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Volume 448: debated on Thursday 6 July 2006

To ask the Chancellor of the Exchequer what steps are being taken through the taxation system to encourage the production and availability to the motorist of biodiesel. (82322)

The Government are committed to supporting biofuels as part of a long-term strategy to promote low carbon transport. The Budget announced the extension of the 20 pence per litre duty differential for biofuels until 2008-09, and set out a range of announcements about the Renewable Transport Fuel Obligation, which will begin in 2008-09 and will ensure biofuels comprise 5 per cent. of the road fuels market by 2010-11. Furthermore, we are awaiting state aid clearance to introduce an enhanced capital allowance (ECA) for the cleanest biofuels production plant, to support innovation and help develop the lowest-carbon biofuels production methods.