In addition to the new carbon rewards, the government also said that from April 2011 biofuels would receive incentives only if certain sustainability targets were met.

"We are one of the first countries to develop a detailed methodology to allow transport fuel suppliers to report in detail on the carbon and sustainability impact of their biofuels," transport minister Douglas Alexander said.

Some industry players welcomed the government's move to set a timeframe for the carbon and sustainability schemes, although others said the start dates were unrealistic.

"The emphasis on carbon reporting and sustainability has to be the correct approach to establishing the credibility of biofuels to the UK consumer," said Andy Hunter, chief executive of British biofuels producer Argent Energy.

Others questioned whether there would be sufficient reliable data in place by 2010 to give a true measure of carbon savings.

"The industry has made it clear that we need the certainty of clear timeframes," said Clare Wenner, head of transport fuels for the Renewable Energy Association.

"Carbon incentives can only be effective when they are based on real data obtained through practical experience.

"Many are fearful that the aggressive timescales suggested by the government today will simply present an incentive for inaccurate and erroneous reporting.

"This would be an environmental own-goal," she added.

Green groups said the measures did not go far enough.