct incorporation of 300,000 tonnes of fuel would kick off in early 2006.

French retailer Leclerc said on Monday its petrol distribution business, SIPLEC, was the first and only in France to directly incorporate ethanol to fuel.

Loos also said he wanted to raise limits on the use of biofuels at the European level as the 5.75 percent target is not compatible with the European norms which limit biofuel incorporation to 5 percent.

"We are tackling the problems head-on," Loos said at a press conference, after a meeting involving all the sectors participating in the biofuel industry, the industry and agriculture ministries, to promote partnerships.

NEW BIOFUELS

The biofuel industry meeting resulted in 15 commitments, including supporting the development of new biofuels.

"To reach the incorporation targets, all participants agreed that new biofuels should be encouraged," the industry ministry said in a press release.

This includes biodiesel made from oil derived from animal fats, biodiesel made from ethanol instead of methanol and biodiesel obtained through hydrotreating from vegetable oil and animal fats (synthesis biodiesel).

The industry ministry also said that the tender for 1.3 million tonnes of biodiesel will be open for those three new biofuels. "The tender will be published in the official journal in the next few days and we can expect results in January," an official said.