Under the Renewable Transport Fuel Obligation (RTFO), fuel suppliers must include a growing proportion of bioethanol or biodiesel in fuel - from 2.5% this year to 5% in 2010/11.
Last October, the DfT consulted on proposals to slow the target so it does not hit 5% until 2013/14 (ENDS Report 406, p 41 ). This was due to concerns over biofuels’ sustainability and impact on land use change (ENDS Report 402, p 39 ).
The DfT said it would set a target of 3% for 2009/10 and this would then rise by 0.5% a year. But in January, it announced the 2009/10 level would be 3.25%.1 The reason for the increase is a drafting error in the current RTFO Order, which has meant fuel suppliers do not have to meet the RTFO target for all fuels.
The Order says the RTFO only applies to "relevant hydrocarbon oils" that do not contain any biofuel before duty is paid. So fuel blended with any amount of biofuel before the duty point does not have to meet the target.
As a result of the error, the DFT estimates that only 2.25% of road fuels supplied in 2008/09 will be biofuels so it is appropriate to raise the target for 2009/10. The total amount of biofuels supplied in the two years should be the same as originally proposed.