Unlike food exporters such as the United States, Japan is short of farm produce.

But Abe pledged shortly after taking office in September to intensify use of biomass in motor fuels, in line with a global shift toward non-fossil fuels to help slow global warming.

Tuesday's report called for work on ethanol technology and adjustments in distribution and other infrastructure.

It also proposed a possible change in taxation to encourage production and usage of ethanol, a key renewable fuel to reduce Japan's dependence on imported gasoline.

In the fiscal year ended in March 2006 Japan produced only 30 kl of ethanol at government-backed pilot plants.

Diesel production from domestic biomass by municipal governments and other regional organisations was higher, totalling some 4,000 to 5,000 kl a year.

The 6 million kl a year target included biomass diesel output worth 100,000 to 200,000 kl ethanol equivalent a year. The remaining 5.8 to 5.9 million kl a year is to be provided by locally produced ethanol.

The report recommended reducing costs to produce ethanol from wood waste and mass-produced grains to 100 yen (US$0.830) per litre by 2020.

While newly developed super-harvest grains like rice, sorghum and sweet potato can be planted in abandoned fields to increase output per hectare, production costs still look high.

An academic estimate showed that based on current prices it would cost up to 500 yen per litre, including some 50 yen of gasoline tax, to produce ethanol from rice grown domestically for feed use.

Importing ethanol from Brazil, the world's largest exporter, costs Japan about 70 yen per litre.

Japan is under pressure to meet its goal under the Kyoto Protocol to cut its greenhouse emissions by 6 percent from 1990 levels by the 2008-2012 period.

To achieve that, the government has decided to replace about 500,000 kl a year of gasoline for auto use with biofuels, either locally produced or imported, by fiscal 2010/11.