The decisions made in today’s UK Budget in support of biofuels and the Renewable Transport Fuels Obligation (RTFO) risk failing to deliver sustainable biofuels or carbon emissions from transport and undermine the UK’s fledgling biofuels industry, the Environmental Industries Commission (EIC) has warned.

The Chancellor announced that from 2010/11 the current 20p per litre duty incentive for biofuels will be withdrawn and all support provided through the RTFO, which requires oil companies to include biofuels in fuel sold at pumps. Oil companies will be able to ‘buyout’ of this obligation at 30p per litre.

Graham Hilton, Chair of EIC’s Renewable Transport Fuels Working Group, said: “By removing the duty incentive before the RTFO is proven to work the Government is making it very difficult to get investment to develop biofuels in the UK.

“To deliver carbon savings the UK biofuels sector needs a clear support package to stimulate investment tied to world leading standards on carbon savings and sustainability. The Chancellor’s announcement today provides neither of these elements and will leave us reliant on imports of uncertain origin.”

The Chancellor announced that the biofuels duty incentive will be phased out from 2010-11 and that the buyout price in the Renewable Transport Fuels Obligation increased to 30p per litre. In 2008/09 and 2009/10 there will be a 20p per litre duty incentive and a 15p buyout price.

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