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The Federal Government will spend $15 million on second generation biofuels research and development.
Under the new program businesses and institutions researching second generation biofuels are now able to apply for grants of between $1 million and $5 million.
Second generation biofuels use fuel stocks such as biomass and algae rather than grain or other livestock feed.
Their development is seen as a crucial cog in moving beyond the 'food versus fuel' debate.
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