Caltex Australia (ASX:CTX) today launched a high ethanol-based fuel designed for use in Holden's VE Series II Commodore flex-fuel vehicles to be released later this year.

Consisting of up to 85 per cent ethanol and 15 per cent petrol, Bio E-Flex will help to reduce greenhouse gas emissions and the nation's reliance on traditional fossil fuels like petrol.

"Biofuels such as ethanol are fuels of the future as they are produced from renewable sources and can significantly reduce greenhouse gas emissions," said Caltex Australia Manager Government Affairs & Media Frank Topham.

"This move by Caltex is an important step in the development of a first generation biofuels market in Australia and will help pave the way for sustainable, lower cost second generation biofuels in the future."

"Bio E-Flex is part of our strategy to provide transport fuels beyond the traditional fuel mix, reflecting our commitment to addressing the issues of climate change and energy security," Mr Topham said.

With the addition of Bio E-Flex, Caltex will be offering its customer a wide range of alternative fuels that also includes Bio E10 Unleaded, a range of biodiesel blends and LPG autogas, the company said.

Bio E-Flex is the result of a partnership with Holden which will later this year launch Australia's first locally produced passenger vehicles capable of using a high ethanol blend fuel, the Commodore VE Series II flex-fuel range.

Caltex's Bio E-Flex will be Holden's recommended fuel and the new vehicles will also be able to use Bio E10 Unleaded, Vortex 95, Vortex 98, or any combination of these fuels.

"We welcome the leadership shown by the Victorian Government and our partner Holden," Mr Topham said. "Important steps have been taken towards the development of a biofuels industry in Victoria, and we thank Minister Allan for her support and participation in our event today."

Caltex will start selling Bio E-Flex in Melbourne in September and will have Bio E-Flex available in more than 30 service stations in Melbourne, Sydney, Brisbane, Adelaide and Canberra by the end of October, increasing to 100 metropolitan and regional locations in 2011.

Bio E-Flex is suitable only for flex-fuel vehicles, such as vehicles in the Holden Commodore VE Series II range. Most new and many older cars, SUVs and light commercial vehicles can use E10 which is available at about 400 Caltex service stations in NSW, the ACT and Queensland, the company said.