Draft RTFO legislation enters UK parliament as April deadline looms

The draft version of the legislation detailing proposed changes to the UK's Renewable Transport Fuel Obligation has been presented in parliament, a spokesperson at the Department for Transport said Monday.

The move is the first milestone in the process, as the government attempts to push the renewal of the RTFO through a congested legislative landscape and against a tight timeframe.

The changes to the RTFO impact Renewable Transport Fuel Certificates, a key measure within the RTFO to leverage and influence the deployment of biofuels within the energy mix, with the changes due to be active from the moment the legislation is passed.

The proposed changes are intended to address a number of concerns around biofuels by driving adoption of waste-based biofuels via an increasing mandate through to 2032, and cutting the potential for crop-based biofuels to feature in the mix by reducing the mandate.

Biofuels should contribute 7.25% of the UK's road fuel pool from April 2018, with 4% coming from crop-based biofuels and the balance 3.25% drawn from waste-based.

By 2032, the overall mandate will increase to 12.4% with crop-based biofuels contributing just 2% of that total and waste-based biofuels 7.6%.

The new scheme also introduces a requirement for advanced, or development, biofuels to be introduced in 2019 at 0.1%, building to 2.8% by 2032.

The legislation is intended to be implemented by April 1, although effectively that date is March 29 when the house rises for the Easter break, and there are still a number of parliamentary stages for the legislation to clear before it is passed.

With just two and a half months to go before the deadline, market participants affected by the RTFO have expressed concerns that the legislation was off track and may be delayed as the government juggles with the implementation of competing priorities such as the country's departure from the European Union.

That in turn has created uncertainty that has weighed on the market and seen limited trading activity on the UK's RTFC markets.

"The changes to the RTFC legislation are still completely on track and both pieces of legislation will be implemented by April 2018," the spokesperson at the Department for Transport said, referring to the changes to the RTFO and the Greenhouse Gas Reporting Regulations that are part of the same initiative.

"The draft legislation was laid in parliament today," she added.

Devil in the detail

Although in draft form, the government has tabled the legislative change as a Statutory Instrument - a form of legislation that enables changes to be made without subjecting the legislation to the usual process that a Bill might take.

As an SI, the RTFO changes will be passed directly to a committee in the House of Commons and then on to a second committee in the House of Lords before becoming legislation.

The spokesperson reiterated that the government remains on course to bring the legislation into law before the April 1 start.

Note: This article was updated to reflect the status of the legislation as a Statutory Instrument - a previous version published online incorrectly stated it was introduced as a Draft Bill.