New generation biofuels seen in 2010 at earliest

HAMBURG (Reuters) - The first biofuels produced using new generations of biomass raw materials could be available in commercial volumes from 2010 at the earliest, German junior Environment Michael Mueller said on Monday.

But the exact time scale was still unclear, Mueller said at the European Biomass conference in Hamburg.

Germany is among the first European countries building test plants to produce commercial volumes of second generation biofuels from a wide range of biomass materials ranging from wood chips and other forest products to straw, hay, vegetable waste and low grade crops.

The first generation biofuels made from food crops such as grain, rapeseed oil and palm oil are used to produce biofuels to reduce use of fossil fuels and combat global warming. Commercial production dates for second generation fuels have been repeatedly postponed in Germany as new technology is developed. A production start as early as 2007 was hoped in the past.

"We do not believe this will take place before 2010," Mueller told a news conference at the start of the congress. "This was one reason why we cut our blending levels."

On June 18, Germany's parliament approved government proposals to cut the compulsory level of biofuels to be blended into fossil fuels this year to 5.25 percent from the 6.25 percent originally intended.

Germany's once-booming biodiesel industry, Europe's largest is working at about 60 percent of its 4.8 million ton annual capacity and has lobbied for the blending cut to be stopped.

Germany would focus future rises in its biofuel blending levels on progress in the production of second generation biofuels from biomass, Mueller said.

COMPLEX PROCESS