Question to the Department for Transport:

To ask the Secretary of State for Transport, what assessment his Department has made of the effect of falling bio-ethanol prices on the (a) operation and (b) future of the UK bio-ethanol industry.

The price of bioethanol is set by the global fuels market and a range of factors will influence this, including production and raw material costs and the relative price of fuels and other commodities.

In September the Government published its response to a consultation on proposed amendments to the Renewable Transport Fuel Obligation. It is available at: https://www.gov.uk/government/publications/renewable-transport-fuel-obligations-order-government-response. The analysis of the costs and benefits of the proposals included in Annex A of that document identifies market price developments i.e. how renewable fuel prices change in relation to fossil fuel prices, as an area with some uncertainty. To address this uncertainty, the analysis considers the impact of our proposals under low, central and high projections of the price spreads between renewable fuels and fossil fuels.

The 15 year strategy for renewable transport fuels provided by the Government’s Response is designed to provide a strong and growing market in the UK which should benefit existing domestic investments as well as encouraging further opportunities in this area.