Diesel has been in the spotlight over the last few months, with numerous media reports on emissions from road vehicles and the resulting impact on air quality and public health in cities all around the UK.
Only last month, the mayor of London, Sadiq Khan, introduced his £10 daily ‘Toxicity Charge’ (T charge) for cars built before 2005, aiming to reduce Nitrogen Dioxide (NOX) and particulate matter levels in the capital. BMW, Ford and Renault have also recently announced diesel car scrappage schemes on some older engines offering owners up to £6000 for their old cars.
Support for diesel cars dates back to the 90s when the government backed a major switch from petrol to diesel cars in a bid to reduce CO2 emissions. In recent times, however, the emphasis has flipped from carbon savings to air quality issues with diesel engines now becoming the villain.
Despite this, the Government are still recognising the need for diesel, in particular biodiesel, in the fuels market. They are backing this up with their recent consultation guidance on the renewable transport fuels obligation (RTFO) setting out new targets to 2032.
The renewable transport fuels obligation (RTFO) is a government policy which currently requires the fuel suppliers (Shell, BP etc.) to ensure that 5% of the petrol and diesel at the pump comes from renewable sources, in particular waste. The market for renewable fuels, such as bioethanol (blended into petrol) and biodiesel (blended into diesel), has remained at this level since 2012, meaning that over 95% of the transport fuel mix is still non-renewable fossil-based.
The government have now upped the targets for renewable transport fuels to reach 9.75% by 2020 and 12.4% by 2032. This means that the demand for biodiesel as a percentage of the demand for fossil diesel will nearly triple in the coming 18 years and the work we do at Olleco will become more important than ever before.
The Crop Cap
In addition to these renewable targets, the government are also showing their support to prioritise waste-based biofuels over those derived from crops. Biodiesel produced in our Liverpool facility is created through the conversion of used cooking oil (UCO) collected by our fleet. Biodiesel can, however, also be produced from crop-derived oils such as rapeseed, palm and soya bean.
The government already encourage the use of waste-derived biofuels by ‘double counting’, meaning they are worth twice as much by volume when blending with fossil fuel to meet renewable targets. In addition to this, the government has committed to further support waste-derived fuels by decreasing the amount of crop biofuels that can be counted towards the transport targets from 4% in 2018 to 2% by 2032. This cap will limit the amount of biofuels created from crops and thus further support the industry to produce fuel from waste.
A bright future
The picture is therefore not as gloomy for biodiesel as one may think from reading the headlines!
We as part of Olleco, the largest collector of UCO in the UK, are in a strong position to grow and help the UK to reach the targets to achieve a low carbon future.