The Department of Energy and Climate Change (DECC) is inviting businesses in the bio-energy sector to support the development of a new funding scheme designed to tap the potential of wetland areas to provide a sustainable source of biomass.

The department announced yesterday that it is engaging in "early market engagement" to see if there is a case for a new competition designed to "encourage the use of biomass arisings from ongoing wetland management activities for bio-energy".

Advocates of using wetlands to provide biomass for conversion into biofuel or energy argue that the approach limits the impact of energy crops on food production.

Moreover, as the government notes in its new proposals, wetlands already produce large amounts of waste biomass, such as reeds, rushes, grasses and ferns, that are harvested for habitat conservation purposes but have few applications.

"By developing an efficient process for harvesting and conversion of biomass arisings into bio-energy DECC aim to address the requirement for increased provision of sustainable bio-energy feed-stocks whilst avoiding conflicts with land use change and food production activities," the department said in a statement.

A DECC spokeswoman said the government was looking at providing innovation funding to support the development of technologies that make it easier to harvest wetland biomass and allow for the efficient use of wetland biomass.

However, she refused to be drawn on the likely scale of any new funding or the timeline for the launch of the competition, revealing only that the department was hoping to provide further details on the scheme later this year.

In the meantime, the department is inviting businesses and academics to provide feedback on the current state of the market and the most effective mechanism for government support.