North West Biofuel Network meeting

Explaining the role of sustainable biofuels in DfT's wider transport strategy.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Norman Baker

Norman Baker MP, Parliamentary Under-Secretary of State for Transport gave a video address to members of the North West Biofuels Network on 7 December 2011. As part of the growth review he was able to announce £8 million capital funding to pump prime procurement of low emission heavy goods vehicle technologies and their supporting infrastructure. Biofuels speech


Thanks to Anne for inviting me to participate in this meeting of the North West Biofuel Network. And even though I’m not there in person I hope to offer you some ‘fuel for thought’ today.

Now biofuels is a fascinating topic to be discussing from my perspective. Not only do these fuels have a vital role in our efforts to tackle climate change but our attitudes towards them mirror our attitudes towards sustainability as a whole.

I am encouraged to see the work that has been done in the North West through initiatives such as BIONIC. Decarbonising road transport fleets is key to reducing the overall carbon emissions from transport, and it is important that we share lessons learnt in this area.

Today, I’d like to explain the role of sustainable biofuels in our wider transport strategy and how we will incentivise biofuels made from wastes.

At one time biofuels were championed as an end in themselves, the answer to petrol or diesel. But we now realise that whilst sustainable biofuels have a place within our wider strategy to create growth and cut carbon there is no single quick-fix solution.

As part of our strategy we’re implementing the transport elements of the Renewable Energy Directive (RED) which requires us to source 10% of energy used in transport from renewable sources by 2020.

Implementation will mean that only biofuels meeting the Renewable Energy Directive sustainability criteria benefit from incentives under the Renewable Transport Fuel Obligation, with double rewards for waste-derived biofuels and advanced biofuels.

Subject to the Parliamentary process these changes to the Renewable Transport Fuel Obligation (RTFO) will come into force on 15 December.

Given concerns about the sustainability and deployment of biofuels we are not in a position to amend the targets set out in the current Renewable Transport Fuel Obligation. But we will consult in 2012 on possible changes to the percentage of biofuel required to be supplied for the period 2014 to 2020, in 2012.

My role as minister is to ensure that we have a settled policy framework based on good scientific evidence around sustainability, which maximises benefits of biofuel deployment across modes.

As part of this, there is a need to ensure that indirect impacts of biofuel production are taken into account.

There is compelling evidence that shows that indirect land use change is a significant issue. Ensuring that biofuel policy achieves significant carbon reductions requires that action is taken to address this issue.

I have called on the European Commission to take action in the Renewable Energy and Fuel Quality Directives to address this issue in a robust way. I expect them to come forward with a proposal shortly, if they do not do so I will seek to spur on their work and secure a robust solution to these concerns across the EU.

I am confident though that we are well prepared in the UK for changes required by the directive for reporting against mandatory sustainability criteria.

Now we already have a Renewable Transport Fuel Obligation which has been in place since 2008. But until now reporting on carbon and sustainability has only been on a voluntary basis. It meant the administrator had to work closely with ‘obligated’ suppliers to ensure they are fully prepared to meet the directive’s sustainability criteria. As a result, in April, we were able to announce we were ‘RED-ready’.

Through carbon and sustainability reporting under the Renewable Transport Fuel Obligation suppliers have shown that it is possible to provide verification of the supply of sustainable biofuels.

It is important that we consider how best to use finite resources and reward fuels which do not compete with food supply, such as those produced from wastes.

Across government we are committed to increasing energy from waste and are working collectively to consider how best to maximise the benefits of waste energy in transport.

Our legislation implementing the Renewable Energy Directive will provide additional support to the production of advanced biofuels and those derived from waste by awarding 2 Renewable Transport Fuel Certificates for every litre of this biofuel that is supplied. This will provide double the support awarded to these biofuels as compared to sustainable crop-derived biofuels.

Biodiesel made from used cooking oil is clearly an important sustainable transport fuel, and we don’t want to intervene where biofuels from waste oil are a commercial reality already.

The volume of used cooking oil supplied and sourced in the United Kingdom has risen significantly under the Renewable Transport Fuel Obligation since the scheme was introduced in 2008.

Used Cooking Oil is now the largest reported biofuel feedstock in the UK, accounting for around 30% of the total supply in 2010 to 2011, compared to around 3% in the previous year.

My Treasury colleagues confirmed in this year’s budget that the duty differential for biodiesel produced from used cooking oil will end on 31 March 2012. This incentive was introduced in Budget 2010 as a temporary measure.

