Saab Australia will soon be running a demonstration fleet of BioPower 9-5 vehicles running on E85 (85% ethanol 15% petrol) in Australia to help media, industry and government understand the benefits of ethanol and to stimulate serious debate about alternative fuels in Australia.

The announcement followed news that the automaker, operated 'down under' as part of local GM unit Holden, will launch diesel-powered 9-3 models there by the end of the year.

Director Saab Australia and New Zealand, Parveen Batish, said that, with a focus on fuel prices and the need for renewable energy, the time was right to start planning a BioPower roll-out in the market.

"Ethanol fuel makes sense in a country like Australia. It is a renewable, sustainable fuel - unlike fossil fuel," Batish said.

"You don't have to sacrifice performance, boot space or the environment to switch to an alternative to petrol."

Saab BioPower is a 'flex-fuel' vehicle, which means it can effectively run on 100% ethanol or 100% petrol or any combination, thanks to the advanced engine management system.

There is a local ethanol manufacturing industry in Australia.

Ethanol has been produced from sugar cane for many years in Brazil and also from corn in the mid-west of the United States. In Saab's native Sweden, it is produced from wood pulp and forest residues and feasibility studies for ethanol from lignocelluloses are currently being done.

As a fuel, the most important difference between petrol and ethanol is that ethanol does not add to global CO2 levels because it is actually 'recycling' CO2 that is already present in the atmosphere, Saab is telling Australians.

This is because CO2 is removed from the atmosphere through photosynthesis when crops are grown to be converted into ethanol fuel. It is then released - or returned - to the atmosphere during combustion when driving the car.

Brazil, which is currently the largest producer of ethanol in the world, produces and consumes ethanol with a net saving of fossil carbon dioxide between 80 and 90%.