Green light for renewable transport fuels obligation

Five per cent of all fuel sold on UK forecourts will have to come from a renewable source by 2010, Transport Secretary Alistair Darling announced today

The Government announced that it was considering a renewable transport fuels obligation (RTFO) 18 months ago. Mr Darling has now confirmed that the Government will proceed with the plan as part of its efforts to tackle carbon emissions from road transport.

According to Mr Darling, the RTFO “is predicted to save around one million tonnes of carbon emissions in 2010 – the equivalent of taking one million cars off the road. Carbon savings could also increase in future years.”

Biofuels currently account for about 0.25% of road fuel sales, and so far the main policy to support them has been a lower duty rate than conventional fuels.

Under the obligation, which could be introduced by 2008, major oil companies and importers will have to ensure a growing proportion of their fuel sales are from a renewable source, rising to 5% by 2010. The measures will work through a system of certificates to demonstrate how much biofuel has been sold. Oil companies will be able to trade certificates, and will have to report on carbon savings and the sustainability of their supplies. An environmental assurance scheme would help ensure environmental benefits are achieved.

Clare Wenner of the Renewable Power Association welcomed “a big step forward in the UK’s efforts to combat climate change. It is disappointing that the Government has gone only as far as a 5% usage. Still, we are confident that this figure will increase over time so that motorists can do more to save carbon in the future.”

A feasibility study for the DfT, also published today, sets out a possible design for the detailed operation of the RTFO. However, the Government says no decisions have been taken and promises “thorough consultation” in due course.