UK Sustainable Bio-diesel Alliance to fight the Government's plan to abolish the duty differential for bio-fuels

(27/07/2009)

The 2008 Budget announced that the 20 pence per litre duty differential for bio-fuels for road use would cease from 2010. This means that that bio-diesel will become significantly more expensive than main road (fossil) fuels and therefore not viable commercially.

Removing the differential means that the only support for bio-diesel is from the Renewable Transport Fuel Obligation (RTFO), which obliges fuel suppliers to ensure that a percentage of the fuel sold on UK forecourts comes from bio-fuel. This takes no account of companies, such as McDonalds, Morrisons and 3663, who choose to run their captive vehicle fleets on high blend (20-100%) bio-diesel, for whom the change in price of using bio-diesel will be commercially unviable. These companies will have no choice but to return to using fossil-based road fuels and the bio-diesel producers supplying them will be forced out of business.

Convert2Green has established the UK Sustainable Bio-diesel Alliance (UKSBA) to fight the Government’s plan to abolish the 20p per litre differential from next year, which will make bio-diesel more expensive to purchase than fossil fuel and no longer viable to produce in the UK.

UKSBA Chair and Convert2Green Director Mark Sneesby said: “The Government’s actions are at odds with their own recognition that bio-diesel is an important alternative fuel source, with the low carbon sector identified as one of the most important areas of opportunity for the UK’s future economic growth.

“This short sighted effort to raise funds for the Exchequer will mean businesses are forced to close and jobs are lost. In the medium to long term this tax grab will lose the Government millions of pounds from fuel duty revenue and VAT income and leave other countries to lead the way in developing low carbon bio-diesel.

“Without a UK industry, suppliers will have to import bio-diesel to meet European targets for renewable fuel use, creating more emissions and increasing costs. The Government’s Road to Copenhagen report said more would be done to help develop low carbon fuels but the Government’s own actions fly in the face of that laudable intent ”.

The UKBSA will be lobbying Parliamentarians and decision makers to make the Government re-think it’s decision to abolish the differential.

The European Commission has placed a duty on the UK and all other European countries to generate 20% of its energy from renewable sources by 2020. Current projections suggest the UK will only reach 5%. As 25% of all emissions come from the transport sector, bio-diesel has the potential to play a very big part in achieving that goal.

Related categories:  Biofuels and biomass   Environmental legislation   Environmental technologies for Transportation