British Government urged to keep biofuels tax break

A parliamentary motion has been tabled urging the British Government to review its proposal to remove the tax incentive on biofuels.

At present, biodiesel is taxed at £0.20 (€0.23) per litre less than fossil diesel. The government proposes to remove this incentive in 2010, instead fining oil companies whose fuel contains less than 5% biodiesel, generating revenue for the exchequer on two fronts.

But there will be no incentive for companies to use fuel with higher than the statutory minimum biodiesel content. The UK Sustainable Biodiesel Association (UKSBA) believes this will encourage firms that have recently switched to high-blend biodiesel, including fast food chain McDonalds and supermarket chain Morrisons, to revert to standard fuel from large producers. This will make life difficult for smaller niche producers of high-blend biodiesel.

‘Far from being the tax grab the Government hopes it will be, it will result in businesses closing, jobs lost and innovation stifled,’ said UKSBA chairman Mark Sneesby.

‘Biodiesel produced from waste cooking oil is a key fuel for the future, being both fully sustainable and renewable – I hope lots of politicians realise that and sign the motion.’

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