Guatemala must introduce a subsidies program to develop its biodiesel industry at a time when producing the cleaner fuel has become increasingly competitive and costly in the Central American country, a leading industry executive said.

"Biodiesel is an emerging industry but it could become much bigger if the government introduced subsidies," said Luis Rodolfo Montes Osorio, general manager of Biocombustibles de Guatemala. A dearth of raw materials to make the fuel has made it virtually impossible to produce at competitive prices against diesel. "There isn't enough used oil or plant feedstock and when there is it's expensive as most of it goes to the food sector," Montes added.

Because of a tough market, Biocombustibles de Guatemala was forced to shut its biodiesel refinery last year and may not be able to re-open it until 2016 when it hopes plans to harvest jatropha curcas will bear fruit.

"We are working hard to develop and improve the crop but this could take 5-10 years," Montes said, adding that so far the company has 40 harvested hectares. "If the government helped, we could start producing biodiesel sooner."

Montes hopes a national election in November will usher a new administration with a more ambitious green agenda.

Guatemala has a small sugar-ethanol industry which also doesn't benefit from subsidies. There also isn't a renewable energy development scheme or target in place.

Other initiatives to build biodiesel are small, Montes added, with Pollo Campero (a major fast-food chain) recycling some of its oil to produce biodiesel for its vehicle fleet. Some government municipalities have also engaged in biodiesel production and promotional programs, Montes added.