A government move to increase its target for biofuel use could cost motorists £460m over the next 12 months, a think tank says.
Since 2008, the UK's Renewable Transport Fuel Obligation has required suppliers of road transport fuels to blend a certain proportion of biofuel into the petrol and diesel they supply.
But from today the government will raise its target for biofuel use to 5 per cent of transport fuels, the most ever consumed in the UK, and new research from Chatham House estimates this will prove expensive for motorists and consumers.
The £460m figure represents the increased cost of fuel from higher prices at the pump and the need to fill-up the car more often because biofuels have lower energy content, and further increases to comply with EU biofuels targets mean this could triple to around £1.3bn a year by 2020.
The report, The Trouble with Biofuels, by Rob Bailey, senior research Fellow of the Energy, Environment and Resources Department at Chatham House, argues this does not represent good value for money.
Bailey said: “Current biofuels are at best an expensive way of reducing emissions. At worst they produce more emissions than the fossil fuels they replace and contribute to high and unstable food prices. Policymaking needs to catch up with the evidence base.”
The fuel’s green credentials have been called into doubt as well, after the research found that typically the cost of emissions reductions from biofuels are several times what the government has identified as an appropriate price to pay.
Expanding biofuel use is also leading to higher food prices and increased volatility in the market as food crops are displaced by fuel crops.
This has damaging implications for food security in poor countries and is also likely to contribute to higher emissions, as farmers respond to higher prices by expanding production, sometimes into rainforest.
After incorporating these “indirect emission” effects, the analysis found that biofuels produced from vegetable oils are likely to be worse for the climate than fossil fuels.
There are currently no safeguards in UK or EU biofuel policy for dealing with the indirect impact of biofuels on food security and deforestation and without these, the UK will not be able to meet its EU obligations sustainably.
But, according to the report, reversing policies on bio-fuels may be difficult due to the “dependencies and well-organised special interests” created by agricultural subsidies from the EU and national governments for biofuel production.
“It has become increasingly difficult for governments to revise biofuel policies in response to growing evidence of their adverse impacts on land use and food security,” wrote Bailey.
“The biofuel lobby now extends beyond farmers and dedicated biofuel producers to include major oil companies, agribusiness, seed and input companies.”