Reducing the carbon intensity of fuels – particularly for use in transportation – presents a major potential opportunity to support national and international efforts to meet global greenhouse gas emissions targets.
With transport contributing a large proportion of the UK’s overall carbon emissions, cutting emissions from road fuels has been a key government objective for a number of years, driven by the Department for Transport’s (DfT) flagship policy known as the Renewable Transport Fuel Obligation (RTFO). That UK transport emissions have been the highest carbon-emitting sector in the UK since 2015 (BEIS Statistics) makes the urgency even more stark.
What is being done?
Transposed into UK law in 2007 from the EU’s Renewable Energy Directive (RED), with implementation beginning in 2008, the RTFO requires suppliers of fuels for road vehicles and since 2013 non-road mobile machinery (NRMM), such as tractors and plant machinery, to incorporate a proportion of biofuels into petrol and diesel.
Obligated suppliers – fuel suppliers who sell more than 450,000 litres of applicable fuels – do this by redeeming Renewable Transport Fuel Certificates (RTFCs) or by paying a fixed sum for each litre of fuel for which they wish to ‘buy-out’ of their obligation.
Over time, the proportion of biofuels required to be included in road fuels has increased and in 2019, the RTFO requires that all transport fuels must, on average across the year, contain an 8.5% minimum volume of renewable fuel. Fuel specifications were updated a number of years ago in anticipation of this potential change.
In practice, because some waste and residue-derived biofuels count double towards the target (see First-Generation Biofuels below), the physical biofuel content of road transport fuel will be less than the obligated amount, with ethanol and biodiesel volumes capped by the current petrol and diesel fuel standards respectively.
The RTFO trajectory reaches 12.4% of road fuels volume by 2032, with a requirement within that trajectory to increase the volume of ‘development fuels’ from 0.1% in 2019 to 2.8% by 2032.
In 2018, the RTFO was also amended to implement changes to the RED to account for indirect land use changes (known as ‘ILUC’), setting a maximum on the amount (or ‘crop-cap’) of crop-derived biofuel which may be counted towards renewable transport targets.