Duty differential for Used Cooking Oil biodiesel will continue for two years from April 2010

According to Renewable Fuel Agency’s 2008/9 figures, the UK used 1,029 M litres of bio-diesel in UK transport, of which approximately 65 M Litres were produced from UK feedstock, and of which 34 M Litres were manufactured from UK Used Cooking Oil (UCO).

The government initially announced plans in the 2008 Budget to remove a 20 pence per litre duty differential for all bio-diesel from 2010, arguing that the tax discount could not distinguish between sustainable bio-fuels and those that raise greenhouse gas emissions or raise wider sustainability concerns.

The UK Sustainable Biodiesel Alliance (UKSBA), which represents producers, users and supporters of sustainable biodiesel, has welcomed the announcement in the Pre Budget Report (PBR) 2009 that the duty differential for Used Cooking Oil biodiesel will continue for two years from April 2010.

Remove the 20p per litre tax differential for bio-diesel from 2010 would make sustainable biodiesel more expensive to purchase than fossil-based road fuels. The largest price increase would be felt by high-blend users such as 3663 First for Foodservice, McDonalds and Morrisons, who may find it is no longer commercially viable to use sustainable bio-diesel in their fleets and forecourts. The reduced demand would force the closure of production businesses and facilities, substantially reducing the UK’s carbon savings and resulting in the importation of bio-diesel in order to meet stringent EU targets. Green jobs and skills related to bio-diesel production would transfer to other countries, seriously impeding the development of the UK renewables sector.

Since its formation in June, the UKSBA has been campaigning against this tax increase, arguing that systems exist that can make the necessary differentiation, particularly for Used Cooking Oil, which is derived from a waste product and offers high levels of sustainability.

The Pre-Budget Report has acknowledged that biodiesel from Used Cooking Oil is highly sustainable and should be treated differently, a result welcomed by Mark Sneesby, Chair of the UKSBA. Mark said: “Transport is the only sector of the UK economy where carbon emissions are still rising and sustainable biodiesel has a significant role to play in helping to reduce this. The retention of the duty differential until March 2012 means that the industry has the chance to build on the 3 million tonnes of CO² already being saved via sustainable biodiesel and that companies that use high blends of UCO based biodiesel in their captive fleets and on the forecourt can continue to do so.

“With the Pre Budget Report coming in the same week as the start of the UN Climate Change Conference in Copenhagen, this announcement shows that the government is willing to stand behind the UK’s innovative UCO based biodiesel industry and act on rising carbon emissions from transport. The UKSBA’s members and supporters are delighted that the government has listened to industry and chosen to act.”

Related categories:  Biodegradable waste   Biofuels and biomass   Environmental legislation   Environmental technologies for Transportation 

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