Asked by: Karl McCartney (Conservative - Lincoln)
Question to the Department for Transport:
To ask the Secretary of State for Transport, what assessment his Department has made of the potential contribution to the UK's Net Zero targets of low-carbon liquid fuels.
Answered by Anthony Browne
The Government has supported the uptake of low carbon fuels for 15 years through its Renewable Transport Fuel Obligation (RTFO) scheme. The RTFO sets targets for the supply of low carbon fuels and sustainability criteria, which these fuels must meet. The RTFO has been highly successful in securing a market for the supply of low carbon liquid fuels in the UK.
Under current carbon budgets, low carbon fuels contribute a third of greenhouse gas (GHG) savings in the domestic transport sector. In 2022, low carbon fuel that were reported under the RTFO saved on average 82 per cent carbon emissions compared to the fossil fuels that they replaced, saving 7.2 million tonnes of CO2 emissions. In 2022, low carbon fuel made up 6.8 per cent of total road fuel supplied.
The Department plans to introduce a Sustainable Aviation Fuel (SAF) mandate from 2025, which will require at least ten per cent of UK aviation fuel to be made from sustainable sources from 2030. The Jet Zero Strategy set out that the use of SAF could contribute up to 17% of the emissions savings needed in the aviation sector by 2050.
The Department has accelerated the uptake of advanced low carbon fuels by allocating £171 million to advanced fuel demonstration projects through four competitions and is setting up a UK SAF Clearing House to support the testing and approval of advanced fuels for aviation.
The Department will also publish a Low Carbon Fuels Strategy to further support investment by setting out a vision for the deployment of low carbon fuels across transport modes up to 2050.
Asked by: Barry Sheerman (Labour (Co-op) - Huddersfield)
Question to the Department for Transport:
To ask the Secretary of State for Transport, what recent discussions has he had with Cabinet colleagues on reducing the fuel duty on Hydrotreated Vegetable Oil fuels.
Answered by Jesse Norman - Shadow Leader of the House of Commons
The Government recognises the potential carbon-reduction benefits of drop-in low carbon fuels, such as sustainable hydrotreated vegetable oil (HVO). HVO is eligible for Renewable Transport Fuel Certificates (RTFCs) under the Renewable Transport Fuel Obligation (RTFO) and, where they are produced from waste, they are eligible to receive twice the reward in certificates under the RTFO scheme.
The Department engages across government on how to ensure that appropriate incentives are in place to encourage the production and use of low carbon fuels. Matters of taxation, including fuel duty, remain the responsibility of the Treasury. The Government keeps all taxes under review, and any changes are announced by the Chancellor at fiscal events.
Asked by: Barry Sheerman (Labour (Co-op) - Huddersfield)
Question to the Department for Transport:
To ask the Secretary of State for Transport, whether his Department is taking steps to help increase the use of hydrotreated vegetable oil fuel.
Answered by Jesse Norman - Shadow Leader of the House of Commons
The Government recognises the potential carbon-reduction benefits of drop-in low carbon fuels, such as sustainable hydrotreated vegetable oil (HVO). HVO is eligible for Renewable Transport Fuel Certificates (RTFCs) under the Renewable Transport Fuel Obligation (RTFO) and, where they are produced from waste, they are eligible to receive twice the reward in certificates under the RTFO scheme.
The Department engages across government on how to ensure that appropriate incentives are in place to encourage the production and use of low carbon fuels. Matters of taxation, including fuel duty, remain the responsibility of the Treasury. The Government keeps all taxes under review, and any changes are announced by the Chancellor at fiscal events.
Asked by: Barry Sheerman (Labour (Co-op) - Huddersfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he plans to update the Hydrocarbon Oil Duty Act 1979 to categorise hydrotreated vegetable oil as a biodiesel.
Answered by Gareth Davies - Shadow Minister (Business and Trade)
Hydrotreated vegetable oil (HVO) is treated as diesel for the purposes of fuel duty. HVO benefits from the rebated duty rate of 10.18 pence per litre (ppl) when used for an allowed purpose, and 52.95 ppl for road use.
The 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. Renewable fuels supplied under the RTFO currently contribute a third of the savings required for the UK’s transport carbon budget.
The Government’s Biomass Strategy which was published on 10 August reviews the amount of sustainable biomass available to the UK, including liquid biofuels such as HVO. 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.
