"We have a car plant ... and we have the oranges," Esteban Gonzalez, head of planning and housing for the regional government, told a conference on climate change. The region grows 4 million tonnes of oranges a year and its existing five juice plants produce 240,000 tonnes of waste that could be turned into ethanol.
With another new juice plant planned, waste output will rise to 500,000 tonnes, Gonzalez said.
"Experience in California shows that would be enough to produce 37.5 million litres of bioethanol," he added.
Mixing plant-based ethanol with regular petrol is a means of reducing emissions of carbon dioxide (CO2), the main greenhouse gas responsible for global warming.
Spain, with the rest of the European Union, has a goal of replacing almost 6 percent of transport fuel with bioethanol or oilseed-based biodiesel by 2010 as part of its efforts to curb climate change.
Gonzalez said the region wanted to back an orange-to-ethanol project and would pay for a distribution network for the ethanol produced if the private sector failed to do so.
He did not say how far the Valencia government had gone in discussing the plan with Ford which has a large car production plant at Almusafes on the Valencia coast.