KEY POINTS:
Prime Minister Helen Clark will today unveil new sales targets for biofuels requiring oil companies to pump the more environmentally friendly fuel into the country's vehicles.
She will also use her annual statement to Parliament to signal a push for government departments to lead efforts to fight climate change - with the ministerial car fleet in line for an overhaul.
The Government consulted on a proposed target for biofuel sales last year and is understood to be likely to announce a more ambitious "obligation" than was previously flagged.
In a discussion document, the Government last year proposed a sales target that would require BP, Caltex, Gull, Mobil and Shell to have biofuels make up 2.25 per cent of their total petrol and diesel sales annually from 2011.
But the Clark Government's heightened focus on climate change - and the Prime Minister's aspiration of a carbon neutral country - has driven a rethink of the targets.
Cabinet signed off the new targets yesterday and Helen Clark was keen to push the economic as well as environmental benefits that biofuels could bring.
"I think it has to happen," she said.
"Of course, it means people doing things a little differently from what they've done before, with respect to the blend of petrol and diesel that they provide.
"But I know this is a direction many other countries are going in."
She said a shift towards biofuels could reduce the country's reliance on oil imports and help the current account deficit.
The biofuels will be phased in and it is likely that oil companies will begin selling bioethanol and biodiesel blends.
Biodiesel can be used in most of today's diesel vehicles but the uptake of bioethanol is limited by the composition of the country's car fleet.
The age of most cars being imported from Japan means it could be a decade before the country begins importing used vehicles that are compatible with significantly higher biofuel blends.
But the Prime Minister appeared confident any problems that might arise during the phasing in of alternative fuels could be overcome.
"The advice we have is that what we're announcing is entirely feasible," she said.
Several major climate change policy proposals are now in the public domain for consultation but it will be some time before they are finalised.
As far as government departments go - heating, lighting and waste practices are likely to be scrutinised, and the chauffeur-driven ministerial fleet of Ford Fairlanes is likely to be replaced.
The Prime Minister, who is responsible for VIP transport, said last year that Internal Affairs was looking at replacing the Fairlanes.
Fuelling Up
* Biofuels that can be produced from, or are made up of, a renewable material or plant.
* Sugar cane and corn are being grown for use in biofuels.
* They can be substitutes or partial substitutes for fossil fuels, reducing greenhouse gas emissions.
* Legislation will be needed to get the Government's biofuels sales obligation up and running.
* Penalties for major oil companies that fail to meet the obligation could amount to tens of millions of dollars.
