17 November 1995

Vote Labour calls follow biofuel tax exemption refusal

By Liz Mason

FURIOUS biodiesel supporters are urging growers to vote Labour at the next election after government refused to exempt the fuel from excise duty.

Paymaster general, David Heathcoat-Amory, examined the case put forward by the British Association for Biofuels and Oils for a seven-year exemption from the tax, to be introduced from Dec 1, and rejected it.

"The government remains of the view that this business cannot be sustained commercially without continuous duty relief and cannot enter into such a commitment," he said in a letter to BABFO.

Frank Paton, BABFO chairman, said the decision was entirely wrong and he accused the government of being "bankrupt of money, ideas and leadership".

An EU directive allowed a tax exemption for pilot plants. But Mr Paton accused the government of wanting nothing to do with Europe. He said the decision to reject the case for exemption was a political one and had to be dealt with politically.

Labour had a policy commitment to a move to 20% renewable energy by 2010 and "if you want biodiesel you had better vote Labour", he said.

BABFOs case to government argued that the price of the biodiesel and conventional diesel would converge in about 10 years time.

It claimed that fossil fuels would become more expensive and biofuel production costs would decline as hybrid varieties with higher yields were introduced.

BABFO also suggested that a 0.2p/litre increase in the duty paid on black diesel would more than pay for a biodiesel tax exemption without any loss to the Exchequer.

Mr Paton also warned that excise duty would preclude people from importing the fuel, which would mean that there would be no biodiesel available in the country. That meant no trials could be carried out and the UK would continue to lag behind other EU countries. &#42

Lorries, like this one, carrying bio-diesel made of OSR could stay a rarity.