This is part of the government's Renewable Transport Fuel Obligation, which requires 5 per cent of all the fuel sold on UK forecourts to come from biofuels by 2010.

This should equate to a saving of 1million tones of carbon a year, the equivalent of taking a million cars off the road.

In addition to the consultation, the Secretary of State announced that from April 2010 the government aims to reward biofuels under the RTFO according to the amount of carbon they save.

From April 2011 the government aims to reward biofuels under the RTFO only if they meet appropriate sustainability standards.

Alexander said: "We are one of the first countries to develop a detailed methodology to allow transport fuel suppliers to report on the carbon and sustainability impacts of their biofuels.

“The comprehensive package of new measures we are proposing strengthens this global leadership role, by making clear our determination to put in place a mandatory sustainability framework for biofuels.”