Cost and supply fears as chancellor questions benefits of biofuels

19 March 2008

Chancellor Alistair Darling has increased the cost of running bus services using biofuels, and put the supply of sustainable biofuels at risk, it has been claimed.

Darling said he would withdraw the current 20p per litre duty incentive for biofuels from 2010/11, ending the incentive introduced in 2002 to encourage biofuels. Instead, support for biofuels would be provided by oil companies which, from 2010/11, will be required to ensure that 5% of fuel sold to motorists comes from renewable sources.

A spokesman for Stagecoach, whose 7,000-bus fleet runs on a 5% biodiesel mix (B5), said the removal of the incentive ‘will add to the cost of running our bus services’. The bus service operator grant would only cover 80% of the rise, and this came at a time of rising fuel prices. But, while the move, and the planned increase in fuel duty, would increase the costs of providing services, the firm was ‘committed to continuing with our efforts to reduce carbon emissions’.

A trial by the company in Kilmarnock was testing the feasibility of using a 100% biodiesel mix, B100, produced from tallow and used cooking oil, which would qualify for an 100% rebate from the Government under the bus service operator grant.

The company would evaluate, after a six-month trial concluding next month, the fuel efficiency and performance, and the impact on engines.

The Environmental Industries Commission said that ending the duty incentive was ‘not guaranteed’ to encourage greater use of biofuels. Merlin Hyman, director, said that oil companies were allowed to either make a ‘buyout’ payment, instead of sourcing the biofuel, or provide non-sustainable biofuel.

The chancellor recognised last week that the greenhouse gas emission savings of biofuels were significantly reduced when processing, transport and land change were taken into account (Surveyor, 13 March).

Hyman said: ‘We need to stimulate production of sustainable biofuel. It’s fantastic to reuse cooking oil, but you can’t meet 5% of our road fuel needs from this source.’

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Cost and supply fears as chancellor questions benefits of biofuels

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