Select Committee on Environmental Audit Appendices to the Minutes of Evidence


Memorandum from the British Association for Bio Fuels and Oils

  Set out below is stated Government policy and information as to how this can be supported by appropriate duty derogations for liquid bio fuels for road transport use. Appropriate evidence is appended.


  Budget Statement 1997: "The Government places a high priority on the use of the tax system to deliver environmental objectives".

  HMT Environmental Taxation Policy Statement 1997:

  The Government will aim to reform the tax system to increase incentives to reduce environmental damage.

  Liquid bio fuels (Bio diesel & Bio ethanol) are sustainable, renewable and safely bio-degradable. Harmful emissions are, on balance, far lower from bio fuels compared to fossil derived fuels. Reducing the excise duty on bio diesel and bio ethanol would be an excellent way to achieve cost effective environmental gains. (For supporting evidence see appendix.)

  FSBR 1998 5.43: states "the Government's desire to move towards a fairer treatment of petrol and diesel calculated on an energy or carbon basis"

  Bio diesel far outperforms fossil diesel and road fuel gases on a net carbon basis (carbon being re-cycled by the growing plant producing the raw material). Bio diesel is also a net producer of energy. For each unit of energy put into the process, around two units are produced on a sustainable basis. There is no other source of road fuel which actually doubles the energy available to the economy on a sustainable basis. (Ref 1)

  Fossil fuels, by contrast, are a finite resource, major producers of carbon dioxide and other pollutants and require energy for their production.

  Pre-Budget Report November 2000 HMT/DETR: "In the longer term, the challenge will be to ensure that Britain has cleaner, greener road transport. Today, the Chancellor invited industry to develop practical proposals for alternative environmentally friendly fuels and will announce major tax reductions in duty rates for the most promising of these fuels in Budget 2001".

  Such practical proposals will be coming forward. Equalising the duty rates for liquid bio fuels with those already given to road fuel gases would virtually ensure that the proposals were carried through. A reduction in the rate of duty for bio fuels would involve only a hypothetical loss of revenue to the Treasury as no duty is at present raised from these fuels.


    Unleaded Petrol 48.82p per litre

    High Octane unleaded Petrol (includes Bio ethanol) 50.89p per litre

    Ultra low sulphur diesel (includes bio diesel) 48.82p per litre

    DERV 51.82p per litre

    Liquid petroleum gas (LPG) per litre equivalent 7.50p per litre

    Compressed natural gas (CNG) per litre equivalent 11.35p per litre

  A duty rate for bio fuels of 10p per litre is, we submit, fully supported by the evidence of the environmental value of these fuels. Major EU countries (France, Germany, Italy, and Austria) already have such derogations.


  1.  Sustainability: All plant and animal life depends on the process of photosynthesis. Plants absorb sunlight and through the green catalyst chlorophyll absorb CO2 and thus achieve the growth, which sustains the animal kingdom. Fossil fuels are the result of photosynthetic activity millions of years ago and over millions of years. It is a matter of concern that these reserves of fossil fuel have been largely discovered and used up in the last 100 years, an immeasurably short time in a geological timespan.

  Fossil fuels come from our planetary Capital Account. Only bio fuels provide road fuels from the Current Account and so are sustainable and renewable.

  2.  Safety: Bio fuels are safely and easily biodegradable. In 21 days 95 per cent is harmlessly dispersed. A mineral oil spillage by contrast causes serious environmental pollution. (Refs MAFF, Castrol & ABI—Austrian Bio fuels Institute.) Bio diesel can actually be used to help disperse mineral oil slicks. (University of Wales, Bangor.) Bio fuels have a low flash point and are therefore safer to store than petrol, diesel or gas.

  3.  Energy balances: For bio diesel these are very positive. At least twice as much energy comes out of the process as is put in. (Ref 1). No other road transport fuel gives this positive gain. Bio ethanol is also energy positive but by a smaller margin. There is about a ten per cent gain in energy from bio ethanol production. (Ref 1).

