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Consultation Renewable Transport Fuel Obligations Order 2007 Consultation On The Draft Renewable Transport Fuel Obligations Order 2007 February 2007 Consultation on the Draft Renewable Transport Fuel Obligations Order 2007 The Department for Transport has actively considered the needs of blind and partially sighted people in accessing this document. If you have other needs in this regard, please contact the Department. Department for Transport Great Minster House 76 Marsham Street London SW1P 4DR Telephone 020 7944 8300 Web site www.dft.gov.uk © Crown copyright, 2007. Copyright in the typographical arrangement rests with the Crown. This publication, excluding logos, may be reproduced free of charge in any format or medium for non-commercial research, private study or for internal circulation within an organisation. This is subject to it being reproduced accurately and not used in a misleading context. The material must be acknowledged as Crown copyright and the title of the publication specified. For any other use of this material please apply for a Core Click-Use Licence at www.opsi.gov.uk/click-use/system/online/pLogin.asp, or by writing to Office of Public Sector Information, Information Policy Team, St Clements House, 2–16 Colegate, Norwich NR3 1BQ, Fax 01603 723000, or e-mail [email protected]. To order further copies of this publication contact: Fahima Mahtab, Cleaner Fuels and Vehicles, Department for Transport, 76 Marsham Street, London SW1P 4DR If you would like to be informed in advance of forthcoming Department for Transport titles, or would like to arrange a standing order for all of our publications, call 020 7944 4668. Printed in Great Britain in February 2007 on paper containing at least 75% recycled pulp. February 2007 Product Code 67RRLG02744 Consultation Contents 1. CONSULTATION ON THE DRAFT RENEWABLE TRANSPORT FUEL OBLIGATIONS ORDER 2007 Contents v Introduction 1 Part I of the consultation 4 Part 2 of the consultation 18 Annex A Summary of consultation questions 26 Annex B Illustration of some possible alternative ways of setting future RTFO levels 28 Annex C The Consultation criteria 30 Annex D List of those consulted 31 2. PARTIAL REGULATORY IMPACT ASSESSMENT Contents 39 Chapter 1 Title of Proposal 41 Chapter 2 Purpose and intended effect 42 Chapter 3 Consultation 49 Chapter 4 Options 53 Chapter 5 Costs and Benefits 68 Chapter 6 Small Firms Impact Test 75 Chapter 7 Competition Assessment 76 Chapter 8 Enforcement, sanctions and monitoring 77 Appendix A Monthly Information Requirement 79 3. DRAFT RENEWABLE TRANSPORT FUEL OBLIGATIONS ORDER 2007 81 Contents 83 Explanatory Note 102 iii Contents Introduction 1 Introduction and Executive Summary 1 Purpose of this consultation 1 Consultation questions 2 How to respond 2 What will happen next 3 Part I of the consultation 4 The objectives of the RTFO 4 The nature of the obligation 4 The obligated parties 5 The Obligation Period 6 The level of the Obligation 6 Meeting the Obligation 9 Award of RTF Certificates 10 Carbon and sustainability reporting 11 Auditing of data submitted by suppliers 12 Powers to require information 13 Buy-out price 13 Redistribution of buy-out fund 14 The Office of the RTFO Administrator 16 Penalties and Revocations 17 Part 2 of the consultation 18 Section 1: the conditions that must be met before the Government is prepared to increase the level of the RTFO beyond 5%. 18 Section 2: the possible nature of, and level of, future RTFO targets 21 Section 3: Support for “second generation” biofuels, and other renewable transport fuels 24 Annex A Summary of consultation questions 26 Part 1: detailed design of the RTFO 26 Part 2: how the RTFO might develop over time 27 Annex B Illustration of some possible alternative ways of setting future RTFO levels 28 Annex C The Consultation criteria 30 Annex D List of those consulted 31 v Introduction Introduction and Executive Summary 1 The Energy Act 2004 gave the Government the power to introduce a Renewable Transport Fuel Obligation (RTFO), with the detail of the Obligation to be set out in secondary legislation. 2 During 2004 and 2005, the Government carried out a detailed feasibility study which considered whether an RTFO would be technically and legally feasible, how it might work in practice, the benefi ts it might deliver and what it might cost to implement. 3 In the light of the fi ndings of this study (available at http://www.dft.gov.uk/roads/RTFO) the Government announced in November 2005 that it would introduce a Renewable Transport Fuel Obligation (RTFO) as a way of supporting the use of biofuels and other renewable fuels in the transport sector. It also announced that the level of the RTFO would reach 5% by 2010. 