Biofuel quota (Renewable Transport Fuel Obligations)
Updated: 05.01.2019
Author: Georgios Maroulis
A quota system for biofuels is in place in the United Kingdom since 2007. Fuel suppliers for transport are obliged to satisfy a specified quota amount of biofuels in the total supplied fuel. There is a certificate system for providing proof of compliance.
Eligible technologies
Biodiesel and Bioethanol are eligible (art. 5 (2) (3) RTFO 2007).
| Biofuels | Biodiesel and Bioethanol are eligible (art. 5 (2) (3) RTFO 2007). |
|---|
Amount
| Amount of quota and period of application | Quotas are expressed in % of the total fossil fuel supplied by the obligated party. In case the supplied amount is less than 10 million litres, the first 450,000 litres are deducted (art. 4.4 – 4.5 RTFO 2007).
(art. 4 RTFO 2007 with subsequent amendments) For 2018 onwards the quota are defined according to the following table. Basically, there are two targets that need to be achieved: the “main obligation” and the “development fuel target” (art. 4 RTFO 2007 and art. 9 RTF and GHG Emissions 2018). Development fuels are considered renewable transport fuel which consists of a. biofuels which is eligible for double certificates b. biofuels made from sustainable wastes or residue (apart from segregated oils and fats) c. renewable fuels of non-biological origin (RFNBO) (art. 3 (2)(c) RTFO 2007 and art. 8 RTF and GHG Emissions 2018).
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Adjustment of quotas | Article 4 of RTFO 2007, setting the quotas, is amended with subsequent acts. Additionally, the maximum amount of renewable transport fuel derived from relevant crops which may be used to meet an obligated supplier’s renewable transport fuel obligation in an obligation period is also defined (art. 21A RTFO 2007 and art. 23 RTF and GHG Emissions 2018).
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees and penalty charges | In case the supplier does not own sufficient certificates, it will need to pay a penalty fee (“buy-out price”). This is calculated according to the following process: a. Calculation in litres b. Calculation the number of litres (if any) by which the fuels amount falls short of the amount needed to meet the supplier’s obligation c. Multiply of the shortfall by £ 0.30 (approx. € 0.34) for main obligation d. Multiply of the shortfall by £ 0.80 (approx. € 0.9) for the development fuel target and add both sums. The sum is the “buy-out amount” that must be paid to the Administrator (art. 21 RTFO 2007 and art. 22 RTF and GHG Emissions 2018). Where a supplier does not pay all of the buy-out amount to the Administrator before the end of the buy-out payment period, the unpaid buy-out amount carries interest of 5 percentage points above the base rate of the Bank of England. The interest is to be calculated on a daily basis for the period beginning on the day immediately after the last day of the buy-out payment period in question, and ending on the date on which payment is received by the Administrator (art. 17 RTFO 2007 and art. 18 RTF and GHG Emissions 2018). |
Addressees
Obligated Party: every transport fuel supplier who owns fossil fuel to be used in road vehicles, non-road mobile machinery (including inland waterway vessels, which do not normally operate at sea), agricultural or forestry tractors, or recreational craft which do not normally operate at sea and who supplies more than 450,000 litres of fossil fuel in the United Kingdom (art. 4 RTFO 2007).
Procedure
Process flow | 1 - Suppliers must apply for a Renewable Transport Fuel (RTF) certificate account no later than 28 days after having been indicated as an obligated supplier by the Authority (art. 7 (1) – 7 (2) RTFO 2007). 2 - With the account in place, obligated parties can apply for RTF certificates. After receiving such an application, the Authority checks that the supplied information is correct and that all requirements for applying outlined in art. 16 (1) – 16 (3) RTFO 2007 are satisfied (art. 17 RTFO 2007). 3 - If all information is correct and the requirements are satisfied, the Authority issues an RTF certificate to the obligated supplier. Each RTF certificate equals to one litre of supplied renewable fuel for transport (art. 17 RTFO 2007). Each RTF certificate must specify which of the following types of renewable transport fuel the certificate relates to:
Furthermore, the Authority is obliged to issue an additional certificate, if
4 - At the end of each obligation period, the Authority notifies the number of certificates that the supplier is supposed to have in order to satisfy its obligation (art. 21 RTFO 2007). In case the supplier does not own sufficient certificates, it will need to pay a penalty fee (“buy-out price”) to the Authority (art. 21 (7) RTFO 2007). 5 - The buy-out fees are collected into a buy-out fund, which is then re-distributed to all obligated suppliers according to the number of certificates they surrendered (art. 22 (3)(a) RTFO 2007).
|
|---|---|
Competent authority | The Office of the Renewable Fuels Agency (art. 6 (1) RTFO 2007). |
Distribution of costs
| Consumers | Costs may be passed to end customers through an additional amount on the fuel price. |
|---|---|
| Distribution mechanism |
|
United Kingdom
