Renault will launch its first bioethanol-powered car in the UK later this year, when the Megane Hatch E85 goes on sale.

Renault's existing 104bhp 1.6-litre engine has been adapted to run on bioethanol, with changes to the fuel tank, injection system and combustion chambers. E85 is a mixture of 85% ethanol and 15% petrol.

The technology has been incorporated from Renault's Brazilian division, which has been selling versions of the Clio and Megane that run on E100 fuel since 2004.

The car should appeal to company car drivers, because a new tax incentive offers a 2% discount on employees' taxable car benefits when their car is capable of running on E85.

No prices have been released, but the car is expected to cost around ??200 more than its petrol-only equivalent.

Source: [url=http://www.autotrader.co.uk/EDITORIAL/CARS/news/35096.html]Auto Trader UK[/url]