Chatham House: UK biofuel policy may need to be modified

biodieselUK biofuel policy may need to be modified. To say it is a report published by Chatham House, a british think tank focused on “Costs and Consequences of Expanding Biofuel Use in the United Kingdom”. According to Rob Bailey, author of the report, “in its present form the RTFO (Renewable Transport Fuel Obligation, editor’s note) may not be an appropriate instrument for achieving the RED (Renewable Energy Directive, editor’s note) target economically. Its volumetric target incentivizes suppliers to minimize cost per litre by supplying ethanol, thereby also minimizing the amount of energy supplied by biofuels. This runs counter to the objective of the RED to increase the share of energy from biofuels.

The use of volumetric targets to achieve energy content goals is likely to result in suboptimal outcomes and higher costs for motorists. Nor is the RTFO in its present form an appropriate instrument for achieving the RED target sustainably. Neither indirect land-use change nor food security is addressed in its sustainability criteria. In the absence of such safeguards, increasing biofuel consumption could have significant environmental and social consequences outside the United Kingdom. It is unclear whether such safeguards will be agreed at the EU level”.

Since 2008, the UK has required fuel suppliers to add a growing proportion of sustainable materials into the petrol and diesel they supply. These biofuels are mainly ethanol distilled from corn and biodiesel made from rapeseed, used cooking oil and tallow. According to Bailey, the growing reliance on sustainable liquid fuels will also increase food prices and biodiesel made from vegetable oil was worse for the climate than fossil fuels.

The research carried out for Chatham House says that reaching the 5% level (under EU law, biofuels are set to make up 5% of the UK’s transport fuel from today) means that UK motorists will have to pay an extra $700 million (€ 535 million) a year because of the higher cost of fuel at the pump and from filling up more often as biofuels have a lower energy content. If the UK is to meet its obligations to EU energy targets the cost to motorists is likely to rise to $2 billion (€ 1.5 billion) per annum by 2020.

Here you can read the whole report

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