The NFU has called for the introduction of E10 petrol so farmers can increase their contribution and help work towards the UK's net zero ambition.
E10 fuel refers to a mixture of 90% petrol with 10% ethanol that has been made from wheat or sugar beet.
This is opposed to the current proportion that limits the content of bioethanol to a maximum of 5%.
The call comes as an All-Party Parliamentary Group (APPG) issued a report urging the Department of Transport to prioritise the introduction of E10.
They said it would reduce the use of fossil fuels and be equivalent to taking 700,000 cars off the roads.
MPs who sit on the group said the UK economy could soon lose its bioethanol industry - worth about £1 billion - if it does not introduce the fuel.
And British farmers could also be forced to purchase an increasing volume of animal feed from less sustainable sources, it warned.
Introducing E10 could secure market for wheat growers, which is becoming more important as the ability to export grain is threatened as political uncertainty continues.
'There simply isn't enough demand'
NFU combinable crops board chairman Tom Bradshaw said there has been a procrastination on renewable fuel policy, and the biofuel industry has suffered as a result.
“Increasing the bioethanol content in fuel is a win-win for the environment, farmers and the economy.
“But at the moment there simply isn’t enough demand to keep these plants going.”
Mr Bradshaw said the protein by-product of E10 means it can help feed the national herd, displacing imports of soya and further reducing greenhouse gas emissions.
“Now is the time for legislative action. Farmers want to help deliver renewable fuel for the nation but the government needs to step up and provide supportive policy, especially if we are to hit their target of becoming a net zero economy by 2050,” he added.