All filling stations in Cornwall should sell fuel based on vegetable oils says the renewable energy agency for the South west.
Alternative fuel is being sold on a limited scale in Plymouth
Regen South West wants the Department of Transport to make all oil companies provide at least 5% of their fuel from plants.
It says such a development would be of particular benefit to the rural economy which relies on agriculture.
It says producing such fuels from crops is not technically difficult.
The agency is calling on the government to strengthen its policy and force oil companies to make bio diesel available on filling stations across the country.
It says there are a number of companies in the South West which plan to produce bioethanol and bio diesel, including firms in Plymouth and St Austell.
But Regen says they are waiting for the government to make it a more feasible option.