16 March 2001

BABFO attacks tax cuts

BIODIESEL tax cuts announced in last weeks Budget have been slammed by the British Association of Bio Fuels and Oils.

The 20p/litre cut in duty, introduced by Chancellor, Gordon Brown, to help offset high production costs, still leaves biodiesel saddled with 25p/litre of duty in the UK. That is too high, says BABFO chairman Peter Clery.

"We welcome the Chancellors recognition of biodiesel as a fuel, but the 20p reduction granted is quite inadequate. We need parity with road gas fuels, which are now proposed to be taxed at 6p/litre."

Fossil fuel road gas is non-renewable, and the emissions profile is worse than that of biodiesel, he adds. "This is clearly unfair. It gives a degree of favouritism to the gas industry and does down farmers."

Mr Clery believes MAFF advice to the government not to support the biofuel industry is behind the limited cut, and oil company lobbying could also have been a factor.

Other countries in the EU have zero duty rates on biofuel. German production will soon hit 1m tonnes a year, says Mr Clery. The UK could produce a similar amount, representing 6-7% of the countrys derv requirement. "Processing plants are no problem, they are already here. ICI has a plant that could switch tomorrow," he says. &#42