Embargo: 00:01 Monday 20 November 2006

Contact: Owen Williams 020 7219 8659


In a report published today, a House of Lords select committee says that Britain is not on course to meet European targets for the use of biofuels in road transport and asks the Government to consider whether further tax incentives will be needed to promote biofuels use.

The Committee does, however, commend the Government for its decision to introduce a national Road Transport Fuel Obligation, which will require fuel suppliers to ensure that 5% of their UK sales are from renewable sources. They urge the European Commission to follow suit and to amend the Biofuels Directive to require all Member States to introduce similar measures in order to help meet biofuels targets.

The committee also calls for an EU certification process to ensure that imported biofuels have not consumed more greenhouse gases in their production than they save when they are used.

In its report the House of Lords European Union Committee concludes that the three-year old EU Directive setting targets for biofuel use isn't proving effective in many Member States. It notes a statement by Environment Minister, Lord Rooker, that Britain is "miles behind" its target for 2010, whereas France, Germany and Sweden are on course to meet theirs.

Though the Committee does not advocate indiscriminate subsidies to prop up markets, it does suggest that, if biofuel use in road transport is to expand and make a contribution to the reduction of greenhouse gases, Government intervention will be necessary in at least the short term in order to provide assurance to investors that production will continue to be financially viable. The Report points out that countries that are leaders in promoting the use of biofuels use significant tax concessions to achieve this. The Committee asks the Government to take note of this and to consider whether further incentives will be appropriate in this country.

The report notes that, while many EU Member States are promoting biofuels in order to help achieve independence in energy supplies, others - including the UK - have put environmental considerations at the top of their priority list. While the Committee strongly supports this stance, it sounds a note of caution - that there is a need to balance the environmental cost of growing cheap biofuels (particularly where, as in the case of Brazil, they are being grown on cleared rainforest land) against the gains in carbon emissions from their use. The report therefore calls for an EU-wide carbon certification system to ensure that the right balance is struck.

Commenting, the Chairman of the Committee, Lord Renton of Mount Harry, said:

"Within the last few weeks we have seen Sir Nicholas Stern's warnings about the environmental consequences of carbon emissions. Increasing Europe's use of biofuels has a significant role to play in dealing with this problem.

"Britain is however falling short of its targets on the use of biofuels. We welcome the Government's decision to introduce a Renewable Transport Fuels Obligation - and, indeed, we would urge the European Commission to require all Member States to introduce similar measures. But some of our European partners offer significant tax concessions to stimulate investment in biofuels. We ask the Government to consider whether more should be done in this area here.

"Already advances in technology are pointing to new biofuels, more efficient production methods and wider applications, including in the aviation industry. We believe that the EU can add real value here by promoting research, facilitating good practice and encouraging the market. If we are serious about our environment, we should seize this chance."

Notes to Editors

1. The report will be published by The Stationery Office, The EU Strategy on Biofuels: From Field to Fuel, House of Lords European Union Committee (Sub-committee on Environment and Agriculture), 47th report of 2005/06, HL Paper 267.

2. The report will be available shortly after publication at: