Biofuels
in the United Kingdom
General
According
to the Directive 2009/28/EC of the European Parliament and of the
Council on the promotion of the use of energy from renewable sources
the target for the share of energy from renewable sources in gross
final consumption of energy in the year 2020 for the United Kingdom is
15% (in the year 2005 the share was 1.3%). The Directive has a
mandatory 10 % target for transport to be achieved by all Member
States, which refers to renewable sources as a whole, not biofuels
alone.
Renewable transport fuels (biofuel)
The RTFO Scheme
To support and promote the use of renewable transport fuels in the UK,
the UK Government introduced the Renewable Transport Fuel
Obligation (RFTO ) in April 2008. This scheme was in effect throughout
2010. Under the RTFO all fossil fuel suppliers which supply in excess
of 450,000 litres of fossil fuel per year must provide evidence that a
certain percentage of their fuels for road transport in the UK comes
from renewable resources. Fossil fuel suppliers can meet their
obligation in a number of ways, either
• by supplying biofuels and claiming and redeeming certificates, or
• by redeeming certificates obtained from other biofuel suppliers, or
• by paying a buy-out price.
Each supplier of road transport fossil fuel has to produce certificates
showing the supply of an amount of renewable fuel equal to the
percentage specified. Percentages are expressed by reference to volume
rather than energy content. RTFO certificates can be traded between
suppliers.
The buy-out price has been set at a level designed to ensure that it
will generally be more economic to supply biofuel, in order to maximise
the uptake. For the first two years of the obligation the buy out price
was 15 pence per litre. When the fuel duty incentive was removed in
March 2010 the buy-out price was increased to 30 pence per litre,
therefore ensuring that producing biofuel would, in normal
circumstances, remain less expensive than buying-out the obligation.
The scheme provides for the recycling of buy-out payments to biofuel
suppliers who have redeemed or surrendered certificates.
The scheme specifies how certificates are applied for and issued. It
also sets out the powers and duties of the Administrator, which was the
Renewable Fuels Agency ('RFA') for the period covered by this report,
and the civil penalties that it may impose following non-compliance
with scheme requirements. The RFA also operated an internationally
acclaimed carbon and sustainabilty reporting system.
RTFO obligation levels
The Gallagher review concluded that there was a risk that biofuel
policies as they stood could lead to a net increase in GHG emissions
caused by displacement of existing agricultural production. The
previous Government accepted the main recommendations in the report and
consequently consulted in autumn 2008 on a draft Renewable Transport
Fuel Obligations (Amendment) O rder to amend the RTFO Order, including
slowing down the rate of increase of the obligation level. The
consultation document was published on 15 October 2008 and is available
at: (http://www.dft.gov.uk/consultations/closed/rftoorder/)
Following the consultation the Renewable Transport Fuel Obligations
(Amendment) Order 2009 (SI 2009/843) ('the RTFO (Amendment) Order') was
approved by Parliament and made in April 2009. As a result of this
amendment we expect a 5% volume (5.75% by energy) biofuel obligation
will still be achieved but in 2013/14 rather than in 2010/2011.
Under the Renewable Energy Directive the UK is required to source 10%
of our transport energy from renewable sources by 2020 (as part of a
wider EU commitment to sourcing 15% of UK energy from renewable
sources). Our analysis (as set out in the UK Renewable Energy Strategy,
2009) shows that this target will primarily be met through the use of
biofuels, although other innovations are also expected to play a part.
The transport elements of the Renewable Energy Directive are expected
to be implemented in the UK in December 2011.
Fuel Duty Incentives
On 31 March 2010 the fuel duty incentive of 20 pence per litre for
biofuels was removed. The duty incentive was retained for used cooking
oil (UGO). Biogas also receives an incentive in the form of a duty
differential equivalent to approx 41 pence per litre.
Renewable energy projections according to the National Renewable Energy Action Plan for the United Kingdom
The National Renewable Energy Action Plan (NREAP) for the United
Kingdom was submitted in July 2010. The target according to Annex I of
Directive 2009/28/EC is 15% for the year 2020 and the projected NREAP
share in that year exactly matches the target. According to the
projection, the most important contribution in the year 2020 is
expected from wind power (78.3 TWh or 6730 ktoe, 33% of all renewable
energy). Second important contribution is expected from biomass
(renewable heating and cooling) (3914 ktoe, 19% of all renewable
energy). The third largest contribution is from biodiesel (renewable
transport) (2462 ktoe, 12% of all renewable energy). Wind power
contributes in the year 2020 with onshore wind (14.9 GW and 34.2 TWh)
and offshore wind (13.0 GW and 44.1 TWh). For solar photovoltaic the
2020 contribution is projected to be 2.7 GW (2.2 TWh). For solar
thermal the 2020 contribution is projected to be 34 ktoe. The two most
important biofuels are projected to contribute 2462 ktoe (biodiesel)
and 1743 ktoe (bioethanol / bio-ETBE) by 2020. The renewable
electricity production from solid biomass amounts to 20.6 TWh (1770
ktoe) and for biogas it is expected to be 5.6 TWh (479 ktoe). The
consumption of renewable heat is expected to amount to 3612 ktoe for
solid biomass and 302 ktoe for biogas.
Future
programme changes expected
No information on future policy.
Sources
UK report on biofuels pursuant to Article 4 of Directive 2003/30/EC (July 2011)
http://www.dft.gov.uk/pgr/roads/environment/rtfo
(sourced May 2008)
ELOBIO,
Inventory of biofuel policy measures and their impact on the market,
September 2008, http://www.elobio.eu/publications
Directive
2009/28/EC of the European Parliament and of the Council of 23 April
2009 on the promotion of the use of energy from renewable sources and
amending and subsequently repealing Directives 2001/77/EC and
2003/30/EC (Entry into force on June 25th, 2009), download from
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32009L0028:EN:NOT
The National Renewable Energy Action
Plans (NREAPs) are all published on the Transparency Platform on
Renewable Energy: http://ec.europa.eu/energy/renewables/transparency_platform/action_plan_en.htm
Renewable Energy Projections as Published in the National Renewable
Energy Action Plans of the European Member States, http://www.ecn.nl/nreap
(sourced December 2010)
Interactive EurObserv’ER Database
http://www.eurobserv-er.org
Last update: July 2011
This information can be referenced without permission provided that the
source is mentioned completely and correctly: 'Interactive EurObserv'ER
Database, http://www.eurobserv-er.org (July 2011)'
Suggestions for improvements to the policy description can be sent to EurObserv'ER by e-mail: project@eurobserv-er.org
The EurObserv'ER barometer is a project supported by the European
Commission within the DG ENER 'Intelligent Energy Europe' programme and
by Ademe, the French Environment and Energy management Agency. The
EurObserv'ER Barometer is the result of the investigation and research
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use that may be made of the information contained therein.