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UK - Policy

UK

The Renewable Transport Fuel Obligation (RTFO)  is the UK’s current biofuel policy instrument. The RTFO is monitored by the Renewable Fuels Agency (RFA) and came into operation in April 2008 with the aims of reducing greenhouse gas emissions from transport and promoting biofuel usage in the UK. 

The initial RTFO target for inclusion of renewable biofuel in all UK road transport fuel was set at 5% for 2010. However, the UK targets have changed and a "slow down" (see below) has been implemented so that the 5% target will now be achieved in 2013/14.

The new RTFO targets for the next five years were implemented in April 2009.  These new levels are based on the recommendations of the recent independent Gallagher Review looking into the indirect effects of biofuel production, commissioned by previous Transport Secretary Ruth Kelly.  One of the main recommendations to come from the Review was that the rate of increase of the RTFO be slowed down to take into account concerns of sustainability (v.v. Indirect Land Use Change and the indirect GHG effects of inelastic biofuel co-product substitution).

The RTFO operates through a system of certification, whereby Renewable Transport Fuel Certificates (RTFCs) are issued to companies based on their renewable fuel sales/usage (fuel suppliers are obliged to meet RTFO targets if they release more than (or equal to) 450,000 litres of fuel onto the market).  The certificates are tradable on the market so that all companies may achieve their obligatory targets, or if not pay a "buy-out" penalty price of 15ppl (from April 2010 this buy-out penalty is 30ppl). The UK government has, historically, provided a 20ppl tax incentive for biofuel use. However, this incentive is to be removed in April 2010. 

For more information on the RTFO: Click here 

           The yearly RTFO biofuel inclusion targets are as follows:

     For the latest RFA RTFO reports: Click here 

The RTFO is currently being adapted to take into account requirements of the Renewable Energy Directive (RED; see EU policy). The Renewable Fuels Agency have published guidance on how to make sure that biofuels produced currently (April-Dec 2010) can be indicated to be 'RED-ready'. This status will change to 'RED compliant' when RED sustainability criteria and emissions savings become mandatory (Dec 2010 onward) and when further information is provided from the European Commission. Biofuel supply chains will have to comply with the RED from Dec 2010. 

There is currently a consultation process underway on how to deal with indirect land-use change (iLUC; Sept-Oct 2010). For a detailed explanation of iLUC, its surrounding issues and Life Cycle Analysis please visit the biofuelsnow website here. 

EU policy:  Click here