BRUSSELS, Nov 7 (Reuters) - The European Commission unveiled plans onWednesday for fostering biofuel production in Europe in a bid to ensurethey account for two percent of all fuels by 2005.Biofuels are combustible fuels that can be used pure or blended withconventional fuels and are obtained by processing plant oils, sugarbeet,cereals and organic waste materials.The Commission said it had adopted an action plan that aimed at atarget of 20 percent inclusion of biofuels by 2020.European Union Transport Commissioner Loyola de Palacio said the planswould reduce the transport market's dependance on oil-based fuels."This coherent action plan for an alternative fuel strategy fortransport will tackle this over dependance, which is a significant sourceof environmental and supply cornerns for the European Union," she said ina statement.The Commission proposed a two percent minimum level of biofuels as aproportion of all fuels by 2005 and reaching 5.75 percent of all fuelssold by 2010.EU Tax Commissioner Frits Blkestein said a second proposal adopted bythe Commission offers member states the choice of reducing tax rates onpure or blended biofuels used as heating or motor fuel, would act as "animportant incentive for economic operators to turn towards products whichpromote sustainable development".The promotion of biofuel production will also impact the EU's farmingsector, Farm Commissioner Franz Fischler said.He said it could "offer new sources of income" and "become a concretedemonstration of a sustainable, multifunctional agriculture."