4 The Chancellor of the Exchequer confi rmed in the 2006 Budget that the RTFO would start in April 2008, and that the levels of the obligation in the years 2008/9 and 2009/10 would be 2.5% and 3.75% respectively. 5 The RTFO is intended to create a strong and stable market for biofuels, and, in the longer term, other renewable fuels, in the UK. By the time the level of the RTFO reaches 5%, it will have created a demand for 2.5 billion litres of biofuel a year. This could save as much as a million tonnes of carbon a year, which would be the equivalent, in carbon terms, of taking a million cars off the road. Purpose of this consultation 6 Part 1 of this consultation seeks views on the detailed design of the RTFO, as set out in the draft secondary legislation (ie the draft Renewable Transport Fuel Obligations Order 2007). This draft is not the fi nal version. Before the draft is laid before Parliament, parts of the Order may be modifi ed in the light of comments received from consultees, and there may be further drafting and other minor changes made. 7 Part 2 seeks views on how the RTFO might evolve over time, including on issues such as the nature and level of the RTFO after 2010/11. 8 There are a number of documents attached to this consultation paper, including in particular: 1 RENEWABLE TRANSPORT FUEL OBLIGATIONS ORDER 2007 ■ The Partial Regulatory Impact Assessment (pages 37 to 79); and ■ The draft RTFO Order (pages 81 to 103). Consultation questions 9 The Government is keen to hear consultees’ views on any of the issues covered in this consultation paper. We would be particularly grateful for responses to the 25 questions which appear at various points in the text, and which are summarised at annex A. How to respond 10 This consultation began on 22nd February 2007. Responses to this consultation are requested by Thursday 17th May 2007. 11 Please ensure that your response reaches us by that date. 12 If you would like further copies of this consultation document it can be found at www.dft.gov.uk/roads/RTFO or you can contact Fahima Mahtab at the address below. 13 When responding please state whether you are responding as an individual or representing the views of an organisation. If responding on behalf of a larger organisation please make it clear who the organisation represents, and where applicable, how the views of members were assembled. 14 A list of those consulted is attached at Annex D. If you have any suggestions of others who may wish to be involved in this process please contact us. 15 The information you send us may need to be passed to colleagues within the Department for Transport or other Government Departments and/or published in a summary of responses received in response to this consultation. We will assume that you are content for us to do this, and that if you are replying by e-mail, your consent overrides any confi dentiality disclaimer that is generated by your organisation’s IT system, unless you specifi cally include a request to the contrary in the main text of your submission to us. 16 Please ensure that if you want your name or response to be kept confi dential, you state this clearly in your response. Confi dential responses will be included in any statistical summary of numbers of comments received and views expressed. 17 Responses to the consultation and any enquiries should be addressed to: RTFO Team Department for Transport Zone 2/17 Great Minster House 76 Marsham Street London SW1P 4DR E-mail: [email protected] 2 INTRODUCTION What will happen next 18 A summary of responses, including the next steps will be published by 31 July 2007 on http://www.dft.gov.uk/roads/RTFO. Paper copies will be available on request. 19 The Department for Transport will analyse the responses and draft the fi nal Statutory Instrument which will be laid before Parliament in the autumn of 2007, accompanied by an Explanatory Memorandum and full Regulatory Impact Assessment. 20 The RTFO Order will be subject to the affi rmative resolution procedure, which means that it needs to be laid while Parliament is sitting and debated in both Houses. It will come into force with immediate effect as soon as it has completed this process. This will allow the RTFO to commence in April 2008. 21 The Government will make a further announcement in due course about the nature and level of RTFO targets for the years after 2010/11. 3 Part I of the consultation The objectives of the RTFO 1 The main purpose of the Renewable Transport Fuel Obligation (RTFO) will be to deliver carbon savings of approximately one million tonnes per annum from the transport sector by 2010/11. 2 It will be one of the main policy instruments in the transport sector to reduce greenhouse gas (GHG) emissions and to increase the use of renewable fuels, helping to meet our international obligations under the Kyoto agreement and the EU Biofuels Directive.
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