METI plans to develop electric vehicles, hydrogen and fuel cells, clean diesel power and biofuels in an effort to reduce the auto industry's dependence on oil by 20 percent from the current 100 percent in 2030, ministry officials said.

METI also called for improving energy efficiency in 2030 by 30 percent from the current level.

The plan, called an "initiative to develop next-generation automobiles and fuels," was approved during a meeting the same day among Economy, Trade and Industry Minister Akira Amari, Fujio Cho, chairman of the Japan Automobile Manufacturers Association, and Fumiaki Watari, president of the Petroleum Association of Japan.

METI wants to include the plan in the government's 2007 economic and fiscal policy guideline to be compiled in June.

The ministry is considering promoting technological transfers to other countries to help achieve Japan's "Cool Earth 50" initiative aimed at fighting climate change by halving global greenhouse gas emissions by 2050 from current levels and the creation of a post-Kyoto Protocol framework.

According to the officials, METI will request that 160 billion yen be earmarked over the five-year period, or 32 billion yen a year, to develop fuel cells so that fuel-cell vehicles become as affordable as gasoline-driven automobiles by 2030.

METI plans to set aside 24.5 billion yen over the period, or 4.9 billion yen a year, for a project to develop next-generation batteries with a view to introducing electric vehicles in Japan in 2030. The envisaged EVs would outperform present models at one-fortieth of the cost.

The ministry wants to secure 24 billion yen over the five years, including the 6.9 billion yen already allocated for fiscal 2007, for efforts to ensure the full introduction of clean diesel-powered passenger cars in Japan after 2009.

METI said it will expand tie-ups with academics and industries to speed up the development of next-generation biotechnology for fuels. The ministry will also seek political backing during the next ordinary Diet session to ensure quality control for biofuels and to prevent tax evasion by relevant industries.

With such steps, the ministry hopes to reduce the price of domestically produced biofuels from the current level of 150-180 yen a liter to 40 yen a liter.

Separately, the officials said METI will work with other ministries and the auto industry to improve the road infrastructure and make better use of information technology at toll stations and traffic lights to ease congestion in major cities.

With every 1 kilometer per hour increase in average traveling speed, fuel efficiency improves by 1 percent, they said. Cars travel at an average speed of 18.8 kph in Tokyo, much slower than 26 kph in Paris and 30 kph in London.