Motorists ‘face higher petrol costs’ to hit EU green targets
By Paul Homewood
The cost of the climate obsession continues to rise, as the Telegraph reports:
Families could have to pay an extra £40 a year to fill up their cars as Britain attempts to hit EU green energy targets, experts have warned.
Ministers have disclosed that they are drawing up new proposals to meet an EU requirement that 10 per cent of transport energy must come from renewable sources by 2020.
Experts say this is likely to require the introduction of new ‘green’ petrol that could add 1p per litre on to pump prices, and would also be less efficient.
Under the UK’s Renewable Transport Fuel Obligation (RTFO), most petrol currently includes almost five per cent renewable bioethanol, derived largely from crops.
This is likely to have to be doubled to 10 per cent before 2020 through the introduction of so-called ‘E10’ petrol, experts say.
In correspondence published this week, Patrick McLoughlin, the transport secretary, disclosed that the Government was preparing to consult this year on "legislative changes to the RTFO scheme… including a proposed trajectory for increasing the supply of renewable transport fuel to meet our renewable energy targets".
EU rules require Britain to get 10 per cent of its transport energy from renewable sources by 2020. Photo: Alamy
A Transport Energy Taskforce set up by the Department last year concluded that "displacing petrol with higher bioethanol levels" such as E10 would "probably be required" to meet the EU target, as well as increased levels of biodiesel in diesel fuels.
Rob Bailey, of the think tank Chatham House, said he estimated that "the incremental cost for a UK family could be around £40 a year for that strategy" because the fuels were less efficient.
"Our commitment to achieve the 10 per cent renewable transport target already requires doubling current biofuel supply at a further penny per litre on pump prices (in addition to the 1 pence currently added by the RTFO)."
Leaked Department for Transport memo
The Government has so far held off introducing E10 amid concerns about the cost to consumers and the impact on the owners of old vehicles that are not compatible with the fuel.
About 1.2 million vehicles are not compatible, according to the latest estimates from the Society of Motor Manufacturers and Traders.
Government sources last year vowed to resist the introduction of E10, which they described as Brussels’ "war on the British motorist".
But a leaked internal transport department document, published by The Ecologist last year, indicates the option is being considered.
It referred to the "potential roll-out of E10" and said: "Our commitment to achieve the 10 per cent renewable transport target already requires doubling current biofuel supply at a further penny per litre on pump prices (in addition to the 1 pence currently added by the RTFO)."
Ministers have raised concerns that biofuels sourced from crops may actually be worse for the environment if they displace food crops, resulting in other areas of woodland being chopped down.
"We certainly don’t want to increase the price of petrol, so we are looking at ways that that doesn’t have to happen."
In order to address this concern, the EU target effectively double-counts biofuels that are produced from waste, because they are more sustainable than biofuels from crops.
A Government source said ministers were still trying to find a way of hitting the 10 per cent EU target without increasing the proportion of biofuels in petrol, by instead switching to the double-counted waste-derived fuels, but that an increase could not be ruled out.
"We certainly don’t want to increase the price of petrol, so we are looking at ways that that doesn’t have to happen," they said.
But Mr Bailey, of Chatham House, said it was "highly unlikely" that the Government could hit the targets without switching to E10 fuel and would be "amazed" if they were able to source enough ethanol from waste to do so.
He pointed to research showing high costs of setting up new biofuel-from-waste plants.
The AA has also said it believes that "the UK will need at least E10 – 10 per cent ethanol in petrol – in the fuels mix in the future" in order to hit the targets.
Luke Bosdet, a spokesman for the motoring group, said if the Government did introduce the fuel it would have to be careful to avoid a repeat of the "debacle" seen in Germany, where many drivers were so concerned about E10 they initially boycotted it and switched to super-unleaded in volumes the fuel system was not able to provide.
He said: "Drivers must be fully informed that 90 per cent to 95 per cent of their cars can switch to E10 overnight."
He said the Government would also need to offer a financial incentive to drivers of up to 4p per litre by cutting fuel duty, in part to compensate for the "marginally lower fuel economy".
He pointed to research in Germany suggesting "potentially a 1 per cent to 1.5 per cent drop in miles per gallon".
Lembit Opik, the former MP and now director of communications for the Motorcycle Action Group, said bikers were concerned that E10 fuel would reduce performance, increase fuel consumption and so increase cost, as well as risking damage to engines.
A Department for Transport spokesperson said: "Biofuels have a role to play in keeping Britain moving but to reduce our greenhouse gas emissions they must be truly sustainable.
"We don’t want to see vast amounts of food crops being used as fuel, which is why the government is encouraging the development of fuels derived from waste, including £25 million to support three new waste biofuel plants across the UK.”
Any increase in the green costs of petrol could be easily offset by a fall resulting from the plunging oil price.
The RAC this week forecast that petrol would soon cost just 86p per litre – less than bottled water.
Two thoughts spring to mind:
1) Given the rapid fall in the price of petrol, surely the differential with the cost of biofuels is also going up. In which case, won’t the cost now be much more than a penny/litre?
2) Lembit Opik, as all Brits will know, was a Lib Dim MP, until 2010. His party was, and still is, at the forefront of emasculating the country on the twin crosses of climate change and subservience to the EU. Strange how he now sees things in a new light!