Though the cost of bio-fuel production (mostly ethanol and bio-diesel) is still higher than that of conventional fossil fuels, according to the International Energy Agency global production of bio-fuels is expected to grow by 5.9 million barrels a day annually by 2030, at an average rate of approximately 8.6 percent per year. This dramatic growth rate is attributable to advanced legislation in various countries such as the US, EU, Japan, India, Brazil and Korea that has mandated a predetermined minimal market share solely for bio-fuels. The purpose of this legislation is to create an economic “bubble” that would maintain the financial viability of bio-fuels in comparison with conventional fossil fuels, while encouraging competition within the bio-fuel sector itself.But why this obvious preference of bio-fuels over other renewable energy sources such as solar or wind?Unlike other renewable energy sources whose availability varies uncontrollably as a function of weather conditions (such as sunlight hours, wind speed and so on), bio-fuels are ready-to-use, storable energy units that can be produced and utilized at will. Furthermore, since they are basically organic equivalents to fossil fuels, bio-fuels can be used within the existing electric and transportation infrastructures. While electric cars running on solar or wind energy might replace a certain percentage of conventional combustion engine automobiles, even with the enormous advancements expected to take place in the battery industry, no one is predicting the near future development of a battery both powerful and small enough to support a Boeing 747 traveling from New York to London.Dr. Isaac Berzin is the director ofthe institute for renewable energy policy at the Lauder School ofGovernment, Diplomacy and Strategy at the Interdisciplinary Center,Herzliya. In 2008 he was named one of the most influential people inpolitics, business and science by Time magazine. Tamar Israeli is aresearch associate at the institute.New markets for bio-fuels are being mandated by energy and environmental policy makers around the world, since they are understood to be the only truly reliable renewable energy source that has the potential to adequately answer energy security concerns.However, production of first generation bio-fuels (mainly from corn, sugar cane and palm oils) created a link between high and volatile energy prices and global food prices. In a world where more than a billion people go to sleep hungry every night, tying the price of basic food staples to the price of crude oil enhanced neither energy security nor food security. Furthermore recent studies suggest that due to deforestation encouraged by the expanding need for cultivated land, combined with intense fertilizer and heavy machinery use, first generation bio-fuels might actually increase greenhouse gas emissions.For these reasons, the most recent legislation in the field sets strict demands that future bio-fuels be produced from sources that do not require much fertile land, drinking water or other limited resources that are needed for food and feed production, and that their full life cycle greenhouse gas emissions be substantially less than existing fuels..LAST NOVEMBER, a special report issued by the Organization for Economic Cooperation and Development praised Israel’s remarkable agricultural achievements. According to the report, Israel had taken advantage of its natural resource constraints and R&D capabilities to become one of the world’s leading forces in desert agriculture. The combination of the country’s advancement in desert agriculture, its renowned innovative technological development capabilities, and the new, stringent greenhouse gas limitations on bio-fuel production gives it a major head start in the race to develop new sustainable sources for bio-fuel production that could help place it at the forefront of this quickly expanding market. It is crucial that the Israeli government act now, in order to maintain this advantage. For our current head start will soon be lost, as other countries such as the US, China and India along with private sector giants such as Exxon Mobil, Chevron and BP pour vast amounts of capital into bio-fuel R&D.Whether by stimulants for production, tax incentives or grants for further research in promising technologies, the government must encourage local actors to enter the field of bio-fuels. Promoting the development of sustainable and economically viable bio-fuels that can serve as fossil fuel substitutes, holds great potential for lifting the economy while taking the first step toward global freedom from oil dependency.