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.
A. POLICIES AND
Budget Statement 1997: "The Government
places a high priority on the use of the tax system to deliver
HMT Environmental Taxation Policy Statement
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
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.
B. APPENDIX AND
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 & ABIAustrian 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
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
(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 thoughtthe 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.
C. GENERAL EVIDENCE
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
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
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.
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