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Volume 461: debated on Thursday 21 June 2007

I have today published a consultation paper setting out the Government’s draft proposals on the detail of the environmental and sustainability reporting requirements for the proposed Renewable Transport Fuel Obligation (RTFO). Copies have been placed in the Libraries of both Houses. The consultation closes on 13 September 2007.

The consultation seeks views on matters such as:

the scope and format of monthly and annual reports;

the verification requirements; and

the default values to be used to calculate the carbon savings offered by different biofuels where specific data is not available.

Final decisions on the precise reporting requirements will be a matter for the Office of the Renewable Fuels Agency which will be established by the RTFO Order as the Administrator of the RTFO.

The RTFO’s carbon and sustainability reporting requirements are a necessary first step on the road to linking the issue of certificates with mandatory carbon saving and sustainability requirements. In the light of the responses we have received to our earlier consultation on the design of the RTFO and the recent G8 communiqué which reinforces the need to establish international biofuel quality standards and avoid the possible negative side effects of biofuel development, I am today announcing that the Government:

aims to reward biofuels under the RTFO in accordance with the carbon savings that they offer from April 2010, provided that this is compatible with World Trade Organisation rules and EU technical standards requirements, and is consistent with the policy framework being developed by the European Commission as part of the review of the biofuels directive, and subject to consultation on its environmental and economic impacts.

aims to reward biofuels under the RTFO only if the feedstocks from which they are produced meet appropriate sustainability standards from April 2011, subject to the same provisos and consultation as above and subject to the development of such standards for the relevant feedstocks.

will continue to work closely with out partners at a national, European and international level to develop robust standards for ensuring the sustainability of biofuels and to ensure that early consideration is given to the WTO implications of the UK’s policy intentions.

will ask the RTFO Administrator to report to the Secretary of State every three months on the effectiveness of the RTFO’s environmental reporting mechanisms, and on the carbon and sustainability effects of the RTFO. The Government will keep the RTFO under review in the light of these reports.

intends to set stretching indicative targets for the level of carbon and sustainability performance expected from all transport fuel suppliers claiming certificates for biofuels in the early years of the RTFO. These targets, which are included in the consultation paper we are publishing today, cover:

the level of greenhouse gas savings that we expect to see from the biofuels used to meet the RTFO;

the proportion of those biofuels that we expect to come from feedstocks grown to recognised sustainability standards; and

the amount of specific information that we expect to be included in sustainability reports.

has asked the Low Carbon Vehicle Partnership (LowCVP) to explore the feasibility of a voluntary labelling scheme to allow responsible retailers to show that their biofuels are genuinely sustainable. Any scheme would need to be compatible with WTO rules.

Moving to mandatory carbon saving and sustainability requirements would require changes to the RTFO Order which, under the Energy Act 2004, would be subject to consultation.

The Government will make a further announcement in due course on how they intend to respond to the other issues that stakeholders have raised in response to the February 2007 consultation on the design and future evolution of the RTFO.