Scientific development in producing ethanol has led to calls for a major investment in new forests to provide future fuel needs.
A process called ligno-cellulosic conversion has been developed by scientists to produce ethanol for cars from wood plants such as radiata pine trees.
The chief executive of the Crown Research Institute, Scion, Tom Richardson, says the technology will be cost effective within five years with demonstration plants in Europe and North America already forging the way.
Mr Richardson says New Zealand needs to make itself an attractive location for full-scale bio-ethanol production plants.
He says a million hectares of new forest planted over the next 30 years would supply 40% of the nation's transport fuels.