Waste cooking oil will be collected from households and restaurants to produce the biodiesel required to fuel the vehicles. The higher cost of biodiesel will also be absorbed by state-run Chinese Petroleum Corp., Taiwan (CPC) and the private sector's Formosa Petrochemical Corp.
The mandate is expected to cut Taiwan's diesel consumption by 38.5 million litres a year, equivalent to about 1 million barrels of imported crude oil.
The Taiwanese government decided to roll out an island-wide biodiesel programme after a successful biodiesel trial in several parts of the island. More than 500 buses have been running on 2-5% biodiesel fuel blend in Kaohsiung City and Chiayi County in southern Taiwan since January 2007.