Oct. 15 (Bloomberg) -- Iraq may boost production of dates to produce biofuel for blending with gasoline, as governments seek cleaner-burning alternatives to crude oil.

The biofuel would be used locally and eventually processed into higher-quality fuel for export to Europe, according to Brahim Zitouni, president of Oasis Ltd., a potential project partner. The Dubai-based company proposed its technology a year ago to Iraqi Prime Minister Nuri al-Maliki, who “sanctioned the vision,” Zitouni said.

Iraq was the world’s fifth-largest date producer before the 2003 U.S.-led invasion destroyed farms. The biofuels project would support the economy by encouraging farmers to revive date- palm plantations and make use of poor-quality dates that would otherwise be wasted, the cabinet said in a statement last month, without identifying participating companies or estimating costs.

“We hope that in 2010 the Iraqi government will implement the project and that we will be part of it,” Zitouni said in an interview in Dubai last week. “We cannot say we have an agreement yet for any joint venture in Iraq.”

More than two decades after Brazil became the first country to mass-produce biofuel for cars, oil-rich Middle Eastern nations from Algeria to Saudi Arabia are beginning to study alternative sources of energy including solar, wind and crops to cut reliance on fossil fuels.

Emission Cuts

Using less oil and natural gas domestically would allow these nations to boost exports of the valuable hydrocarbons, stay ahead of technological advances in energy and help combat the greenhouse-gas emissions blamed for harming the environment.

The arid countries of the Middle East and North Africa are home to most of the world’s dates, according to the United Nations’ Food and Agriculture Organization. Iraq produced 400,000 tons, or 7.3 percent, of the world’s 5.46 million tons of dates in 2003, according to a report from the UN Industrial Development Organization.

It’s no longer among the top 10 producers because farms were decimated during the war, said Moza al-Shamsi, assistant director of research at the Date Palm Research and Development Unit of the United Arab Emirates University, citing 2005 data.

Iraq is the first country to show interest in Oasis’s date technology, according to Zitouni, who said he has tested it in his own laboratories.

Oasis would need an investment of $35 million to turn 100,000 tons of low-quality dates into 28,000 tons of bio- ethanol over one year. That’s equivalent to 211,000 barrels, enough to fill the tanks of 634,000 cars, Zitouni said.

Date Coffee, Flakes

A ton of dates may produce almost four times as much bio- ethanol as sugar cane, or 280 liters compared with 75 liters, and the remains of the fruit can be monetized by making byproducts such as date coffee and date flakes, Zitouni said.

“In Iraq, date-biofuel could be blended in fuel for cars locally or in refineries, producing high-quality oil products to meet European specifications,” he said. European carbon- emission standards call for cleaner, low-sulfur fuel for cars.

The U.A.E. capital, Abu Dhabi, which holds most of the country’s oil reserves, is also contending to lead the region’s alternative-energy production as conventional sources run out.

Government-run company Masdar, Boeing Co. and Honeywell International Inc. unit UOP LLC are studying the potential for large-scale production of biofuels made from salicornia bigelovii and saltwater mangroves, plants known as halophytes that can thrive in the desert and be irrigated with sea water.

To contact the reporter on this story: Ayesha Daya in Dubai at adaya1@bloomberg.net

Last Updated: October 15, 2009 05:27 EDT