Behind the cellar door at number 12 Paseo de La Habana in the centre of the Spanish capital, a bitter smell of olives permeates the stuffy atmosphere.

An aluminium heating system continuously sucks tonnes of olive cores from a silo to a stove where they are transformed into embers that give off sufficient energy to heat 16 apartments and offices.

"The quality of the heating is higher and more constant than natural gas or carbon, it's less dirty and less ugly than coal, the costs are lower and it is a national product which does not leave us dependent on fuel (price) fluctuations," says Jorge Tudel, chairman of the flat-owners association.

The scheme came into being when the association found itself confronted by the need to renovate the old carbon-based heating system.

The firm it contacted, Calordom, which relies on olive cores, almond skins or grape pips for its own energy needs, proposed its services to homeowners who were immediately enthusiastic.

The possibility of receiving financial help from regional authorities, who over the past two years have provided assistance for the installation of renewable energy sources, was a factor behind Calordom's decision to invest 100,000 euros (120,000 dollars), of which 20 percent was public money, in the conversion project.

In 2005, the first year of the scheme, heating costs for the whole building came to 17,000 euros, compared with 23,000 euros under the old carbon-based system, a 30 percent saving.

The building is one of 300 in the Spanish capital that has been converted to olive-fuelled energy, says Calordom head Juan Cabello. When the firm launched its operations in 2001 it had just one employee, compared with 15 today.

"The energy is 100 percent non-polluting, a kilo (2.2 pounds) of burnt olive cores, in reality wood compressed in a natural fashion, emits the same quantity of carbon gas as they would if you just left them to rot," insists Cabello.

"The use of compressed wood ...has existed in Austria for 15 years and also in Germany and France.

"In Spain, environmental consciousness remains little developed," he added.

Cabello notes that "you find olives from the Pyrenees to the Bay of Cadiz," easily making Spain the world's top producer.

But energy from the crop remains "insignificant" in the country compared with natural gas, fuel or coal.

And ecologists say that must remain the case as they fear the process has flaws that would clearly emerge if the process were to become more widespread.

In that case, energy cultures would become "intensive, which would presupppose a high utilisation of fuel-derived fertiliser, utilisation of high fuel consumption machines and, in that case, the energy balance is no longer positive," explains Sara Pizzinato from Greenpeace.

Pizzinato says that "the carbon gas emitted to produce this energy must not be greater than that which it is then going to emit and that the energy generated by this combustible (product) must be superior to the energy utilised in creating this combustible."

Excessive use of the biomass burned on a large scale could have effects that would be in inverse proportion to those banked on in environmental terms.

It could lead to a drop in the quality of the land, desertification and climate change, ecologists warn.

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