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Oil majors slow to take up sustainable biofuels

Articles / Biomass
Posted by gfoat on Jan 26, 2011 - 08:12 AM

Big oil companies bringing biofuel to the UK market are not doing enough to ensure that it is delivering carbon savings and being produced in a sustainable manner.

BP, Chevron, Murco, Total, INEOS and Morgan all missed all three sustainability performance targets set as part of the Government’s Renewable Transport Fuel Obligation (RTFO). Murco failed to report any fuel meeting the RTFO’s Environmental Qualifying Standard and Prax failed to have its sustainability data verified. At the other end of the scale, Greenergy, Lissan, Mabanaft and Topaz1 met all three targets. These results are contained in a report to Parliament published today (25 January 2011) by the Renewable Fuels Agency (RFA), which assesses the impacts of biofuel supplied in the second year of the Renewable Transport Fuel Obligation (RTFO)2.

The report shows that industry as a whole is not keeping up with escalating targets designed to encourage more sustainable biofuels. Just 31% of biofuel feedstock met a Qualifying Environmental Standard, well below the target of 50%.
The majority of suppliers also missed the GHG target of 50%, but the RTFO as a whole achieved 51% savings compared to fossil fuels3.

Despite the poor performance by many, the report also identifies suppliers who are demonstrating what can be achieved. Greenergy and Shell undertook independent sustainability audits of Brazilian sugar cane with Shell also carrying out independent audits of German oilseed rape. Lissan and Topaz supplied all of their fuel from wastes and by-products. There are also many companies supplying
only biofuels and meeting all three sustainability targets – this includes all companies supplying solely biodiesel from used cooking oil or tallow.

The RFA’s CEO Nick Goodall said, “We've seen some progress from suppliers in meeting the challenge of sourcing their biofuels responsibly, but in many cases it has been disappointingly slow. Too many are lagging behind and dragging overall performance down.
With mandatory sustainability criteria due to be introduced with the Renewable Energy Directive (RED), companies currently missing all three targets need to make a step change in performance.” The implementation of the RED across the EU will require that biofuels are guaranteed not to have been grown on recently deforested or highly biodiverse land, potentially favouring those oil companies who have already built relationships with suppliers. There are indications that the market for certificate trading has begun to mature.

Renewable Transport Fuel Certificates (RTFCs) traded in much greater volumes than last year and added real value to the sector.
In Year Two, three cases were detected where companies had failed
to register with the RFA within 28 days of becoming obligated suppliers, failing to meet their legal requirements. The specific details of these cases and RFA decisions on whether to impose Civil Penalties are discussed in the Annual Report and covered in a separate release available on the RFA website.

Year Two of the RTFO has seen an increase in reported numbers of both biofuel feedstocks (mainly cereals, sugar and oilseeds) and their countries of origin. The report includes analysis of the most common sources, looking at the sustainability impacts of agricultural production and opportunities for improvement.

It also looks at how governments and policy makers in the EU and beyond have reacted to new evidence on the issue of indirect land use change (iLUC).
The RFA’s Head of Carbon and Sustainability Aaron Berry said: “The iLUC issue is not going to go away because it raises uncertainty about how biofuels are really delivering on reducing carbon emissions. Biofuel suppliers need to consider the risk of indirect effects and what they can do to reduce them.”

In October 2010 the Government announced its intention to abolish the RFA as part of a wider review of public spending. The functions of the Agency are to be transferred to the Secretary of State for Transport when the abolition takes place.

The full report and supporting studies, containing a wide ranging examination of the impacts of UK biofuel use, are available
at: [1]

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