UK Sustainable Biodiesel Alliance rallies for retention of tax support

Posted October 20, 2009

The UK Sustainable Biodiesel Alliance is stepping up its campaign to prevent the British government from removing the 20 pence per litre tax differential for biofuels from April 2010.

Speaking at the European Biofuels Expo and Conference 2009, Chair of the UKSBA Mark Sneesby, told how the government's plan to remove the tax differential for biofuels in 2010 would undermine the U.K.'s growing low-carbon economy by making biodiesel more expensive than fossil fuels and therefore commercially unviable.

Green captive fleet operators such as McDonalds and 3663 First for Foodservice, who currently use high-blends of biodiesel in their vehicle fleets, could see fuel bills rise by as much as 20 percent. Any ensuing reduction in demand would have a massive impact on U.K.-based sustainable biodiesel producers supplying these high-blend users.

The British government plans to remove the tax differential from April 2010, relying instead on the Renewable Transport Fuel Obligation as a supporting mechanism for the biodiesel industry. However, early misdrafting of the RFTO and continuing consultation around its form given the European Renewable Energy Directive mean that it is not yet a sufficiently robust mechanism to support the emerging sustainable biodiesel sector.

Uncertainty around Government policy in this area is preventing adequate business planning for U.K.-based producers and preventing incoming investment in to the green economy of UK PLC from abroad.

Mark Sneesby said:

"The UKSBA has been formed to create a voice for the sustainable biodiesel producers in the U.K. who are working with green companies committed to making a real difference in the reduction of carbon emissions. The use of high-blend sustainable biodiesel in these fleets is delivering 85 to 90 percent carbon savings against the equivalent fossil fuel, with the minimum of technological change and it is happening now.

"Many renewable solutions, such as wind or nuclear, require long-term investment and take many years to fulfil their potential, whilst the sustainable biodiesel industry is an established and growing economic sector delivering real results in reducing CO2 emissions and providing 'green collar skills.'

"The UKSBA is in ongoing constructive discussions with HM Treasury and the Department for Transport as well as other policy makers in Westminster and Europe, proposing that the tax differential is not withdrawn until the RTFO is stable and actually working as a supportive mechanism for the industry.

"We have suggested that any tax support should be targeted towards only fully sustainable producers and high-blend users, to ensure that public money is not supporting biofuels produced from unsustainable sources.

"Longer term, we have also proposed that the UKSBA contributes to the 2010 consultation around the RTFO, to ensure that it becomes the intended robust mechanism for ensuring the long-term development of the biofuels industry in the U.K.".
For further information about the UKSBA's campaign contact:

Zo� Anderson
The Whitehouse Consultancy for UKSBA
Tel: 020 7793 2536 or [email protected]

SOURCE: UKSBA