The government hopes to boost biomass fuel production for electricity generation with a new grant scheme for farmers, foresters and other producers in England.

Environment Minister Phil Woolas said the Bio-energy Infrastructure Scheme will offer individual grants of up to £200,000.

"We have to rethink our energy mix. We know biomass has the potential to considerably reduce our dependence on fossil fuels and cut our carbon emissions. UK producers are setting the standard and have shown production can be sustainable and our investment will support their commitment to this emerging industry.

The aim is help farmers, foresters and other producers to diversify and become part of the environmental industry sector which is currently worth more than £25bn and growing.

All projects must be based in England and must supply the biomass to end-users in Great Britain. Grants are available for up to a maximum of £200,000 per producer group or business.

Trees that could be suitable for grants include willow, poplar, alder, ash, sweet chestnut and sycamore. Other plants are switch-grass, reed canary grass, prairie cord grass, rye grass, straw as well as woodfuel from forestry and tree management.

Government figures show that biomass provides 3.5% of UK electricity and 0.6% of heat demand. Biomass could potentially supply 6% of UK electricity by 2020.