Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the tax incentives offered by (1) Czechia, (2) Latvia, (3) Luxembourg, and (4) Sweden, to support the further rollout of renewable biofuels, such as Hydrotreated Vegetable Oil (HVO); and what plans they have to introduce similar incentives in the UK.

Hydrotreated vegetable oil (HVO) is taxed at the same rate as diesel and required to be marked if used for an allowed purpose. The Government is aware that other countries use tax incentives to increase the uptake of HVO, but differences between tax systems make direct comparison difficult.

The UK Government encourages the use of HVO through the Renewable Transport Fuel Obligation (RTFO), which incentivises the use of low carbon fuels and reduces emissions from fuel supplied for use in transport and non-road mobile machinery. The RTFO has been highly successful in supporting a market for renewable fuel since its introduction in 2008.

In addition, the forthcoming Biomass Strategy will review the amount of sustainable biomass available to the UK, including liquid biofuels such as HVO, and how this could be best used across the economy to achieve our net zero target. It is important to ensure that biomass is prioritised within the economy where it offers the greatest opportunity to reduce greenhouse gas emissions in ‘hard to abate’ sectors where there are fewer options to decarbonise through alternative low carbon technologies.

The Government keeps all taxes under review.