The renewable transport fuel obligation should ensure that 5 per cent. of UK road transport fuel sales will be made up of renewable fuel by 2010. This will represent approximately 2.5 billion litres of biofuel and it is expected that this will be supplied from a mixture of domestic and imported feedstocks. To meet a 5 per cent. fuel obligation entirely from UK sources in 2010, we estimate that between 1 to 1.5 million hectares of land would be required depending on a range of factors including crop yields, fuel extraction rates, the technologies employed and the market split between petrol and diesel. However, this does not take into account the utilisation of co-products from biofuel production, for example in animal feed, which will reduce the overall land requirement. In the longer term, advanced technologies for processing feedstocks should also help to reduce the land requirements.
UK farmers will be able to compete in this market, and a number of major new biofuel production plants are at the planning and construction stage in various parts of the UK. We understand that several of these are anticipating making use of home-grown biofuel feedstocks. However, much will also depend on the ability of UK farmers to compete on price and quality with overseas producers.