The country's biggest biofuel producer is aiming to double the area of oil seed rape crops, as it increases biodiesel production to meet the growing demand.
Biodiesel New Zealand, a subsidiary of state-owned enterprise Solid Energy, expects to produce about 1.8 million litres of fuel for the year.
Distribution is still limited to the South Island, where it is used by a wide range of commercial operators including transport, tourism and construction companies, to run vehicles, machinery and fishing boats.
Most of the biodiesel production is still coming from recycled cooking oil but Biodiesel NZ commercial agriculture manager Grant McDonald says the aim is to increase the amount produced from oil seed rape grown on farms from Manawatu to Southland.
Mr McDonald says Biodiesel New Zealand is offering growers $700 a tonne contracts for autumn-sown crops for the next season.