Andy
You are half-right and half-wrong.
I quoted bio-fuels, not just diesel. 10-20% pure bio-ethanol added to petrol also helps, just as much as 10-20% of bio-oils added to diesel fuel. Whether we import bio-fuels or produce them locally, they still need more energy to produce and transport than the energy you can obtain from them, in most cases. I'm all for a national collection of USED veggie/animal oils from deep fryers and slaughter houses (rendered fats). They can be easily purified and added to traditional diesel fuel, requiring no modification to the car. I am all against growing bio-fuel crops (there may be a few exceptions, but the biggest drawback is that it requires a monoculture radius of ~ 60-70 km to provide sufficient produce to justify a processing station economically and the average transport of the harvested crops within this circle will consume most of the fuel produced).
As far as cars are concerned, the website
http://www.cypenv.org/Files/cars.htm is specifically devoted to the problem in Cyprus, while
http://www.cypenv.org/Files/hydrogen.htm talks about hydrogen, particularly for cars.
If you had studied energy and the environment as deeply as I have (I used to work for UNEP), you would know that the 2nd law of thermodynamics rules that any conversion of energy will, in practice, involve losses. Using electricity for transport is less efficient than a good hybrid car in the conversion of the chemical energy in the fuel to the mechanical action in the wheels:
Overall chemical>mechanical efficiency of a Prius car = ~35%
Overall chemical>electricity efficiency of a modern power station = ~40%
Overall electricity>electricity efficiency of a battery in an electric car = ~80%
Overall electric>mechanical efficiency in an electric car = ~90%
Overall chemical>mechanical efficiency of an electric car = 40/100 x 80/100 x 90/100 x 100 = ~29%
Therefore an electric car will burn more fuel than a hybrid car.
Overall chemical>electricity efficiency of a modern power station = ~40%
Overall electrical>hydrogen efficiency in an electrolyser = ~75%
Overall hydrogen losses efficiency in a distribution system = ~90%
Overall hydrogen>electricity efficiency in a Ballard fuel cell hydrogen car = ~45%
Overall electric>mechanical efficiency in a hydrogen car = ~90%
Overall chemical>mechanical efficiency of an electric car = 40/100 x 75/100 x 90/100 x 45/100 x 90/100 x 100 = ~11%
Therefore a hydrogen car will burn MUCH more fuel than a hybrid car.
This does not take into account other basic facts abour Ballard fuel cells (10 min warm-up from switch-on to starting to move, lifetime of ~1,000 hours, insufficient platinum in the world to satisfy demand etc).
It must be emphasised very strongly that hydrogen is NOT a fuel, it is only a rather inefficient means of storing energy produced by other means, in much the same way as a battery.
IMO, we do not have a suitable battery technology (yet?) for economical mass-produced electric cars and we certainly do not have the electric infrastructure to keep their batteries charged. If everyone ran electric (or hydrogen) cars, we would have to double/triple the existing power generation capacity and the distribution grid. This would cost billions and, if we were to respect our EU/Kyoto commitments, it could be done only with a combination of renewables and nuclear power (a EuroPR 1.6 GWe nuclear power station could just about provide sufficient energy for about 80,000 - 100,000 electric cars in peak condition).
The only real answer to reduce our dependence on oil for transport is an efficient public transport system: high-speed trains serving hubs outside the cities and efficient trolley-buses or trams from the hubs to all the quarters of the city, ban on all other vehicles in the city-centres from 0700 to 2100 h, emergency vehicles and certified handicapped persons excepted. Goods should also be transported using the same infrastructure (ban on goods vehicles for intercity use). The energy for this would have to be nuclear. Tolls on motorways: tax on motor fuels and cars to discourage their use, say £2/l or tax per km: efficient hybrid bus services from city hubs to villages. Free bicycles available at hubs and other strategic points. Yes, it would cost a fortune, but would it not be worth it, if only to save lives from road accidents, pollution-induced illnesses etc. and to make Cyprus a little nearer to the paradise it could be?