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Wang Zongyi, a Chinese taxi driver, has to calculate his driving cost every day as oil prices keep hiking amid worldwide fear of a energy shortage.

However, the technology of extracting diesel oil from plants and waste oil that is being developed in China might assuage Wang.

Breakthroughs have been made in biological diesel oil and the industrialization of this "green" and cheap fuel, Wang Tao, an academician with the Chinese Academy of Engineering (CAE), said at China's first academic conference on forestry held recently in this capital city of east China's Zhejiang Province.

A number of institutions in China have claimed successes in experimenting with producing the special diesel oil from rape oil, soybean oil, rice brans and various wild plants, which are considered substitutes to fossil materials such as coal and oil.

A bio-diesel production base with an annual output capacity of 10,000 tons in south China's Hainan Province has also developed the biological diesel oil products. Experts confirmed the quality of its products "is up to the US's standards" and applicable to many types of diesel engines.

More efforts have been called on to improve the research and effective utilization of the clean fuel as "it will help narrow the gap between supply and demand in China", said Min Enze, another CAE academician.

Biological diesel oil is not only a solution to the fuel shortage, it is both effective and environment-friendly, experts say.

"It smells good, just like the cooking oil," said Wang Li after driving a trial tractor for about 1 kilometer. The vehicle was powered by diesel oil made from rape.

The technology was the second achievement by the Chinese Academy of Agricultural Sciences (CAAS) after the success of extracting diesel oil from waste oil.

Based on the two technologies, the CAAS is preparing for the establishment of a production base with a designed annual capacity of 50,000 tons, said Huang Fenghong, who is in charge of the research program.

Bio-diesel is more lubricative than common diesel oil and could reduce pollutant emission by 90 percent, experts said.

It is estimated that up to 40 percent of the world's energy consumption will rely on bio-fuel by 2015, mainly through the industrialization of biological electricity generation and liquid fuels.

The International Energy Agency (IEA) said Wednesday that world energy demand will grow by 50 percent by 2030, two thirds of which will come from developing countries.

According to official figures, China consumed 290 million tons of oil in 2004, up 15 percent from the previous year; and its oil imports jumped nearly 31.9 percent year-on-year to 120 million tons last year.

It is predicted that China's oil demand may surge to 300 million tons by 2010.

China is rich in resources for the development of renewable energy, including small hydropower stations and power generation by wind, solar energy and biological energy, said Gu Xiulian, vice chairperson of the Standing Committee of the National People's Congress (NPC).

China boasts 53 million hectares of afforested areas and 54 million hectares of barren mountains and lands -- a tremendous potential for the growing of bio-fuel plants, according to Jiang Zehui, president with the Chinese Academy of Forestry Sciences.

China has made up its mind to develop oil alternatives and renewable energies such as wind power, solar energy and biological fuels during its 11th Five-Year (2006-2010) Plan period.

Although the renewable energy sector is still in an early stage of development, the Chinese government has worked out substantial measures to assist its sound development.

The Law on Renewable Energy, which was approved by the NPC Standing Committee in February, will go into effect on January 1, 2006 to create a legal environment for the sustainable development for the fledgling industry.