Three oil companies meet UK biofuels standard

Web exclusive posted Jan. 19, 2009, at 3:33 p.m. CST

Only a handful of companies have met the goals of the United Kingdom's Renewable Transport Fuels Obligation as of the first half of the reporting year, according to the U.K.'s Renewable Fuels Agency. The Renewable Fuels Agency was established in 2007 when the RTFO order was enacted to administrate the legislation.

The RTFO has set targets of 30 percent of biofuels meeting environmental sustainability standards, achieving greenhouse gas (GHG) savings of 40 percent and report more than 50 percent of the data asked for by the Renewable Fuels Agency.

In its first mid-year report, the agency said three companies obligated to report were above all three of the 2008-'09 targets, ConocoPhillips Co., Greenergy International Ltd. and Mabanaft Ltd. Another five companies failed to supply any fuel meeting sustainability standards. Those included: Chevron Corp., Esso, Murco Ltd., Prax Petroleum and Topaz. Overall, 20 percent of the biofuels supplied to the U.K. market met environmental sustainability standards, well below the 30 percent goal.

"We believe that biofuels should be sustainable," said Renewable Fuels Agency Chief Executive Officer Nick Goodall. "The first-half year's experience of the RTFO in the U.K. and the good performance of several companies are demonstrating that the biofuels industry can meet sustainability standards. The challenge for us now is to raise performance across the board."

During the reporting period, Greenergy imported the first Brazilian sugarcane-based ethanol to meet the RTFO sustainability criteria. The sustainable biodiesel reported to the Renewable Fuels Agency was sourced from U.K. rapeseed production, as well as Indonesian and Malaysian palm oil audited against the criteria developed by the Roundtable for Sustainable Palm Oil. All tallow and waste vegetable oil-based biodiesel are considered sustainable as waste-based feedstocks.

The RTFO is using the established British standard for sustainable crop production, the Assured Combinable Crops Scheme. The ACCS standards protect carbon stocks and biodiversity and ensure that air, water and soil quality are not degraded. The RTFO issues certificates that are fully tradable. An obligated company can meet its obligation by supply biofuel itself, purchasing certificates from other suppliers, or paying a 15 pence-per-liter buyout price (83 cents-per-gallon). The RTFO obligates refiners, importers and other suppliers handling more than 450,000 liters (just under 120,000 gallons) of fossil fuels to meet the government targets. Smaller biofuel companies that supply little or no fossil fuel can also claim RTFO certificates. Nearly all of these companies met all three targets, according to the Renewable Fuels Agency.