UK: Blow to introduction of greener fuel as oil firms face production delay

Government plans for the introduction today of cleaner fuel on all the country’s forecourts have been thrown into turmoil, with the oil companies ready to offer biodiesel but warning they will not have bioethanol available for greener petrol until the beginning of next year at the earliest.

Already hit by mounting concerns about the impact of biofuels on food prices, ministers have had to accept that oil companies are not ready to meet the target of 2.5% of all forecourt petrol being derived from crop-based sources as required under their Renewable Transport Fuels Obligation (RTFO).


The UK Petroleum Industries Association says its members will still be able to meet their responsibilities under the new legislation because they would double the amount of biodiesel used – 5% a year – to ensure that the 2.5% of all fuel sales come from crops.

“It’s just a matter of timing,” according to a spokesman, who said bioethanol required more work to be done at distribution terminals compared to biodiesel.

But industry experts claim oil companies have been reluctant to spend money on bioethanol because it is expensive compared to biodiesel. The latter is very cheap in Britain due to a glut of US imports and “splash and dash” operations which take advantage of a subsidy loophole. They involve traders taking biodiesel from Europe to the US just to mix it with ordinary diesel and attract a subsidy, before bringing it back to Britain and the continent.

Guardian