Biofuels alliance budget response

Biofuels Budget Disappointment The Biofuels Alliance is disappointed that the Chancellor has today announced only a 20p reduction in 2005 for Biofuels duty, and thereby ignoring a strong message from MPs, industry, environment and farming groups, rural organisations and the public, about the appropriate incentive needed to kick start this industry.

The Biofuels Alliance has continually produced evidence for Government about the benefit Biofuels can deliver in terms of environmental benefits with greenhouse gas emission reductions, and new opportunities for the agricultural industry. However, the Alliance has consistently stated that a 20p reduction in duty is not enough to sustain the development of a large scale biofuels industry.

To minimise dangerous global warming, we must minimise our use of oil, coal and gas and switch to energy efficiency and renewable energy generation. The public and MPs have become responsive to the logical links between the agricultural industry and energy and fuel production. 128 MPs have now supported the proposals of the Biofuels Alliance by signing up to the Commons Early Day Motion (detailed below).

In mainland Europe, bioethanol industries based on sustainable agricultural crops are already being developed with government support. France, Spain and Sweden have all recognised the need to support this exciting new industry by reducing ore removing the duty on this renewable fuel.

Oliver Harwood, CLA Head of Rural Economy: " Given the right policy framework, the rural economy can play a significant role in the reduction of greenhouse gasses and other adverse environmental impacts, and ensure we have a vibrant living and working countryside for generations to come. The potential biofuels industry offers new jobs, on farms and beyond, new economic activity in the countryside, and therefore in time new tax take."

Chris Carter, British Sugar:- " British Sugar have argued strongly that the 20p reduction is insufficient to stimulate a market for biofuels. We are disappointed that the Chancellor has not responded to the additional, compelling evidence we have put forward following his Pre-Budget Review last November. We have consistently stated that a 20p reduction in duty is not enough to sustain the development of a large scale bioethanol industry . 20,000 jobs, over £50m investment, and markets for 1.2 million tons of bioethanol product are there for the asking, if only the Treasury provides the extra 6-10pence needed to stimulate investment."

Peter Billins, British Biogen:- " Reading the detail - its not all doom and gloom -whilst the 20p will not bring on home production immediately I think the Chancellor is convinced that home produced bio-ethanol needs to be encouraged - we've just got to knuckle down and show him a way forward that works for UK agriculture. I firmly believe that we can chart a way forward that demonstrates good environmental delivery to justify the support we need."

Rad Thomas, the NFU's Alternative Crop Uses Chairman said: "We don't believe that the cuts announced today are sufficient on their own to provide meaningful encouragement to Britain's fledgling bio-ethanol industry. However, the Chancellor recognised in his statement that bio-ethanol has a valuable role to play in reducing pollution levels and will continue to press for the necessary duty cut to get the industry off the ground."