The UK government's announcement that the duty differential for Used Cooking Oil biodiesel will continue for two years from April 2010, made in last week's Pre Budget Report, has been welcomed by UK Sustainable Biodiesel Alliance (UKSBA). In an announcement made today (15th December) the UKSBA said that it had been lobbying against the loss of the 20 pence per litre duty differential that the government had proposed for next year.

The government initially announced plans in the 2008 Budget to remove a 20 pence per litre duty differential for all bio-diesel from 2010, arguing that the tax discount could not distinguish between sustainable bio-fuels and those that raise greenhouse gas emissions or raise wider sustainability concerns.

The UKSBA has been campaigning against this effective tax increase, arguing that systems exist that can make the necessary differentiation, particularly for Used Cooking Oil, which is derived from a waste product and offers high levels of sustainability. The Alliance has also strongly argued that removing the differential would make sustainable biodiesel uneconomic to produce when compared against fossil-based fuels, threatening jobs and also increasing carbon emissions.

The Pre-Budget Report has acknowledged that biodiesel from Used Cooking Oil is highly sustainable and should be treated differently, a result welcomed by Mark Sneesby, Chair of the UKSBA. Speaking today Mark said:

"Transport is the only sector of the UK economy where carbon emissions are still rising and sustainable biodiesel has a significant role to play in helping to reduce this. The retention of the duty differential until March 2012 means that the industry has the chance to build on the 3 million tonnes of CO² already being saved via sustainable biodiesel and that companies that use high blends of UCO based biodiesel in their captive fleets and on the forecourt can continue to do so.

"With the Pre Budget Report coming in the same week as the start of the UN Climate Change Conference in Copenhagen, this announcement shows that the government is willing to stand behind the UK's innovative UCO based biodiesel industry and act on rising carbon emissions from transport."