The European Commission has published a plan, being discussed by EU ministers, to boost biomass production and develop the EU's biofuels market.

Many questions remain to be answered, especially how much the EU might depend on imports. Although the biofuels debate is still in its early stages, several countries are worried about the potential impact on their agricultural production.

Expanding the EU's supply of raw materials, including forestry products, is seen as crucial to the strategy and might lead to some agricultural policy changes to ensure that enough cereals, sugar beet and underused alternatives are available.

Several states, including France, Belgium and Italy, are keen to see high import tariffs so that the EU can produce much of its own biomass and not depend too much on buying ethanol from Brazil, the world's leading producer of the fuel.

"On imports, there's a clear split between the countries. This remains the most contentious issue," an EU official told reporters following an EU agriculture ministers’ debate on future biofuels policy.

Two camps of EU countries had emerged that saw the way to boost EU biofuels use in different ways: those happy to see a reasonably high level of imports, and those that wanted to encourage domestic biofuels production, he said.

France suggested redefining the technical specifications of some of the EU's customs product codes to specify the agricultural origin of products like ethanol. In practice, this would target countries like Brazil which makes ethanol from sugar cane, not beet - the raw material used by EU producers.

"They (France) would like to make an assessment of the (customs) nomenclature," the official said. "So if imports (ethanol) were to be needed, we would set temporary quotas to be reviewed according to EU demand."

PRICE CONCERNS

At the same time, other countries like Spain and Portugal have voiced concern over the impact that higher EU production of biofuels might have on market prices for cereals and oilseeds.

The EU makes 10 percent of the world's ethanol, using around 1.2 million tonnes of cereals and 1.0 million of sugar beet in 2004: the equivalent of 0.4 and 0.8 percent of the bloc's overall cereals and sugar output respectively. The EU, which is the world's leading producer of biodiesel, used slightly more than 20 percent of its oilseeds production in 2004 to turn out 4.1 million tonnes of the fuel.

Many of the EU's newest joiners said they want to benefit from a special subsidy for so-called energy crops that only the countries in the old EU-15 get at present, since it was agreed as part of the EU's mammoth farm reform in 2003.

The subsidy, known as the "carbon credit" premium, is worth 45 euros ($53.73) per hectare of land sown to crops destined for non-food purposes. It applies up to a ceiling of 1.5 million hectares, an area that many EU governments want to see increased.