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Draft Renewable Transport Fuel Obligations (Amendment) Order 2009

The Parliamentary Under-Secretary of State for Transport (Jim Fitzpatrick): My noble Friend the Minister of State for the Department for Transport, Lord Adonis, has made the following Ministerial Statement.

I have today published an addendum to the Department for Transport’s consultation on proposed amendments to the Renewable Transport Fuel Obligations Order 2007 (SI 3072) to slow down the rate of increase of the
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Renewable Transport Fuel Obligation (RTFO) and to add two new fuels to the renewable fuels eligible for certificates under the scheme, launched on 15 October. This addendum proposes additional amendments to rectify a discrepancy recently identified in the 2007 Order and to delete provisions from the Order as a consequence of changes to the Hydrocarbon Oil Duties Act 1979 made by the Finance Act 2008.

The discrepancy concerns the definition of “relevant hydrocarbon oil” in the Order. This definition identifies the category of fossil fuel which must be taken into account when determining whether a supplier is subject to the RTFO and if so, how many certificates showing supply of renewable fuel the supplier must produce. The intention was that the definition of “relevant hydrocarbon oil” should include fossil fuel that is blended with biodiesel or bioethanol as well as fossil fuel that is supplied unblended and this is how the Order has been interpreted by the Renewable Fuels Agency and suppliers. However, the current drafting of the definition does not include fossil fuel that is blended with biodiesel or bioethanol before it passes the point at which the requirement to pay duty takes effect. This means that only fossil fuel that is supplied separately from biodiesel or bioethanol or is blended after it passes the duty point can be counted.

The addendum I have published today proposes additional changes to the 2007 Order to rectify this discrepancy so that the fossil fuel component of bioblend and bioethanol blend supplied from the beginning of the next RTFO obligation period, April 2009, will count towards the obligation. Due to the constraints of the primary legal powers we will not be able to amend the Order retrospectively to change the definition for this obligation year and the department is advising fuel suppliers of this fact.

The consultation period for the addendum is shorter than normal and ends on 17 December, the date that the consultation launched on 15 October ends. Any amendments to the RTFO Order are subject to the affirmative resolution procedure and the shorter consultation period is necessary to ensure that the amendments can be included in a single draft Order which can be laid and debated in Parliament before it is made to come into force in April 2009. The nature of the amendments is such that a shorter consultation period is appropriate. The amendments to deal with the discrepancy give effect to what was previously thought to be the meaning of the Order and the other amendments are purely consequential and do not change the meaning of the Order.

The content of this addendum does not affect any of the other issues which are the subject of the consultation launched on 15 October—proposals on slowing down the rate of increase of the RTFO and on the addition of two, new, eligible renewable fuels under the scheme. The Government remains committed to ensuring that UK biofuels policy promotes development of a sustainable biofuels industry, by proceeding with caution until the wider environmental and social impacts of biofuels are better understood.

Copies of the letter to stakeholders and attached addendum have been placed in the Libraries of the House and are available in the Vote Office and Printed Paper Office.

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Work and Pensions


The Parliamentary Under-Secretary of State for Work and Pensions (Jonathan Shaw): My noble Friend the Lord McKenzie of Luton has made the following statement:

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