As with all taxes, the Government keeps the tax treatment of HVO under review.
Asked by: Barry Sheerman (Labour (Co-op) - Huddersfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has made an assessment of the potential merits of reducing fuel duty on hydrotreated vegetable oil fuel.
Answered by Gareth Davies - Shadow Minister (Business and Trade)
Hydrotreated vegetable oil (HVO) is treated as diesel for the purposes of fuel duty. HVO benefits from the rebated duty rate of 10.18 pence per litre (ppl) when used for an allowed purpose, and 52.95 ppl for road use.
The 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. Renewable fuels supplied under the RTFO currently contribute a third of the savings required for the UK’s transport carbon budget.
The Government’s Biomass Strategy which was published on 10 August reviews the amount of sustainable biomass available to the UK, including liquid biofuels such as HVO. 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.
As with all taxes, the Government keeps the tax treatment of HVO under review.
Asked by: Baroness Bakewell of Hardington Mandeville (Liberal Democrat - Life peer)
Question to the Department for Energy Security & Net Zero:
To ask His Majesty's Government what plans they have to support renewable fuel producers to scale up the domestic production of Hydrotreated Vegetable Oil (HVO) in UK-based refineries.
Answered by Lord Callanan - Shadow Minister (Foreign, Commonwealth and Development Office)
Hydrotreated Vegetable Oil (HVO) is one type of biofuel that offers a lower carbon alternative to fossil diesel. As sustainable biomass is a limited resource, the Government will prioritise its use in sectors that offer the greatest opportunity to reduce emissions, and where there are fewest options to decarbonise through alternative low carbon technologies.
HVO used in transport has been eligible for support under the Renewable Transport Fuel Obligation (RTFO) scheme for more than a decade. In 2021, 63 million litres of HVO was supplied under the RTFO in the UK.
Asked by: Baroness Bakewell of Hardington Mandeville (Liberal Democrat - Life peer)
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.
Answered by Baroness Penn
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.
Asked by: Baroness McIntosh of Pickering (Conservative - Life peer)
Question to the Department for Transport:
To ask His Majesty's Government what plans they have, if any, to encourage targeted technology investment in renewable fuels such as the use of waste cooking oils in aviation fuel.
Answered by Baroness Vere of Norbiton
The Renewable Transport Fuel Obligation is currently our main support mechanism to encourage the supply of renewable fuels, including aviation fuels and those produced from waste feedstocks like used cooking oil (UCO).
The Government plans to introduce the sustainable aviation fuel (SAF) mandate in 2025, which will aim to drive demand for SAF in the UK and deliver at least 10% SAF in the jet fuel mix by 2030. The mandate will include a cap on hydroprocessed esters and fatty acids (HEFA) SAF, which includes UCO. The Department is currently consulting on what level the cap should be set at.
Asked by: Ruth Jones (Labour - Newport West and Islwyn)
Question to the Department for Transport:
To ask the Secretary of State for Transport, if he will make a comparative assessment of the merits of the UK’s Renewable Transport Fuel Obligation and that deployed in the Republic of Ireland.
Answered by Jesse Norman - Shadow Leader of the House of Commons
Biofuel suppliers operate in a global market and the Department considers changes to the Renewable Transport Fuels Obligation (RTFO) accordingly, in the context of many support schemes offered worldwide. As the administrator of the RTFO, the Department also participates in the Renewable Fuels Regulators Club, which includes counterparts in the Republic of Ireland, and facilitates the sharing of best practice.
Asked by: Wera Hobhouse (Liberal Democrat - Bath)
Question to the Department for Transport:
To ask the Secretary of State for Transport, what assessment his Department has made of the potential merits of including electricity for electric vehicle charging in the Renewable Transport Fuel Obligation.
Answered by Jesse Norman - Shadow Leader of the House of Commons
The Renewable Transport Fuel Obligation (RTFO) is the Government’s core tool for decarbonising liquid and gaseous fuels used in road transport and non-road mobile machinery.
The Department is reviewing the impact of the Greenhouse Gas Obligation scheme, which ran from 2018 to 2020, in parallel to the RTFO, and extended to electricity used in road vehicles. The review will be published shortly.
As electrification of the road vehicle fleet progresses, the Government continues to keep under review the most appropriate mechanisms for supporting the deployment of electric vehicle charging infrastructure. This includes a review of the potential merits of including electricity for electric vehicle charging in the RTFO.