The biofuels sector needs a more consistent government approach, according to manufacturers.
They have urged the government to bring UK regulations in line with legislation throughout the EU.
It comes as Ensus, one of the country's biggest producers of biofuel, has announced its Teeside-based facility will be shut down for a temporary period.
The company said that the plant will close at the end of May but it due to reopen in four months, while staff will continue to get their full wage.
A spokesman for the biofuel company said that the move was as a result of a slump in demand and competition from the US.
"We fully expect the market to improve in the coming months as implementation of the regulatory framework for biofuels catches up with agreed EU legislation," a statement from Ensus said.
John Brady, senior biofuels project manager at the North East Process Industries Cluster (Nepic), said that the industry "must not sit on its laurels".
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