UK government proposes to increase RTFO buy-out price
A UK government consultation has begun to ensure the continued decarbonisation of road transport fuels through the supply of renewable fuels under the Renewable Transport Fuel Obligation (RTFO).
According to the Department for Transport, biofuels supported under the RTFO have successfully reduced greenhouse gas (GHG) emissions from transport over the last 12 years and will make up a third of the UK’s transport carbon budget contribution.
Carbon budgets are made under the Climate Change Act, and every tonne of GHG emitted between now and 2050 will count.
Where emissions rise in one sector, the UK will have to achieve corresponding falls in another. In 2018 biofuels reduced carbon emissions from transport by over 3.5 million tonnes.
However, recent increases in the cost of biofuels relative to petrol and diesel mean that there is a risk that suppliers will ‘buy-out’ of their obligations to supply renewable transport fuel. This would result in lost GHG savings and a gap in UK carbon budgets as well as risking long-term impacts on the UK biofuels industry.
The government proposes to increase the RTFO buy-out price to ensure the continued supply of biofuels and other renewable fuels and the GHG savings they deliver.
The government said this would reduce the risk of obligated suppliers choosing to buy-out thereby maintaining GHG savings and providing greater certainty of support to the UK renewable fuels industry.
The government is aiming to introduce any changes that results from the consultation from 1 January. In order for this to happen legislation will need to be laid before Parliament in October.
According to the Department for Transport, biofuels supported under the RTFO have successfully reduced greenhouse gas (GHG) emissions from transport over the last 12 years and will make up a third of the UK’s transport carbon budget contribution.
Carbon budgets are made under the Climate Change Act, and every tonne of GHG emitted between now and 2050 will count.
Where emissions rise in one sector, the UK will have to achieve corresponding falls in another. In 2018 biofuels reduced carbon emissions from transport by over 3.5 million tonnes.
However, recent increases in the cost of biofuels relative to petrol and diesel mean that there is a risk that suppliers will ‘buy-out’ of their obligations to supply renewable transport fuel. This would result in lost GHG savings and a gap in UK carbon budgets as well as risking long-term impacts on the UK biofuels industry.
The government proposes to increase the RTFO buy-out price to ensure the continued supply of biofuels and other renewable fuels and the GHG savings they deliver.
The government said this would reduce the risk of obligated suppliers choosing to buy-out thereby maintaining GHG savings and providing greater certainty of support to the UK renewable fuels industry.
The government is aiming to introduce any changes that results from the consultation from 1 January. In order for this to happen legislation will need to be laid before Parliament in October.
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