PSA Peugeot Citroen is "pleased that the French government has recommended that biofuels represent 5.75% of the equivalent energy value of all motor fuels sold in the country by 2008, two years ahead of the European Commission's proposed 2010 deadline," the company said on Friday.

"It is clear, however, that this ambitious objective can be met only if biofuels are available at existing service stations and used in every vehicle now on the road," it added in a statement.

The company said it was "committed to a pragmatic biofuels policy tailored to each market."

Its current diesels can run on up to a 30% vegetable oil methylester/diesel blend, while its petrol engines can take up to a 10 % ethanol mixture without any modification.

PSA said another way to use biofuels is in cars equipped with E85 engines, which can run on any blend of petrol and up to 85 % ethanol.

This solution requires modified engines, and therefore the purchase of a new car, as well as the development of dedicated fuel distribution channels. As a result, bio-fuel use will increase only as the new cars replace existing models.

PSA Peugeot Citroën has extensive experience in technologies for flex-fuel engines. It is building and successfully marketing these engines in Brazil, where 80% of the line-up is sold with flex-fuel powertrains.

In Europe, the Group will be able to offer a wide array of Euro IV-compliant flex-fuel cars, with the first models coming to dealers by summer 2007.

They will be introduced in the different markets depending on demand and the availability of flex-fuel pumps in service stations.

Last week, Peugeot's vice-president of innovation and quality, Robert Peugeot, told a London press conference on diesel hybrid technology that the company's strategy was "Let's go to 10% or 30% first and then we'll go to flex fuel."

But he cautioned that not enough ethanol was yet available in Europe and some would have to be imported from Brazil.