Biofuel start-up companies and promoters of micro-energy systems could be heading the queue for a share of the $100 million Budget fund to deal with rising energy prices and global warming.

The Government maintained its silence yesterday on how it intended distributing the cash, with Energy Minister David Parker's office saying it was busy implementing a new national efficiency and conservation strategy and could not discuss details.

It has said only that greater emphasis is needed on the production of energy from renewable resources.

That is music to the ears for research and science agencies such as Niwa (National Institute of Water and Atmospheric Research) and the Royal Society of New Zealand, an independent academy of sciences, that are investigating energy fuel alternatives.

But the Forest Owners Association, whose members account for annual export earnings of $3.6 billion, is not counting on much relief, saying $100 million is small fry when it is facing a potential $2 billion deficit in meeting Kyoto Protocol obligations.

Chief executive David Rhodes said the association would like to see a significant part of the new fund directed to "creating the right environment" in forestry.

"If climate change is here to stay and because we (the government) have ratified Kyoto then things are going to have to change."

Labour ratified Kyoto on the potential of hundreds of millions of dollars of carbon credits but, last year, admitted to an error in its calculations - meaning the country would have a big carbon deficit.

Niwa general manager atmosphere Murray Poulter predicted his entity could be among those knocking on the fund's door.

"When we talk about energy, people tend to think big, like power stations. In future, we will be needing to look at micro things. When we say wind, people think about big windmills. What about one on your house roof? You might [also] have cells on your roof for solar energy and you might produce a surplus."

Poulter said several houses with a surplus could create a virtual power station.

The fund could also be tapped for development of alternative transport fuels from crops.

Royal Society senior policy analyst Jez Weston said companies were being formed to produce biofuels from crops and they would be tapping the fund.

Weston, who oversees the society's oil studies energy panel, said biofuel research was at an early stage, but for New Zealand, as vulnerable to fossil fuel reliance as the US, the prospects for a new crop industry were good.