RTFO clears final hurdle with House of Lords approval

6 Mar 2018 | Tim Worledge

In the end, it was as painless as the government said it would be – the revamped Renewable Transport Fuel Obligation order was passed unanimously through the House of Lords during the final stage of the Statutory Instrument process, Tuesday.

After many years in development and consultation, the final debate got off to an unpromising false start, when Baroness Sugg introduced the legislation “for consideration” only to be reminded by a fellow peer that "the Minister does not want them considered, but approved."

The changes to the RTFO, which will now come into effect from April 15, commits the UK to dramatically increasing the contribution of biofuels to the overall fuel mix from 4.75% to 7.25% in 2018, rising to 12.4% by 2032. 

It introduces targets for the biofuel contributions, reducing the presence of crop-based biofuels from 4% in 2018 to 2% by 2032, bolstering the contribution of waste-based biofuels and encouraging investment and development of advanced or development biofuels.

It also shortens Year 11 to an April 2018 to December 2018 timeline, and thereafter resets the annual cycle of the scheme from a financial year cycle to a calendar year cycle.

Baroness Sugg hailed the success of the RTFO to date, stating that the average greenhouse gas saving of a litre of renewable fuel last year was 71% versus petrol and diesel, Baroness Sugg recognised that the legislation was a long time coming.

“The Department has rightly taken time to build consensus in a controversial and complex policy area,” Baroness Sugg told members of the House of Lords.

“The regulations also strike a balance between maintaining support for an established UK biofuel industry, which faces challenging market conditions, and setting ambitious stretching targets to support new development fuels.”

No mandate for E10

However, Baroness Sugg confirmed that there would be no mandate for the introduction of petrol with up to 10% ethanol blended in, known as E10, something that the ethanol industry has pushed hard for in recent months.

Ethanol production stands to be hit hardest by the cap on crop-based biofuels, with much of the biodiesel production in the UK already coming from waste-based recycled oils.

“The Department is aware that the UK bioethanol industry and their partners would have preferred a different approach than the crop cap and are seeking support for a roll out of E10 fuel,” Baroness Sugg stated, providing some reassurance to the industry on the size of the market share ahead.

“These regulations will not contract the market for UK bioethanol made from crops and provides space for a market for E10 should suppliers chose to deploy it,” she concluded.

Putting the production figures into perspective, Baroness Sugg noted that the UK’s total ethanol production capacity is equivalent to just over 1% of total transport energy, and the current proportion is less than 2% of the UK fuel supply.

Tallow, is it me you’re looking for?

In the brief debate that followed, the changes were positively received on all sides of the political spectrum with questions focusing on whether there had been work done to ensure that there were enough waste-based feedstocks to continue to meet the country’s needs.

“We have carried out scenario testing to look at different waste supply scenarios and stakeholders have been very helpful in confirming that the required volumes of waste feedstocks we think we’ll need to meet the higher targets are likely to be available,” Baroness Sugg said, with with oily-wastes like used cooking oil and tallow likely to provide the bulk of the country’s increased needs.