FARMERS in North Yorkshire who grow crops for energy production could be hit by new Government guidelines, Selby's MP has warned.

John Grogan said changes to the amount of biofuels power stations can burn could damage farmers' livelihoods.

Energy producers, including Drax power station, near Selby, burn biofuel, a renewable fuel source, along with fossil fuels to cut the amount of carbon dioxide produced - a process called cofiring.

Electricity suppliers are currently allowed to make up 25 per cent of their renewable energy requirement from biofuels, also known as biomass.

But the government is set to slash that figure to ten per cent, cutting the amount of biofuel used in this way by nearly two-thirds, from April 1.

Mr Grogan said the move could "result in a reduction in the use of biomass, and a consequent rise in carbon dioxide emissions".

He said: "Investors would lose confidence and back away from the market, meaning there would be no encouragement for British farmers to invest in or plant crops which could aid in the development of a future sustainable energy crop market."

He has also set out an early day motion in the House of Commons calling on the Government to rethink the policy.

His warning was echoed by bosses at Drax, the biggest coal-fired power station

in Europe, which has successfully used biofuels.

Dorothy Thompson, chief executive of the Drax Group, said: "Our worry is that the potential to grow the energy crop market is actually being constrained to the detriment of the environment and the farming industry."

Many farmers in the area have diversified into growing crops, such as willow coppice, for burning in power stations as an alternative source of income.

Biofuel products include palm kernels, wood coppice, by-products of palm and olive oils, and sawdust pellets.

David Proudley, the National Farmers' Union's (NFU) biomass adviser,

said: "The NFU is concerned that the co-firing cap reduction could seriously undermine the biomass market and threaten the development of energy crops in the UK."

The new government guidelines are part of a move to force the power industry to invest in renewable energy sources.

But Mr Grogan said: "Cofiring is a green success story, but I think part of the problem is that it is not seen by some as being as pure as wind or wave power.

"The plain fact of the matter is, cofiring is reducing carbon emissions in the here and now rather than as part of some distant plan.

"The Government should be encouraging cofiring and I hope they will think again."

Updated: 11:19 Tuesday, January 31, 2006