RTFO Consultation Update

Posted in: biofuels

DfT sets out its plans to update and extend the remit of the RTFO

On 25 March the UK Department for Transport published its log-awaited consultation on its proposals for how it intends to align UK support for biofuels alongside that of its Europe partners to implement the revised Renewable Energy Directive (RED), but also how it intends to extend the remit of the UK’s Renewable Transport Fusel Obligation.

The consultation exhibits a balance in seeking as far as possible to maintain uniformity with its European partners to facilitate trade in biofuels while also ensuring that new and emerging sectors are effectively catered for as the UK seeks to drive further transport decarbonisation.

Recognising that electrification will gradually reduce the overall size of the fuel pool and introduction of E10 later in the year could result in delivery of ethanol at the expense of waste-derived biodiesel, (which delivers high greenhouse gas savings (GHG)), DfT is proposing to increase the biofuel obligation on fossil fuel suppliers over time, rising to 12.1% of UK transport fuel use (by volume) by 2032 and beyond, which represents a 2.5% increase in the 2032 target. By this move it hopes to maintain progress on driving the difficult process of reducing GHG emissions from transport.

In a European lead, the UK is also proposing to support Recycled Carbon Fuels (RCFs) where these are derived from the fossil portion of refuse derived wastes or industrial off-gas that would otherwise have been combusted for power generation and also deliver development fuels that can assist ‘hard to decarbonise’ sectors such as aviation.  This is welcome news for interests in waste gasification technologies. Supported technologies will have to demonstrate that the GHG savings delivered are better than energy from waste applications.  The target GHG saving required will also increase over time from 50% up to 65% by 2030 for all producers.  Reward levels will be set lower than for renewable development fuels, at the equivalent of 0.5 development RTFC’s per litre.

DfT is also consulting on the potential to allow Power Purchase Agreements to be used to evidence ‘additional’ renewable power trading across the grid to support production of renewable fuels of non-biological origin (RFNBOs). DfT is also looking to extend support for use of RFNBO’s in maritime applications and use of hydrogen in fuel cells for off-road use (previously an excluded use).
DfT is also looking to seal off some reward routes including hydrogen production from biomethane without carbon capture and sequestration (CCS), which would otherwise be eligible for dRTFC’s.  DfT deem that without CCS this should not be considered as an advanced conversion process and therefore ineligible for elevated levels of support.

Many of the other proposals represent opportunities to tidy up the RTFO legislation,  bring it into line with the revised RED and improve definitions of sustainable feedstock and land use.  A new move is the proposal to introduce a valuable GHG credit for biomethane generation from slurries and manures (to reward better manure management) which will help to drive down the GHG impacts of derivative fuels. However, in contrast to the RED, DfT will not permit the averaging of GHG’s for fuels from feedstocks with different GHG characteristics.  So it will not be possible to use such credits to improve the value of low GHG biomethane.

Overall, there are few real surprises as many of the proposals had previously been discussed with industry, but the extension to applicable fuel types and uses and the intention to introduce recycled carbon fuels will be welcomed along with the additional certainty provided to UK renewable fuel producers and developers.

For more information:

This article was written by David Turley, NNFCC Director and Lead Consultant for Renewable Fuels.

You might also be interested in: