A new government committee will evaluate potential biofuel projects aimed at expanding Prince Edward Island's renewable energy sources to cut the need for imported oil.

The new committee was recommended by the Environmental and Renewable Industries Committee, which delivered its final report to cabinet on Monday. It assessed the different types of biofuels and their general suitability for the Island.

Gordon Cobb, director of special projects with the Department of Development and Technology, says not all projects would have to go through the evaluation process.
 
"It depends on if you want something from government, really," said Cobb.

"If your project involved government investment or some form of government legislation or policy, this would be a structure to have your project evaluated at an early stage to see if it's viable economically and environmentally sustainable and contributes to developing renewable energy for the province."

The new committee has already started accepting project proposals.

Development Minister Richard Brown said cabinet has accepted all of the report's eight recommendations, which included government promotion of pilot projects as a way of leading by example.

"Cabinet concluded that the sustainable development of biofuels has the potential to diversify Prince Edward Island's energy mix, strengthen the Island economy, and help meet regional greenhouse gas emission reduction targets," said Brown in a statement.

"As well, biofuels may provide alternative sources of income for Island farmers. Given the current challenges of our agriculture industry, this is a positive opportunity for our producers."

The report is positive about the future of biodiesel on the Island, saying smaller plants could work and demand would be high. Biodiesel is typically used for heating, in bus and truck fleets as well as farm machinery.

The report outlines 14 current biofuels projects.

It was less favourable toward the future of ethanol, which would require a large-scale plant in order to be viable. In order for the province to support an ethanol plant, sugar beets would use up all of the Island's remaining farmland not currently in potato production, said the report.

Premier Robert Ghiz recently put the brakes on plans for an $85 million proposed ethanol plant for P.E.I. Ethanol is a gasoline additive made usually from corn or sugar beets.