Biofuels: Excise Duties

(asked on 23rd March 2021) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of introducing a lower excise duty bracket for biodiesel that is 100 per cent derived from waste biomass.


Answered by
Kemi Badenoch Portrait
Kemi Badenoch
President of the Board of Trade
This question was answered on 29th March 2021

The Government supports renewable fuels under the Renewable Transport Fuel Obligation (RTFO), rather than through duty relief. One benefit of this is that the RTFO scheme sets mandatory sustainability criteria which must be met in order for renewable fuels to benefit from the receipt of Renewable Transport Fuel Certificates (RTFCs). In this way we can ensure that renewable fuels supplied and rewarded in the UK deliver genuine reductions in greenhouse gas emissions compared to fossil fuels.

Where a renewable fuel is produced from waste it is eligible to receive twice the reward in certificates under the RTFO scheme than biofuels produced from non-wastes.

The RTFO has been highly successful in supporting a market for renewable fuel since its introduction in 2008. In 2019, the use of renewable fuels supplied under the RTFO scheme, as a replacement for fossil fuels such as regular petrol or diesel, saved almost 5.5 million tonnes of carbon dioxide emissions. This is the equivalent of taking 2.5 million combustion engine-powered cars off the road. Renewable fuel supplied under the RTFO currently contributes around a third of the savings required for the UK’s transport carbon budget and around two thirds of biofuels reported under the RTFO are made from wastes.

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