Biofuels—At What Cost?

The report analyzes the costs and benefits of U.K. biofuel policies, focusing on the Renewable Transport Fuel Obligation (RTFO) for the 2011/2012 period. It finds that total support for biofuels ranged between £359 million and £445 million, with biodiesel receiving the bulk of this support due to excise tax exemptions for used cooking oil (UCO). While UCO-based biodiesel offers the lowest carbon abatement costs, conventional biodiesel can lead to net emission increases due to indirect land-use change (ILUC). The report also notes that employment gains are difficult to quantify and that the U.K.'s reliance on U.S. corn for bioethanol may pose energy security risks.

• Total financial support for the U.K. biofuels sector in RTFO year 4 (2011/2012) was estimated between £359 million and £445 million, with biodiesel receiving between £315 million and £371 million and ethanol receiving between £44 million and £74 million.
• The primary support mechanisms for U.K. biofuels are blending mandates, which increase wholesale prices, and a specific excise tax exemption of 20 pence per litre for biodiesel produced from used cooking oil (UCO), which resulted in £161 million in foregone revenue in RTFO year 4.
• Carbon abatement costs in 2011 varied significantly by fuel type: UCO-based biodiesel was the most cost-effective at approximately £154 per tonne of CO2 avoided, bioethanol cost around £115 per tonne, and the overall net abatement cost for all biofuels was approximately £165 per tonne.
• Conventional biodiesel is associated with a slight net increase in emissions, whereas bioethanol and UCO-based biodiesel provide net emission reductions; in 2011, UCO and tallow-based biodiesel were responsible for over 2 Mt CO2e of savings.
• Indirect land-use change (ILUC) emissions for U.K. biofuel consumption in 2011 were approximately 0.35 Mt CO2e, with biodiesel accounting for nearly 0.20 Mt despite representing only 18 per cent of conventional biofuel use.
• Estimates for biofuel-related jobs in the U.K. in 2011 vary widely depending on the methodology used, ranging from 1,356 to 7,500 positions.
• The U.K.'s energy security regarding bioethanol is vulnerable due to a heavy reliance on corn sourced from outside the EU, primarily from the United States.
• Biodiesel consumption in the U.K. is overwhelmingly based on used cooking oil (UCO), which is primarily sourced from within Europe and the U.K., posing fewer security of supply concerns than bioethanol.
• Replacing food-based biofuels with other renewable energy sources to meet 2020 targets would likely increase the overall cost of meeting those targets, as alternatives like solar PV are more expensive on an energy basis.
• In 2010, approximately ¤18 million in Single Payment Scheme (SPS) payments under the EU's Common Agricultural Policy went to U.K. farmers growing crops destined for biofuel production.

APA

Charles, C., Bridle, R., & Moerenhout, T. (2013). Biofuels—At What Cost? International Institute for Sustainable Development. https://www.iisd.org/gsi/sites/default/files/bf_costeffectiveness_uk.pdf

Chicago

Charles, Chris, Richard Bridle, and Tom Moerenhout. Biofuels—At What Cost? International Institute for Sustainable Development, 2013. https://www.iisd.org/gsi/sites/default/files/bf_costeffectiveness_uk.pdf.

Wikipedia

{{cite report |last1=Charles |first1=Chris |last2=Bridle |first2=Richard |last3=Moerenhout |first3=Tom |title=Biofuels—At What Cost? |publisher=International Institute for Sustainable Development |date=September 2013 |url=https://www.iisd.org/gsi/sites/default/files/bf_costeffectiveness_uk.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{charles2013biofuelsat, author = {Charles, Chris and Bridle, Richard and Moerenhout, Tom}, title = {{Biofuels—At What Cost?}}, institution = {International Institute for Sustainable Development}, year = {2013}, month = sep, url = {https://www.iisd.org/gsi/sites/default/files/bf_costeffectiveness_uk.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }