Campaigners have warned that the Treasury can expect 50 days of opposition ahead of a planned April tax rise on sustainable biodiesel made from used cooking oil.
They say the Government’s decision that will leave thousands of professional drivers and car fleets – including more than 1,000 cabbies in London – out of pocket.
Campaigners have warned that the decision will make UCO biodiesel production uneconomic, and will force fleets and independent drivers to either absorb the additional cost or convert back to fossil fuels – leading to higher carbon emissions, millions of litres of used cooking oil being poured down the drain, and potentially thousands of job losses from biodiesel producers, suppliers and consumers.
The Treasury will apply the 20 pence tax increase on UCO biodiesel from midnight on April 1 to implement a decision announced by Chancellor George Osborne during the 2011 Budget.
This decision involves raising taxes on UCO biodiesel whilst offering double certificates under the Department for Transport’s complicated Renewable Transport Fuels Obligation (RTFO).
Campaigners have claimed that there is insufficient evidence to show that the replacement of the differential with RTFO certificates will sustain the industry – pointing instead to market prices that show certificates trading for half the differential price and the fact that the RTFO does not support high blend users such as HGVs and taxis.
They have called on the Chancellor to defer the removal of the differential to allow a proper assessment of the consequences to be made and to consider how the £8m committed to by the Treasury in the Autumn Statement for investment in low emission technologies for HGVs could be used to support already proven technology.
Tracey O’Keefe, director of the UK Sustainable Biodiesel Alliance and Co-ordinator of the Save our Sustainable Biodiesel Campaign, said: “At a moment when the Government is desperately looking for any kind of economic growth, the Chancellor is driving a thriving UK industry off a cliff.
“The tax differential has proved to be tremendously effective, yet the Treasury is undermining years of good work by needlessly putting hardworking firms out of business. This is hardly in keeping with the ‘year of enterprise’ that the Prime Minister has said he wishes to see.
“We’ll be campaigning up until the clock strikes midnight on 1 April. It is a reasonable request that a decision of this importance should be backed up with sufficient evidence. The Treasury doesn’t have it and with only 50 days left I hope they realise the flaws in their plan before it’s too late.”
FleetEnergyWatcher - 10/02/2012 17:59
Useful fact about used cooking oil (UCO): Heathrow airport, with 76,000 staff, 68 million passengers passing through each year, and scores of food outlets, produced all of 156 litres of used cooking oil per day in 2009. Over a year, that’s equivalent to 0.00006% of the UK’s oil consumption. Even scaled up across all suppliers, the potential contribution of UCO to fleet mobility and sustainability will never exceed ‘infinitesimal’. The main beneficiaries of the biodiesel tax break are food fryers, who avoid potential waste disposal charges, and the owners of the conversion plants – which seem to be strategically sited for the North Sea ports, allowing them to arbitrage worldwide differences in UCO and biodiesel prices. If the commercial winds change, a lot of our tiny supply of UCO-biodiesel could easily end up in vehicles on the other side of the world. Still, the UK UCO-biodiesel collection and distribution business is a minor source of jobs and economic activity. And while its dire predictions of its own imminent death are undoubtedly exaggerated, there doesn’t seem to be much point in hobbling it still further with a tax rise that, in the grand scheme of things, will make barely any perceptible impact on Government revenues. All the same, the Save our Sustainable Biodiesel Campaign might want to avoid over-egging the pudding as they re-run their 2009 campaign. After all, if UCO deserves a tax break, what doesn’t?