Producers hit bytargeterror
A LOOPHOLE in legislation governing the amount of biofuel at the pumps could hit Teesside producers.
The introduction of the Renewable Transport Fuels Obligation in April, which made it mandatory for all petrol and diesel to contain 2.5% biofuel, kick-started the industry by putting a floor in the market for biodiesel and bioethanol - both of which will be produced on Teesside from next year.
But in October, the Government discovered that it had effectively halved the target for biofuels due to a legislative error. It said it intended to correct the mistake in next year’s Budget, when the Government is in any case expected to reign back on previously announced increases in biofuel targets, following the Gallagher Report which urged a cautionary approach earlier this year.
But Ian Waller of the biofuels consultancy Five Bar Gate in Yarm, which works closely with the biofuels industry on Teesside, said action was needed now to restore the current target and called on the Government to abandon any plans to tamper with the biofuels escalator next year.
“Halving targets on a scheme half way through the operating year is retrospective,” he said. “There will [already] be knock on effects in 2009/10. Whatever they do in the longer term, the Government should delay any further changes until 2010.
“Industry needs a chance to recover from the consequences of this mistake.”
Paul Thompson, policy analyst at the Renewable Energy Association, agreed, saying: “The REA is working hard to persuade the Government to reconsider,” he said.
“At present, the Government still intends to implement the slowdown in targets recommended by the Gallagher Review. By effectively halving this year’s obligation the Government has already more than implemented the slowdown.
“In the light of the current chaos, the Government should not make any changes to targets for next year.”
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