My noble Friend the Minister of State for the Department for Transport, Lord Adonis, has made the following ministerial statement:

I have today published a consultation on slowing down the rate of increase of the Renewable Transport Fuel Obligation (RTFO) to 0.5 per cent. per annum, taking the level to 5 per cent. in 2013-14 rather than in 2010-11 as currently provided for in legislation.

This consultation fulfils a commitment made by Government in an oral statement by the then Secretary of State for Transport, my right hon. Friend the Member for Bolton, West (Ruth Kelly) on 7 July, where she emphasised that UK policy on biofuels will aim to ensure development of a sustainable biofuels industry.

Amid growing concerns about the potential indirect impacts of biofuels on food supplies and prices, on deforestation and on greenhouse gas emissions, the Government commissioned Professor Ed Gallagher, chair of the Renewable Fuels Agency, to lead a review of the latest evidence on biofuels. The review concluded that the Government should “amend but not abandon” its biofuel policy. The review also stated that “by 2020 biofuels have the potential to deliver greenhouse gas savings of 338 to 371 million tonnes of carbon dioxide” and that there is a “strong need for further evidence and monitoring to determine the sustainability and wider impacts of biofuels”. In short, the review concluded that there was a future for biofuels, but that Government should adopt a cautious approach until the wider environmental and social impacts of biofuels could be understood.

The Government agree with the recommendations of the Gallagher review.

As well as consulting on slowing down the rate of increase of the RTFO, we will also be consulting on the addition of two new eligible fuels under the scheme. We have asked for responses by 17 December.

In addition we continue to support the EU target of 10 per cent. renewable transport fuels by 2020, but will continue to argue that this target be subject to clear conditions, that the EU-level sustainability criteria address indirect, as well as direct, effects of biofuels and that the target is subject to rigorous review in light of the emerging evidence on the wider, indirect impacts of biofuels.

We are also continuing to engage with international partners and the scientific community to better understand how to define a good sustainable biofuel, and are committed to ensuring that this gathering of evidence on the indirect impacts of biofuels is fed into the ongoing debate across Europe and globally on how to encourage production of sustainable biofuels.

I can also announce that the Department anticipates contributing up to £3 million per year over the next two financial years to the Carbon Trust’s Advanced Bioenergy Directed Research Accelerator. This funding is subject to the initiative attracting high-quality bids that can be progressed to contract, as well as the approval of the Carbon Trust’s investment committee to proceed at each stage of the initiative. It will allow the Carbon Trust to further increase the materiality and impact of its advanced bioenergy research and development activities.

Copies of the consultation have been placed in the Library of the House and are available in the Vote Office and the Printed Paper Office.