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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 

Currently, the government is consulting on ways to bring the RTFO in line with the Renewable Energy Directive (RED; see EU policy). Items to be addressed include how the RTFO will meet sustainability criteria specified in the RED and how GHG calculations for biofuel supply chains are calculated.

EU policy:  Click here