BP Plc is testing two advanced biofuels that could be commercially available by 2014, said Philip New, chief executive officer of the U.K. petroleum company's biofuels unit.

The company is planting energy grasses to feed a 36 million gallon-a-year cellulosic ethanol plant planned in Florida, he said in an interview in London today. A demonstration biobutanol plant in Hull, England, is operating, New said. A bioethanol plant in the same location should be producing by the end of this year, he said.

Biofuels could account for 9 percent of global transport fuels used by 2030, up from 3 percent now, according to BP. Drivers include climate-change targets in the U.S. and Europe, energy security concerns and the possibility the fuels may be a lucrative crop for ailing rural communities, New said.

“If you believe that demand for transport fuels is going to grow significantly, if you believe that for the foreseeable future we’re going to carry on using internal combustion engines and liquid fuels, then biofuels are going to be the only complement to crude oil that’s out there,” he said.

Cellulosic ethanol uses micro-organisms to break down fibrous plants, making it possible to produce fuel from energy grasses. Unlike sugar cane, which flourishes around the equator, the grasses can be grown anywhere.

Biobutanol is produced by fermenting plant sugars and can be blended with gasoline at higher concentrations. Existing bioethanol can be retrofitted to produce biobutanol, New said. Biobutanol is a type of alcohol that’s used as a fuel.

BP is looking at sites in Texas, Florida and Louisiana where it could farm energy grasses and build new plants, he said. The company is targeting a cost of $60 to $80 a barrel by 2024 from $140 to $150 a barrel today, New said.

The two fuels and a new sugar-to-diesel product will be trialled in 100 vehicles during the London Olympic Games.

Copyright 2012 Bloomberg