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Apr 2021

RTFO reform draft under consultation

The Department for Transport (DfT) launched last week a public consultation opened until April 23: “Amending the Renewable Transport Fuels Obligation (RTFO) to increase carbon savings on land, air and at sea”. We review here the main features of the proposal, which marks the strong will of the DfT to quickly implement a more ambitious biofuel policy.

The chief amendment proposed by the DfT is to increase the main obligation (excluding the development fuel) from the current 9.6% vol to a higher level. The following options are proposed to stakeholders:

  • Option 0: no change.
  • Option 1: 1.5% increase. From 2022 the obligation would jump to 11.1% vol and stay the same thereafter.
  • Option 2: 2.5% increase. In 2022, the obligation would go up by 1.5% to 11.1% with an additional 1% progressive increase between 2023 and 2032, when it would reach 12.1%.
  • Option 3: 5% increase. In 2022, the obligation would rise by 1.5% to 11.1% with an additional 3.5% progressive increase between 2023 and 2032, when it would reach 14.6%.

The DfT’s preferred option is the n°2, as it believes the means to increase renewable content in the fuel mix (E10 from Sep-21, room within B7, high blends, bio-LPG and increasing share of waste- derived biofuels) will reasonably allow the higher target to be reached. This is a very positive news for the biodiesel market, which was threatened by the E10 introduction, the growing potential for more DC on the ethanol segment, and the uncertainty about the diesel pool evolution.

The proposal also contains the following changes that could be enforced from 2022:

  • Extending the scope of the RTFO to include recycled carbon fuels (RFCs) with a min. 50% GHG reduction eligible under the development fuel sub-target. Authorized feedstocks should include the fossil content of refuse-derived fuel and waste process gases from industry; RCFS from solid and gaseous feedstocks would receive 0.5 and 1 dRTFC/lt, respectively.
  • Restraining the eligibility of hydrogen made out of biomethane to advanced technology only (such as processes making use of carbon capture and storage).
  • Making Renewable Fuels from Non-Biological Origin (RFNBOs), such as hydrogen, used in maritime, rail and non-road vehicles, eligible for the development fuel sub-target.
  • Introducing changes for sustainability criteria including min. GHG reduction requirements and specific requirements for fuels produced from forest biomass.