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Environmental benefits of biofuel 'outweigh cost concerns'

Date: 17 April 2018   |   Author: Sean Keywood

An increase in the proportion of biofuels included with road transport fuel in the UK is good news, despite concerns about potential increased fuel costs.

That's according to fuel card provider Fleetcor - the owner of brands including Allstar, Keyfuels, The Fuelcard Company and Epyx.

The increase in the amount of biofuel included with fossil fuels came into force on 15 April, when the government implemented a change to the UK Renewable Transport Fuel Obligations Order (RTFO).

This increased the required proportion of biofuel in every litre of petrol or diesel from 4.75 to 7.25%.

An increase in this proportion is nothing new, with the government having previously implemented rises of 0.5% between 2010 and 2012, and of 0.25% between 2012 and 2013. However, it has remained at 4.75% since then.

Paul Holland, Fleetcor's chief operating officer, said that the introduction of a 2.5% increase had caused some fears that costs could rise.

However, he said that environmental benefits should be seen as enough to outweigh this.

He said, "The significantly larger increase of 2.5% has caused concern among some industry stakeholders around a subsequent increase in fuel costs for businesses and consumers.

"In response to these concerns, while cost increases are never welcome, the impact of this change affects all and is clearly an important step in addressing critical environmental challenges. 

"The RTFO order is a key aspect of the government's 15-year plan to reduce carbon emissions and is a positive step to delivering higher levels of renewable transport fuels."

Holland said Fleetcor was firmly behind efforts to make fuel more environmentally friendly.

"As the leading provider of fuel cards in the UK, we would continue to encourage fuel providers to commit to the production of high-quality fuels with a reducing adverse environmental footprint, in line with government's guidelines," he said.

"Doing so will help steer the industry to a future that is environmentally friendly and efficient."

The rise to 7.25% biofuels is not the end of the increases, as the government has plans in place for the proportion to be increased again in years to come.

Under legislation brought in this year, the proportion is to rise to 9.75% in 2020 and then again to 12.4% in 2032.

The government has also introduced a cap on the maximum contribution from fuels made from agricultural crops that can be used to meet the allocation, with the aim of encouraging higher contributions from fuels derived from waste, such as used cooking oil.

The crop cap has begun this year at 4%, and will reduce on a linear basis year on year from 2021 to reach 3% in 2026 and 2% in 2032.

There's also a target to increase the proportion of advanced 'development fuels', beginning at 0.1% in 2019 and rising to 2.8% in 2032.

The changes were initially announced by the government following a consultation last year, and passed into statute after they were signed off by the House of Lords last month - the final stage in the parliamentary process.

Proposing the legislation in the House of Lords, Baroness Sugg, Parliamentary Under-Secretary of State for Transport, said, "Under the RTFO, the greenhouse gas emissions savings from renewable fuels have improved year on year. 

"Last year, the average greenhouse gas saving of a litre of renewable fuel was 71% compared with petrol and diesel. The draft regulations build on that success.

"These regulations set a 15-year strategy, mitigate indirect land-use change risks and promote advanced development fuels, and they are the most ambitious in this area to date."

The RTFO applies to fuel providers that supply at least 450,000 litres of fuel a year for road transport and non-road mobile machinery.



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