Campaigners have accused the Treasury of ‘not doing its homework’ after analysis by the Save our Sustainable Biodiesel campaign identified a lack of demand for biodiesel certificates, calling into question the Treasury’s plans to switch incentives for used cooking oil biodiesel from April 1, 2012.

Analysis of data from brokers covering 90% of biodiesel certificate trading has revealed little trading of certificates since the New Year, with millions of certificates going unsold and certificate prices dropping as low as 11 pence.

The Chancellor of the Exchequer is due to increase the tax on sustainable biodiesel produced from used cooking oil by 20 pence per litre from April 1, and will instead offer, as an alternative incentive, double certificates under the Renewable Transport Fuels Obligation.

Campaigners have warned that the latest analysis shows that the Treasury’s plans are unworkable and will fail to maintain biodiesel prices, forcing many producers, suppliers and users out of business.

Used cooking oil biodiesel is currently used by approximately 10% of the UK’s heavy good vehicles and by 1,000 taxis in London alone.

The SOS Biodiesel campaign is calling on the Chancellor to reverse or at least defer his decision to allow proper research on the effect of the change in incentives to be properly assessed.

Tracey O’Keefe, director of the UK Sustainable Biodiesel Alliance and co-ordinator of the SOS Biodiesel campaign, said: “These findings show very clearly that the Treasury simply hasn’t done its homework, and is completely wrong if it believes it can hike up tax on biodiesel and put a different measure in place without adverse effects on the industry.

“Were the Chancellor to go ahead with this plan, he would be hammering a nail into the coffins of many businesses within an industry that once lost will be very difficult to build again.

“There is simply no benefit to pressing ahead with this change without the proper research to support it, and we urge the Chancellor to reconsider before it’s too late.”

Key findings of the SOS Biodiesel analysis were as follows:

• An auction held on 20 January received no bids for eight lots of certificates
• Year 4 certificates were valued at 13 pence at the end of January
• Year 5 certificates were valued at 10-11 pence at the end of January
• Three million certificates were sold for 11 pence per certificate
• No certificates of the 21 million on offer were sold at an NFPA auction that took place on 16 February
 

More articles on: