Regulator imposes first renewable fuel penalties

The UK’s biofuel regulator has imposed a £50,000 penalty on an oil supplier that failed to provide compliant fuel. Subsidiaries of BP and Total have also received penalties

Three firms have been penalised for failing to include biofuel in the fuel they supplied in 2009/10 or not registering with the Renewable Fuels Agency.

The civil penalties are the first imposed by the RFA. One supplier, Yorkshire Petroleum Company Ltd (Yopec), received the maximum penalty of £50,000.

Under the Renewable Transport Fuel Obligations (RTFO), firms that sell more than 450,000 litres of diesel or petrol for road use each year must include a certain percentage of biofuel in their supplies. This rises each year and is currently 3.63%.

Alternatively, suppliers can ‘buy-out’ their obligation by paying into a central fund, which is later shared out between firms who provided compliant fuel. For every litre of biofuel not supplied during the period, 15p must be paid into a central fund. This is recycled to firms that met their obligation. The current recycling payment is 30p/l, providing a clear incentive for selling biofuel.

The law also requires the carbon intensity and sustainability of biofuels to be reported to the RFA. Voluntary targets for these were missed by several major suppliers last year (ENDS Report, July 2010).

Yopec’s penalty was imposed on 17 December and announced on 11 January. The company exceeded the 450,000l threshold in 2009 but failed to register with the RFA, an offence in itself. However, the regulator decided last autumn not to impose a penalty due to the limited financial benefit incurred and Yopec’s willingness to cooperate.

Despite subsequently registering and being made aware of its duties, Yopec did not meet them. It made some payments into the central fund but not enough to meet its obligations.

The RFA will charge interest on the outstanding payment and has threatened to seek a court order to wind up the firm.

“This company had full knowledge of what was expected of it and failed to deliver. We take these breaches very seriously and will take whatever action is within our power to ensure compliance,” said the RFA’s head of regulation David Calderbank.

Yopec intends to appeal against the penalty, according to the regulator. ENDS was unable to contact the firm.

The Energy Act 2004 allows the recipient of a civil penalty to ask the RFA to review its decision. Should the decision be confirmed, the recipient can ask the courts to intervene. The penalty may then be cancelled or reduced.

The other civil penalties, both £5,000 were issued against Aral Direkt GmbH, part-owned by BP, and Total Additifs et Carburants Speciaux, part of French oil firm Total. Both companies registered late but met their obligations in 2009/10 so obtained no financial advantage. Neither firm will appeal.

Three firms have been penalised for failing to include biofuel in the fuel they supplied in 2009/10 or failing to register with the Renewable Fuels Agency.

The civil penalties are the first imposed by the RFA. One supplier, Yorkshire Petroleum Company Ltd (Yopec), received the maximum penalty of £50,000.

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