UK biofuel suppliers fall short of sustainability targets

London, 28 January: Several major suppliers of transport fuel in the UK failed to meet the sustainability criteria for biofuels in the first year of the government’s pioneering Renewable Transport Fuel Obligation (RTFO). 

Investment bank Morgan Stanley, which is responsible under the RTFO for the large Grangemouth refinery owned by Ineos, and Topaz, the Irish fuel supplier, failed to meet any of the government’s three sustainability targets. Shell and Esso met two of the targets but Chevron and Total met only one.

BP reported meeting two and Murco said it met one of the targets, but the data from these two companies was deemed not to meet the required standard. Three large suppliers – ConocoPhillips, Greenergy and Mabanaft – met all three targets.

“Too many are lagging behind,” said Nick Goodall, CEO of the Renewable Fuels Agency (RFA), which today issued its report into the first year of operation of the RTFO. “With mandatory sustainability criteria due to be introduced by the end of 2010, companies like Morgan Stanley and Topaz need to make a step change in performance,” he added. The first year of the RTFO ended in April 2009 and Goodall warned that “it seems likely that most suppliers will again fall short of the government’s targets for 2009/10.”

The three targets set by the government concerned the percentage of feedstock meeting environmental standards; the annual savings in greenhouse gas emissions compared with fossil fuels; and reporting of data on the renewable fuel’s characteristics.

Overall, only 20% of the biofuel supplied was verified as meeting the environmental standards, against a target of 30%. The targets for data reporting and emissions savings were comfortably met, but the RFA admitted that the latter may have been overstated as there was no attempt to account for the impacts of indirect land-use change.

The RTFO obliges refiners and importers of road transport fuels that supply more than 450,000 litres/year to include a certain minimum percentage of biofuels. The target percentage in 2008/09 was 2.5% by volume and this was met, with 2.7% (1.3 billion litres) actually supplied. The target for 2009/10 is 3.25%.

The RFA claims it is the first regulator in the world to monitor and report verified information on the carbon and sustainability performance of biofuels. It believes the mandatory EU-wide Renewable Energy Directive will use a similar methodology to the RTFO with regard to biofuels.