THE rapidly-growing biofuels industry could be worth £1bn to the region's economy by 2027, according to a report.

The North East Biofuels Strategy highlights the opportunity for the region to become a major hub for the industry, capable of supplying the global market and attracting significant international investment.

The report identifies a number of potential opportunities, including the creation of a green technology investment fund to encourage businesses to set up in the region, the importance of a strong biofuels group to represent the industry, and strategic investment in research and development.

The strategy, commissioned by One NorthEast (One), forms part of the region's wider renewable energy aspirations outlined in the Regional Economic Strategy Action Plan, which was launched last week.

It will play a key role in meeting the recommendations of the Stern report into climate change that claimed the market for low carbon energy products is likely to rise from £38bn to more than £500bn by 2050.

Pat Ritchie, One's assistant chief executive for strategy, said: "The North-East is ideally placed to be a major player in the rapidly expanding biofuels industry and an over-arching vision of the strategy is to be internationally recognised as the biofuels hub.

"The combination of the region's strong rural sector and world-class chemical and petrochemical industries gives us a significant competitive advantage and means we can produce the entire biofuels process from seed to tank within the North-East."

Teesside has already emerged as the biofuels capital of the North, with firms including Ensus, D1 Oils and Biofuels Corporations investing hundreds of millions in new plants.

Stan Higgins, chief executive of the North East Process Industry Cluster, said: "Biofuels is one of many new products that our members are producing to help address global warming. The existing infrastructure of locations such as Teesside with its port, pipelines, storage facilities, transport and other utilities is clearly an advantage to projects.

"Several companies based in the region are already manufacturing bio-diesel, and there is a new breed of companies setting up to manufacture bio-ethanol that are helping the region become a world leading centre for the development of these new fuels.