Motoring groups say drivers are steering clear of biofuels because of fears about fuel quality and the risk of invalidating their engine warranties.
The Road Transport Forum and Motor Trade Association say drivers risk voiding their warranties if they use a fuel made of more than 5% biofuel.
The MTA says modern engines are susceptible to damage if contaminated by poor quality biofuel.
It also says the quality of biofuel is variable because it is made from different materials.
However, Energy Minister Gerry Brownlee told Morning Report the Emissions Trading Scheme will create a demand for vehicles that can sustain bio-fuel blends.
