The booming market of bio-fuels production projects in Eastern Europe has reached Bulgaria and has been creating a market worth hundreds of millions of euro.

A number of companies have already announced or realised projects for bio-fuel refineries construction in the territory of the country, Dnevnik daily reported.

Their total production capacity is expected to exceed 300 000 tons a year with the value of the investment projects exceeding 100 million euro.

Prospects for the bio-fuel industry development in Bulgaria are huge because of increased demand for bio-fuels in Europe, specialists said. The main stimulus for the increased interest in this industry was tax relief. European Union member countries will have to substitute 5.75 per cent of the total volume of mineral fuels used in transport with bio-fuels, as stated in EU directive 2003/30.

Another factor that will stimulate alternative fuels consumption is the sharp rise in the prices of gas and petrol in recent years.

Bulgaria is already working on several projects in the sector, one of which is a bio-diesel refinery in the town of Lovech. Its actual annual capacity is 20 000 tons of bio-diesel; this figure is expected to increase to 80 000 tons a year in 2007.

The largest bio-diesel production project so far is in Vidin and is worth 60 million euro. The plant's capacity will reach 200 000 tons a year and even more. The refinery will start operating in 2008.

Several other bio-diesel refineries will appear in Rousse, Provadia and the village of Gorna Malina near Sofia.