The Bush administration has told Congress it recommends continuing federal government incentives for ethanol-fuelled vehicles even though the programme has neither reduced petrol consumption nor substantially increased alternative fuel use, the New York Times said.

The newspaper added that almost no vehicles built to run on either ethanol or gasoline actually use ethanol, in part because fewer than one in 1,000 of the nation's service stations sell it.

But just manufacturing the dual-fuel vehicles gives vehicle makers credits that allow them to lower the average fuel economy rating (CAFE) for the rest of their fleets, allowing them to sell more fuel-slurping sport utility vehicles, the New York Times said.

Citing the Bush administration report to Congress, the newspaper says that U.S. petrol consumption increased by 0.3 percent to 473 million gallons last year and that extra consumption will rise rapidly in the near future as more vehicles are produced under the law.

The New York Times said that burning petrol produces large quantities of carbon dioxide, a gas linked to global warming, and the 1988 law promoting ethanol use increased American emissions of global-warming gases by 1.46 million metric tons last year, according to the report.

This meant that the rule accounted for about a tenth of the increased output of such gases by American vehicles, which have become the fastest-growing source of global-warming gases, the newspaper added.

Rather than halt the programme, the report recommends that more be done to increase the amount of ethanol actually burned by the dual-fuel vehicles, although it offers few proposals on how to accomplish this, the New York Times said.

The newspaper noted that ethanol is most easily found in Midwest states where it is championed by politicians, lobbyists and farmers groups supporting the industry which produces the corn from which the fuel is made.

The New York Times said it obtained a copy of the report from an individual dissatisfied with the way the ethanol programme is progressing.

The newspaper noted that this was the second ethanol lobby victory in as many weeks.

Last week the Bush administration moved to deny the state of California's request for a waiver of regulations requiring that ethanol be used to produce clean-burning gasoline instead of other additives that are less expensive, the New York Times said.

Citing the report, the newspaper said that few consumers even know if they have bought a vehicle with the $US200 sensor for burning ethanol, for which vehicle makers do not charge extra.

General Motors, Ford and Chrysler have made 1.2 million dual-fuel vehicles, almost all of which are designed to burn either ethanol or gasoline. These include most Chrysler minivans and some Chevrolet S-10 pickups, Ford Taurus sedans and Ford Windstar minivans, the New York Times said.

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