Renewable Energy and Fuel Quality Directives

Thursday 10th March 2011 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

Biofuels have an important role to play in efforts to tackle climate change, particularly where there is no viable alternative fuel on the horizon, as is the case with aviation and HGVs. In addition, they also have a role to play in promoting the security of energy supply. But we firmly believe that the potential carbon benefits of biofuels can only be realised if they are produced in a sustainable way.

My Department recognises that there are legitimate concerns about the sustainability of some biofuels. Biofuels are a continually developing technology and there is still scientific uncertainty about the sustainability of biofuels and their wider socio-economic impacts.

Much work is under way to better understand indirect sustainability effects. It is crucial that we establish strong sustainability criteria and a robust lifecycle carbon analysis to ensure first that biofuels deliver real greenhouse gas reductions and second, do not cause unacceptable environmental side effects in the process.

In particular, my Department takes the issue of indirect land use change seriously. We have recently published research on the scale of indirect land use change impacts and we are continuing to lead work on how to tackle these. The European Commission is in the process of assessing a range of options to address the issue of indirect land use change and I have written to the EU Energy, Environment and Climate Commissioners to impress on them the need for an adequate and robust solution.

Given the uncertainties, I believe it is right that this Government have taken additional time to review the subject carefully. There have been shifts in biofuels policy in the past so we need to ensure that policy decisions going forward are robust and stable, which will also give confidence to business to invest.

In addition to concerns regarding the sustainability of biofuels, we must also consider where biofuels would be best deployed across the transport sector. It may be best to focus use of what may well be limited supplies of sustainably sourced biofuel in transport modes where no other low-carbon energy source is likely to be viable.

In April 2010, my Department commissioned work to determine how best biofuels should be deployed across all transport modes. In addition, the Government tasked the Committee on Climate Change to review the level of ambition for renewable energy. These pieces of work are due to conclude over the coming months. The evidence we gather about the best use of biofuels across modes will inform our view of likely levels of uptake.

Given that biofuels policy has wide implications, I will continue to engage with ministerial colleagues across Whitehall to ensure that Government policy on biofuels is aligned going forward.

Today, I am publishing separate consultations on proposals to implement the European renewable energy and fuel quality directives. Both of these directives contain requirements related to the use of biofuels.

The renewable energy directive requires the UK, by 2020, to source 15% of its overall energy, and 10% of energy used in transport, from renewable sources. The related fuel quality directive requires fuel and energy suppliers (principally those providing fuel and energy for land-based transport) to reduce the lifecycle greenhouse gas emissions of the fuel/energy that they supply by 6% per unit of energy by 2020.

Given the need to consider our developing evidence base, I do not propose to make any changes to the current biofuel supply trajectory that is set out in the Renewable Transport Fuel Obligations Order 2007. However, there will be a legal obligation on the Secretary of State to keep this issue under review and to consider what additional measures will be required to ensure that the UK delivers the requirements of the EU renewable energy and fuel quality directives in the period 2014 to 2020. This approach should enable us to establish a stable biofuel policy that will allow industry to robustly plan for the period 2014 to 2020.

The two consultation documents set out proposals to implement the transport requirements of the renewable energy directive through amendment of the UK’s renewable transport fuel obligation (RTFO) and proposals to implement the fuel quality directive through the amended RTFO and the proposed motor fuel greenhouse gas saving regulations. Our implementation proposals involve making new provisions for biofuels to meet the EU biofuel sustainability criteria and introducing double certification for biofuels produced from wastes (such as used cooking oil) and other feedstocks that do not compete with food production or contribute to indirect land use change. In addition, we propose to put in place a 6% lifecycle greenhouse gas reduction obligation for 2020 and introduce requirements for the relevant fuel/energy suppliers to report on the lifecycle greenhouse gas performance of their fuels in the meantime.

The consultation period will run from today until 2 June and we aim to introduce and bring into force the relevant legislation completing the implementation of the transport elements of both directives by the end of this year.