As biofuel consumption grows, it will follow oil and become a liquid market with risk management tools, according to E.ON.
A trading official for the world's largest publicly owned energy service provider speaking at the Coaltrans conference in Prague said biofuels would follow coal, which in turn followed oil, Reuters reported.
"Many people accept coal is in many ways following the oil markets. I remember in the 1980s as an oil trader, people saying 'what are all these banks doing here? They don't even know why sweet crude is called sweet', but they soon saw the banks brought liquidity and developed the market," said Edward Sigar, E.ON trading director for coal, biofuels and freight.
Co-firing power plants use biofuels, or biomass, alongside traditional coal, offering a lower emissions fuel mix.
Mr Sigar asserted that E.ON burns around three million tonnes a year of biofuels including wood, industrial and agricultural residues, none of which are competitive with the human food chain.
In August, E.ON said it was considering investing £300 million to build a 150 megawatt biomass plant in Bristol, which would be one of the biggest such plants in the UK.
