Mr Russell also highlighted the importance of consumer acceptance of these relatively new fuels.

"Awareness among motorists of biofuels is increasing and consumers usually continue to use the fuel once they have tried it"."

Studies conducted by BP have found that consumers respect the advice of auto clubs regarding biofuels above others.

Peter Anderton, from Agri Energy, told delegates that access to funds and investment will continue to be a key issue for biofuels producers.

"Biofuels will play a part in Australia's energy future, but investment in the industry is needed," Mr Anderton said.

In addition to a 100 million litre ethanol facility at Swan Hill, Agri Energy has plans to construct plants at a range of locations around Australia, using a variety of feedstocks.

Mr Anderton said that the use of higher yield, lower cost feedstocks in Australia will contribute to securing the biofuels industry"s needs in the future.

Professor Peter Sharp of the University of Sydney agreed that new technologies will need to be developed to ensure greater industry productivity and feedstock security.

Professor Sharp is conducting research into growing mustard seed for biodiesel production.

"Mustard is deep rooted so it has additional benefits of soil improvement," Professor Sharp said.

In addition to feedstock diversification, Professor Sharp highlighted the potential of using feedstock waste, such as cereal stalks, to supplement the quantity of biomass available for ethanol production.