Renault is entering the European bioethanol (E85) market with new derivatives of its C-segment Mégane line and French buyers of the first cars will be given tax incentives.

The new 105hp, 1.6-litre, 16-valve, E85-compatible engine will be offered in Mégane hatchback and estate cars (wagons), from the Authentique trim level upwards.

Prices start at EUR18,550 for the hatchback and EUR19,150 for the Sport Tourer (wagon), a premium of only EUR200 more than for the standard petrol versions.

The first cars will be sold in France late this month after dealer order books opened on 11 June.

The existing 1.6 16v petrol engine underwent a number of modifications so that it could adapt automatically to the type of fuel.

Main upgrades were to the fuel tank, injection system and combustion chamber. The new vehicles were developed with input from expertise developed in Brazil, where Renault has been selling FlexFuel versions of its B-segment Clio and the Mégane, running on bioethanol E100, since 2004.

The new releases can be considered against a backdrop of French tax incentives for 'clean' vehicles, with full exemption from company car tax over eight quarters for passenger cars registered after January 2007, and partial or total exemption (depending on the region) from regional vehicle registration taxes for cars running on bioethanol E85.

Renault said it considers biofuels to be one of the most effective solutions in the long-term quest for control over CO2 emissions. They are seen as ecologically effective, as a diversified, renewable, plant-based energy source. They also are economically effective because the cost of developing compatible engines is reasonable, and the cars therefore affordable. Biofuels will also be helping to cut down energy dependency on fossil fuels.

Bioethanol is made by distilling fermented vegetable matter, typically in the form of wheat or beet in Europe, sugar cane in Brazil, or maize in the USA.

The resulting fuel is then mixed with petrol in varying proportions: 5% for E5, 10% for E10, 85% for E85, and up to 100% for the Hi-Flex Clio 1.6 16v sold in Brazil.