I appreciate that there are concerns regarding the fluctuation of the value of Renewable Transport Fuel Certificates, given that they are determined by the market. So we will continue to monitor the support provided under the Renewable Transport Fuel Obligation and we will also keep under review double certification to ensure that it is having a positive effect on the Used Cooking Oil industry. The government is also minded to use the buy-out fund revenues to support the production of waste-derived or advanced biofuels and will look to introduce this mechanism to the Renewable Transport Fuel Obligation in due course.

I am though encouraged that recent auction data shows Renewable Transport Fuel Certificates for use in the 2011 to 2012 obligation period selling for just over 20 pence per litre.

We launched a targeted consultation on Renewable Transport Fuel Obligation guidance in November setting out what we propose to be wastes and residues under the amended Renewable Transport Fuel Obligation.

The consultation closed on 4 December. We are examining responses and will produce final Renewable Transport Fuel Obligation guidance for suppliers and verifiers shortly.

We will of course be working with suppliers over the coming months to provide training and advice on the changes to reporting under the Renewable Transport Fuel Obligation.

I recognise the importance of biomethane made from waste as a sustainable renewable transport fuel, particularly in the heavy duty vehicles sector where there are few other options for reducing carbon emissions.

We have sought views from the freight sector on the use of low carbon technologies including biofuels such as biomethane and are looking at what we can do in this area as part of the growth review following suggestions made by industry to the Secretary of State for Transport.

There are real market barriers to uptake of low emission heavy goods vehicle technologies such as hybrid, electric and gas. These barriers centre around a lack of industry confidence in the technologies and an unwillingness to take on the risks of investment.

We are therefore making available £8 million capital funding to pump prime procurement of low emission heavy goods vehicle technologies and their supporting infrastructure. The funding includes £6.5 million for a low emission vehicle demonstration trial plus the supporting infrastructure for trial vehicles, coupled with £1.5 million targeted funding for public gas refuelling hubs. We will launch a competition for this funding in March 2012 and will consult with all interested parties on the scope of the competition over the course of the next three months.

Biofuels are though just one part of a wider strategy to encourage growth and cut carbon. For example, we are also committed to supporting the uptake of ultra low carbon vehicles in the United Kingdom.

£400 million has been made available for consumer incentives to purchase plug-in vehicles, a program to support recharging infrastructure and targeted research, development and demonstration projects.

In June, we published a comprehensive electric vehicle recharging infrastructure strategy that sets out how we are ensuring that plug-in vehicles are an attractive choice for the motorist, how we are making it easier for individuals to charge their vehicles and making it easier for the both the private and public sector to provide recharging infrastructure by removing regulatory barriers.

With significance to the potential use of hydrogen we have also noted the Automotive Council Technology Roadmap which outlines the high level consensus among UK industry of what technology is required to decarbonise road transport in the UK.

Demonstration projects, such as the Technology Strategy Board’s low carbon vehicles project and the TfL hydrogen bus demonstration, will perform a key role in supporting industrial growth and informing our understanding of these technologies.

We published a local transport white paper which recognises that the best way in the short term to reduce emissions at the local level is to encourage people to make more sustainable travel choices for shorter journeys.

And the new Local Sustainable Transport Fund will enable local government, working in partnership with their communities, to provide a range of measures supporting economic recovery and reducing carbon.

We have also invested close to £50 million to bus operators - through the Green Bus Fund - to provide around 540 new, low carbon buses by April next year.

And ‘greening’ our railways - by electrifying commuter lines, reducing consumption per train and proposing a high speed network as a genuine alternative to domestic air travel.

To conclude I am clear we will only be successful in our transport strategy if we effect behavioural change and provide genuinely sustainable transport. This means that we have to listen and share lessons learnt. Which is why the work of networks such as yours is so important.

The need for such cooperation is particularly true in biofuels given these are a finite resource which we need to consider how best to deploy, on road transport and other modes. A sustainable world can only be achieved through agreement with others - government, the transport sector, and networks such as this working as one.

My challenge is to set a policy framework which both incentivises sustainable biofuels and enables us to adapt to constraints. Such as those on the capacity of vehicle fleets and the supply infrastructure to exploit future fuels.

In summing up, we’re taking the same approach to biofuels as we are to sustainability in general. By providing clarity, by ensuring choice, by encouraging co-operation we believe we can change the environment and bring people with us on this journey towards a more sustainable world.

I believe we’ll get there. But to prove anything’s possible let me end on this quote:

The use of vegetable oils for engine fuels may seem insignificant today. But such oils may become in course of time as important as petroleum and the coal tar products of the present time.

Who said it? None other than the inventor of the diesel engine himself - Rudolph Diesel.

Published 7 December 2011