The National Farmers’ Union (NFU) has branded the new Renewable Energy Directive by the European Parliament a “fantastic opportunity for British agriculture”.

The directive will introduce mandatory targets requiring the EU to meet 20 per cent of energy use and 10 per cent of transport energy from renewable sources by 2020.

NFU president Peter Kendall said: “This directive represents a fantastic opportunity for British agriculture and will put in place long-term market signals for renewables in Europe, as well as opening up enormous new market potential for farmers in the UK with the increased uptake of biomass for energy and renewable fuels.

“British agriculture can play a key role in energy security by delivering the sustainable biomass for energy and transport fuels needed to help meet the targets. This shows the important role that farmers can play as part of the solution to climate change.

“This directive also provides security and confidence for companies already constructing biofuel plants, as well as offering real investment opportunities for the future,” he said.

Transport fuel giant Ensus will open Europe’s largest bioethanol plant on Teesside this summer. Chief executive Alwyn Hughes said: “This is very positive news. It provides long-term encouragement to companies like ours who are investing in this vital new industry to combat climate change.

“We welcome the distinction between good and bad biofuels and the new mandatory sustainability criteria to which we and most European producers already conform. The Ensus plant will produce biofuels from the UK and will meet the new mandatory standards for greenhouse gas savings and sustainability to be put in place,” he said.

Only biofuels that contribute significant greenhouse gas savings will count towards the target (35 per cent rising to 50 per cent from 2017 for existing plants, 60 per cent for new installations operating post 2017).