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At 95p a litre, it has to be the cheapest forecourt diesel in the country. But the secret of one tiny garage's bargain price is not tax evasion or dodgy accountancy. It's all thanks to fish and chips. The business turns used cooking oil from fast food restaurants into biodiesel capable of running cars safely and efficiently. It is sold from a single pump and the steady stream of regular and grateful customers all swear by its reliability.

Demand at the garage outside York has pushed prices up in recent weeks to 94.9p a litre, but that's still about 35p less than traditional diesel. As word spreads about the garage's location, demand increases. The business can no longer make enough biodiesel to cope. Its phones are red hot from hauliers asking about supplies and it has cut opening times from six days to 'two or three days a week' to ensure it does not run out. It does not need any free advertising. When the Mail visited the company yesterday the manageress was distraught about the implications of national publicity.

'It's a nightmare at the moment, we just can't cope with demand as it is,' said Sally.

'The phone is constantly ringing and as you can see we are very busy with customers who already know us. We definitely don't need any more people turning up.'

They keep their cheap diesel as secret as possible, relying on word of mouth and a single sign showing the price, which is partially obscured from view by a hedge. The company has collected used cooking oil for 20 years and until recent years cleaned it up and sold it on for industrial use.

Now it sells about 60,000 litres of biodiesel a month to motorists. Vans tour the region collecting used cooking oil from fish and chip shops, cafes, restaurants, hotels and schools. The oil is free as they are effectively providing a waste collection service to caterers. Back at the site near York, which looks more like a farmyard than a garage or business, the oil is put into a large tank and filtered to remove bits of food.

A Northamptonshire man destroyed his garage and badly injured himself at the weekend while attempting to make biodiesel from used cooking oil. A devastating explosion levelled the makeshift reprocessing plant on Saturday afternoon, when sparks from an electric drill being used to mix ingredients ignited explosive vapours. Firemen hastened to deal with the smoking wreckage, in Middleton Cheney, and the unnamed thrifty motorist was airlifted to hospital with 20 per cent burns.

"Firefighters would like to urge members of the public to take extreme caution if undertaking such chemical mixtures in their own homes," said a statement from the Oxfordshire fire brigade, quoted by the BBC.

The injured biodiesel fancier reportedly made motor fuel from used cooking oil obtained from his local Chinese takeaway. Such oil can often be used in diesel vehicles without preparation, but this will typically knacker the engine in short order. It is normal to treat the oil with alcohol and other ingredients before use, and this process was apparently underway when the mishap occurred.  The explosion would most probably have been caused initially by alcohol fumes building up in the garage, a process likely enhanced by the hot weather this weekend. Open-air - or at least better-ventilated - biodiesel manufacture might have been wiser.

Home biofuel making is legal and tax-free to the amount of 2,500 litres per annum. With so much of the pump price of fuel being duty, such an effort is becoming more and more worthwhile to motorists as fuel costs soar.

You may not have noticed, but Britain’s green fields are turning yellow. Look out of your car window a few years from now and all you’ll see is acre upon acre of golden oilseed rape. These are the 21st century’s oilfields. Farmers will become the new oil barons as climate change and diminishing oil supplies turn plants into the environmentally friendly wonder fuel.

This is the vision of the biofuels lobby, until recently dismissed as being as far-fetched as El Dorado. But the biofuels solution to eco-motoring is gradually becoming a reality.

While hybrid petrol-electric motors such as the Toyota Prius hog the headlines, many believe the environmental benefits of hybrids have been overplayed. And the holy grail of clean motoring — the hydrogen fuel cell — is at least 20 years away from becoming a commercial reality.

This, according to the British Association for Biofuels and Oils (Babfo), leaves biofuels as the only current viable solution to cutting carbon dioxide emissions.

There are two types of biofuel: biodiesel made from plant oils and bioethanol made by fermenting grains. These can be used in unmodified diesel and petrol engines respectively when blended with conventional diesel and petrol. The vast majority of biofuels on sale in Britain actually include no more than 5% biodiesel or bioethanol to 95% conventional fuel, in compliance with British and European Union approved standards.

Most manufacturers argue higher concentrations would damage conventional engines, although critics point out that they are used elsewhere — in the United States, for example, where blends are usually 10% bioethanol. With minor modification engines can be converted to run on even higher concentrations of biofuel and a handful of independent garages currently sell 100% biodiesel — about nine around the UK, according to www.biodieselfillingstations.co.uk — and claim most diesel cars can run on it without alteration. The price per litre is about 89p: comparable with the price of conventional diesel.

“For the next 50 years at least, biofuels are likely to be the most effective alternative to fossil fuels,” says Peter Clery, chairman of Babfo.

British sales of biodiesel, although still a fraction of traditional fuels, more than doubled between April 2004 and May 2005 — up from less than 1.5m litres per month to almost 3m litres, according to Department for Transport figures. Sales of bioethanol reached 7.8m litres in the same month, up from virtually nothing and boosted by the introduction of a 20p tax rebate (biodiesel has had one since 2002) at the beginning of the year.

The number of garage forecourts stocking the fuel is also rising. Tesco is leading the way among petrol retailers — of its 381 fuel stations, more than half have replaced conventional unleaded petrol with petrol that includes 5% bioethanol.

“We hope to have bioethanol included in all our unleaded petrol within the next few years,” said a Tesco spokesman. “We can sell it for the same price as conventional unleaded so there was no reason not to take the green option.” Tesco also has 23 stations offering a 5% biodiesel blend.

Car makers too are being converted. Earlier this summer Saab launched its first flexible-fuel model, a version of the Saab 9-5 that can handle bioethanol concentrations of up to 85% as well as pure petrol. The car is currently only on sale in Sweden but Saab hopes to take British orders early next year. A flexible-fuel version of the Ford Focus will be available next April. Right now the dream of a clean biofuel future remains just that. But as the momentum of government, petrol companies and motorists builds behind it, Clery’s vision appears increasingly plausible. “Every field in Britain could become a potential oilfield,” he says.