Biofuels

Biofuels High on Political Agenda

The Treasury has called for more dialogue with MPs and lobbyists campaigning for a drop in tax on biofuels, reported Farmers Weekly online.

Environment minister Michael Meacher attended a reception to discuss the issue on Wednesday (11 December).

The event, called Green Power from Britain's farmers, attracted more than 40 MPs and peers to Westminster.

The aim of the reception, hosted by the Country Land and Business Association, was to highlight the campaign for a 26-30ppl reduction in tax on fuel from crops.

Interested parties included Friends of the Earth, the National Farmers' Union, British Sugar and the Bioenergy Alliance.

Economic Secretary to the Treasury John Healey said the cross-party support they had won was a "pre-requisite to making policy change".

"It's made it a much better informed debate in parliament and ensured our policy has been widely consulted and based on evidence," he said.

"That process meant the Chancellor could propose a drop in the tax on bioethanol by 20ppl.

"The call is always for more. I can't promise success, but I can promise dialogue and would welcome it."

A 5% inclusion of bioethanol into petrol would generate a demand of 1.25m tonnes per year for the green fuel.

A 2% inclusion would cost the Treasury £200m a year in lost revenue, and reduce carbon dioxide emissions by one million tonnes.

Experience in Germany suggests the economic inflow generated would recoup three-quarters of the cost back into Treasury coffers.