  4.  Greenhouse Gases: Total emissions of greenhouse gases from the bio diesel life cycle are about 55 per cent of those from fossil diesel. (Ref 2). This after allowing for the emissions from all the industrial and agricultural activities involved in growing the relevant crops. For CO2, life cycle emissions are only about one fifth of those from fossil diesel. It is therefore clear that use of bio diesel would give a major reduction in greenhouse gases. Comparable though less comprehensive data shows bio ethanol to give comparable advantages a 95 per cent reduction in tailpipe emissions of CO2 being demonstrated by a 95 per cent bio ethanol/petrol blend. (Ref 2 Table 13).

  5.  Other air pollutants: bio diesel, bio ethanol and its derivative ethyl tetra butyl ester[1] (ETSE) have on balance, a better record on air pollution than fossil fuels. Tail pipe emissions are generally much better overall but the agricultural and industrial emissions detract from this benefit. On a life cycle basis, (mg/km), the figures are: SOx 20 per cent, (bio diesel contains virtually no sulphur and so does not have to undergo the processes required to make ultra low sulphur diesel); NOx 132 per cent; VOC (Volatile organic compounds) 51 per cent and CO 122 per cent, all as a percentage of fossil diesel. (Ref 2 Tables 4, 5, 6 & 7). The high NOx figure is mainly from agricultural machinery. However, improved industrial (mainly fertiliser) production process allied to improved husbandry techniques and higher yields are working to greatly improve the NOx mg/km figure.

  If farmers were enabled to use bio diesel instead of fossil diesel, the emission position would be dramatically improved. Unfortunately, the current tax structure (3.13p per litre for farm diesel) militates against this. Advancing injection timing can noticeably improve NOx emissions but possibly at the cost of higher particulate matter.

  Particulate matter from bio diesel on combustion is similar or slightly higher than fossil diesel. (Ref 3) and higher than from road gas. "Black smoke" emissions from bio diesel are less than from fossil diesel. There is evidence that the particulate matter from gas may be more harmful than previously thought—the smallest particles (PM10) which do the most damage by getting deepest into human lungs may be present in larger quantities in gas emissions than previously estimated. Particulate matter from bio ethanol combustion is negligible. Further research is needed particularly into the smallest particulate matter PM10 before firm conclusions can be drawn of the performance of the different fuels on this score.


  The technology needed for bio fuel production and use is fully developed and readily available. Bio diesel may be blended with fossil diesel and bio ethanol with petrol on a fully proven basis. In the short term, 2 or 3 per cent of both the diesel and petrol market could be supplied by bio diesel and bio ethanol respectively. The farmland is available. In the longer-term, over 5 per cent of road transport fuels could come from our own farms.

  Yields are rising to two tonnes of oil per ha. Half a million ha could be available to grow bio diesel out of the 4.7 million ha now under crops. This has a potential for 1 million tonnes of bio diesel or 5.8 per cent of the 17 million tonnes of diesel used annually in the UK. There is an immediately possibility to produce around 100,000 of bio ethanol annually. Over time this figure could be greatly increased especially if the technology is developed to produce the fuel from straw and other agricultural and forestry by-products.

  Bio fuels cost at present perhaps twice the figure for fossil fuels (before VAT and fuel duty). The gap is narrowing but the need now is for a duty derogation to recognise the environmental value of bio fuels and their derivatives (as has already been done for gas fuels). A liquid bio fuels industry should be established now as an energy efficient defence against further crude oil price rises. Without derogation, bio fuels cannot be competitive at the pumps. There is a widespread demand for bio fuels from the public as they are rightly seen as environmentally desirable.

  References: Note that the following three master references each contain a major list of secondary references.

  Ref 1  Energy balances in the growth of oilseed rape for bio diesel and wheat for bio ethanol. Levington Agriculture Ltd, June 2000

  Ref 2  Emissions from Liquid Bio fuels. ECOTEC Research & Consulting Ltd.

  Ref 3  Finanical and Environmental Impact of Bio diesel as an Alternative to Fossil Diesel in the UK.

November 2000

1   ETBE is a safe and practical addition to petrol as an oxygenate. It is widely and successfully used in the USA and France. MTBE is also used as a petrol additive but is being phased out because of severe ground water pollution problems established in the USA and elsewhere. About 100,000 tonnes of MTBE are used annually in the UK. It would be environmentally helpful if bio ETBE was substituted for MTBE. Back

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