Legislation
Background
The legislation requires Europe to blend 10% by energy of RTFs in transport fuels a year by 2020. This is an obligation created by the EU Renewable Energy Directive EC2009/28 (RED), EU Fuel Quality Directive EC2009/29 (FQD) and the UK Road Transport Fuel Obligation Act 2007 and the Road Transport Fuel Obligation Amendment Order 2009 (RTFO), and equate to an estimated 23 billion litres of ethanol-based products by 2020.
To qualify under the EU Directives, RTFs have to generate a minimum of 35% carbon emission savings versus fossil fuels, taking into account the entire production process (including indirect land use change), rising to 50% by 2017. This Project has been independently verified, the results of which show that the facility will exceed the 2017 target.
Companies which fail to meet these blending requirements in the UK will be penalised by an effective penalty of 30 pence per litre for the fuel retailer from April 2010 onwards - with this penalty expected to increase if blend targets are not met.
