The Government’s approach towards renewable energy has met mixed responses following last week’s pre-budget report.

NFU President Peter Kendall said Chancellor Gordon Brown’s pre-budget statement confirmed the NFU’s view that bio energy has “a real and growing role in the future of the country.”

However, farmer co-operative Framlingham Farmers said the Chancellor’s proposals were a “missed opportunity” for the country’s fledgling biofuels industry. The plans would also affect farmers by forcing up fuel costs, the firm added.

In his pre-budget report last week, Mr Brown said he would begin consultation on extending the 40p/litre discount on biogas and extend the 20p/l discount on ‘second generation’ biofuels.

‘Attractive proposition’

But he also increased the cost of fuel, including bio-diesel and bio-ethanol, by 1.25 pence/litre.

Mr Kendall said the possible extension of the 40p duty discount would make biofuel production a “more attractive proposition” to farmers.

However, Graham Aldrich, assistant purchasing manager of Framlingham Farmers, said the plans could deter people from entering the biofuels market.

While there is still going to be a 20p/l discount, our view is there should have been a 21.25p/l discount on biofuels.

‘Missed opportunity’

“If the government wants to encourage the use of biofuels, they need to show there’s a cost saving. It’s a missed opportunity.”

Mr Aldrich said the 600 members of Framlingham Farmers across England, who buy more than 21m litres of fuel each year, face an increase of £237,500 to their overall fuel costs.

“Their diesel will be more expensive,” he said. “The duty increases could hit farmers hard.”

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