HCOBIG4100 – Structure of the Industry: Biofuel and fuel substitute producers

Introduction

In February 2007 there were approximately 1,000 active biofuel and fuel substitute registrations.

While many of these made biodiesel/biofuel for their own use and were very low risk in revenue terms, a relatively small number produced biodiesel commercially.

This situation changed with the introduction of the Biofuels and Other Fuel Substitutes (Payment of Excise Duties etc) (Amendment) Regulations, in June 2007. These regulations simplified the biofuels regime, and removed the need for those producers producing less than 2,500 litres per annum to register, render returns and pay excise duty.

There are currently approximately 250 motor and heating fuel registrations, for those producers producing 2,500 or more litres per annum.

For further information on biofuels simplification see HCOBIG4200

Biodiesel producers are split into two main groups:

• Those that produce biodiesel by a process called ‘transesterification’ (see HCOBIG4300 using straight vegetable oil (SVO) and/or used cooking oil (UCO).
• Those that produce a fuel by other methods, mostly from SVO or UCO (where the cooking oil is usually filtered and mixed with additives aimed at thinning the oil).

Biodiesel: Commercial production

At present, few of the major oil companies operating in the UK are involved to any significant degree in the production of biodiesel. This is likely to change within the next few years, following the Renewable Transport Fuels Obligation (RTFO) announced in November 2005. The RTFO requires that by 2010, 5% of all fuel sold in the UK must be from a renewable source.