UK sets out policy to raise biofuels blends through 2032

In the UK, following years of policy uncertainty and market stagnation, the U.K.’s Department for Transport has announced its intention to raise the target under the Renewable Transport Fuel Obligation, paving the way for future growth of the U.K. biofuels industry.

The government response to its consultation on proposed amendments to the RTFO order has indicated that the target level under the obligation will rise to 7.25 percent from April 2018, further increasing to 9.75 percent in 2020 and to 12.4 percent by 2032. By providing long-term certainty, the department hopes to encourage future investment in a sector that investors have been steadily losing faith in.

However, the government has imposed restrictions on how this target can be met, limiting the contribution that crop-based biofuels can make towards the obligation to 4 percent in 2020, steadily declining to 2 percent in 2032. This will inevitably place a significant demand on waste biofuel feedstocks, notably on used cooking oil. Waste oils already provide close to 700 million liters of the U.K.’s biodiesel supply, with consumption likely to more than double over the next few years if targets are to be met. Over the longer term, demand for waste feedstocks will continue to increase as the RTFO target level increases and crop cap reduces, posing a potential risk to circular economy efforts to reduce waste generation. Due to these conflicting interests, it remains vital that robust verification processes are enforced to ensure that waste biofuels are produced from legitimate waste streams.

Meanwhile, there remains criticism from industry that the crop cap is too low and that it could unnecessarily restrict the market for biofuels that can demonstrate significant GHG savings and provide a meaningful contribution to the U.K. economy, such as wheat bioethanol. There are equally concerns that this policy will limit the U.K.’s competitiveness with other EU member states likely to enforce a crop cap set at 7 percent, as mandated under the EU Indirect Land Use Change Directive.