UK Petroleum Industry Association
21st January 2008
Commons Select Committee Report on Biofuels
Today, the Environmental Audit Committee has published its report Are bio fuels sustainable? to which UKPIA submitted written evidence.
A key conclusion of the report is that whilst most bio fuels are sustainable, the Government and the EU should not pursue new targets to increase the use of biofuels in the absence of proven, robust sustainability standards and mechanisms to prevent damaging land use change.
Other conclusions in the report were:
- Biofuels are unlikely to improve fuel security as they largely rely on fossil fuels for their production;
- current agricultural support for biofuels is largely unsustainable;
- there could be significant opportunities for cost-effectively cutting greenhouse gas emissions by planting forests and restoring habitats.
Malcolm Watson, Technical Director of UKPIA commented “The conclusions largely concur with evidence that we have submitted in responses to consultations on bio fuels and with reports published by several research bodies in recent years. It supports our argument for caution before proceeding with further ambitious legislative measures envisaged in the current review of the Fuels Quality Directive and Renewable Energy Directive (due to be adopted by the Commission on 23rd January), that would increase the level of biofuel content in road fuels beyond the current target of 5% from 2010 onwards.”
He continued “The industry is working hard to achieve the targets set out in the Renewable Transport Fuel Obligation(2) and will continue to contribute to ongoing work to develop robust reporting measures for the sustainability and carbon saving of bio fuels.”
Nick Vandervell +44 (0)20 7632 9880
Malcolm Watson +44 (0)20 7632 9882
Notes to editors:
- UKPIA represents nine oil refining and marketing companies operating in the UK, which also own approximately 2,200 of the UK's 9,000 service stations, and own and operate the nine major crude oil processing refineries in the UK.
- In November 2005, the Government announced its intention to introduce a Renewable Transport Fuel Obligation (RTFO), requiring suppliers of road fuels to incorporate a proportion of biofuel in petrol or diesel. The Renewable Fuels Agency (RFA) http://www.dft.gov.uk/rfa was established in November 2007 and is responsible for monitoring the implementation of the RTFO by obligated companies. The RTFO moves the emphasis away from a duty incentive to an obligation/penalty upon suppliers, with the likelihood that the higher cost will be reflected in pump prices. The RTFO will commence in April 2008 with a target of 2.5% biofuel content in road fuels in 2008/9, 3.75% in 2009/10 and 5% in 2010 onwards. Under the RTFO there will be a continued support package of 20p per litre duty incentive for biofuels (guaranteed until 2009/10) supplemented by a new 15p per litre buy-out penalty for suppliers failing to meet the obligation, meaning an overall 35p per litre incentive in 2009/10 for the biofuel element but reducing to 30p per litre in 2010/1.
- A key area of concern with the introduction of biofuels is the amount of carbon saved and the sustainability of the source material. The Government issued in January 2008 guidance to the RFA on the RTFO which sets out the Government's policy and approach to these issues. The RFA in January 2008 issued guidance to obligated companies on how to report on the sustainability of biofuels supplied through the RTFO. The RFA is also commissioning further research on sustainability criteria.