Why is this sustainable biodiesel illegal in the UK?

The Government is currently considering the Renewable Transport Fuel Obligations (Amendment) Order 2011.


I have seen a copy, and I can tell you that there is plenty to be concerned about in terms of its inadequacy.

But in this column I'm going to concentrate on one particular aspect: an appalling oversight which involves a potentially valuable renewable resource going unused in huge quantities, while existing biodiesel is not as sustainable as it seems.

Up against the law

John Nicholson runs an international business turning waste products, including some from the paper industry and used vegetable oil, into diesel fuels which can be burnt both in generators to produce heat and power, and in diesel vehicles. He also deals in fuel line heat exchangers and related technology.

Recently, he was raided by representatives of Her Majesty's Revenue and Customs who confiscated thousands of pounds worth of fuel, without compensation, and issued him with a tax bill for the fuel at the highest rate. It's a wonder he is still in business.

As part of the biopower network, his experience is not unique, but if you talk to anyone else in the mainstream biodiesel or biofuel network, say in the National Centre for Biorenewable Energy, Fuels and Materials, in DECC, or in the Department for Transport, they are completely unaware that this sort of thing goes on.

Now, you and I know that it is both common sense and environmentally sound to reduce both carbon emissions and waste by collecting used vegetable oils and chemically related liquids from cafes and other outlets and reusing it as biodiesel.

So why is it that what John Nicholson and those in his network do, is currently illegal in this country?

Current legislation requires that any conventional biodiesel:

1. must contain biomass or waste cooking oil
2. must not contain hydrocarbons
3. must have a total ester content not less than 96.5% by weight
4. and a sulphur content not exceeding 0.005% by weight.

It is the third point which John fell foul of.

Yet there is nothing about the chemistry of esters that makes them uniquely suited for the manufacture of biofuels.

There is, in fact, a wide range of non-fossil derived materials (much of which is currently regarded as waste) that could most beneficially be used to make biofuels, but at present these materials cannot be used in the UK because they are not esters.

In Ethiopia, China, Germany, Croatia, Italy, Spain, and many other nations these materials can be used without obstruction.

The EU Renewable Energy Directive (RED), (amendments to which are currently out to consultation), which is the 'parent’ of the Renewable Transport Fuels Obligation and other UK legislation specifying the use of biodiesel, makes no restriction on the proportion of esters which can be used in biodiesel.

The current draft defines it as "methyl-ester produced from vegetable or animal oil, of diesel quality, to be used as biofuel", without specifying any proportion.

Why is Britain adopting this unsustainable position?

John has a sneaky feeling, which he cannot prove, that it is because of pressure from the UK petrochemical industry, which uses a petrochemical byproduct to make legal biodiesel.

In the UK, the only currently legal biodiesels involve in their manufacture the chemical process of transesterification, by which biodiesels are manufactured as a Fatty Acid Methyl Ester (FAME), using these byproducts (and others, such as rape seed oil, which uses agricultural land).

This is an inefficient process, causing the production of waste glycerol.

By comparison, a more sustainable process is available, which does not create waste.

Instead, it recycles a waste, used vegetable oil, and creates a larger volume of fuel from the source material than is provided by transesterification.

Britain produces more used cooking oil waste than any other EU nation. Yet most of this is collected and then sold to the biofuels makers in France, Germany and Austria because they can afford to pay better prices for our UCO, because they have lower biofuel taxes.

Many sustainable biofuel resources are available but are currently discarded as waste, such as terpentine from the pulp and paper making industry, and terpenes (non-esters) from the essential oils of many types of plants and flowers.

Unless reused, such materials will otherwise biodegrade to form methane, a greenhouse gas far more damaging than carbon dioxide.

Although these materials can be refined and used for many applications, low grade material can be used in dilution with vegetable oil to make a biofuel that can be run in most vehicles at 100%.

It is a simple mixing process, in which used cooking oil is blended with a solvent. The solvent can be made from these essential oils, alcohol and water.

This lowers the viscosity of the fuel slightly, and raises its cetane value (an indicator of its ease of combustion). Further additives can also improve the power-to-heat output from engines, thereby improving tractive performance.

This wide range of non-fossil derived materials, that could be used in the manufacture of better biofuels, is not available in the UK because of the barrier created by the ester content requirement, and the unhelpful position being taken by HMRC on this issue that led to John Nicholson's stock being confiscated and destroyed.

The non-renewable renewable fuel

There is a further problem with conventional and legal biodiesel: it can contain fossil fuels.

Surprised? This is because methanol is required to make traditional biodiesel as a Fatty Acid Methyl Ester, by the chemical process of transesterification with methanol, using caustic soda as a catalyst.

Commercially available methanol is made from the methane that exudes from oil and gas wells, and is a waste by-product from the petrochemical industry.

It therefore contains fossil derived carbon atoms, and burning methanol or a methyl ester continues to exacerbate climate change, turning what is supposed to be a renewable fuel into one that is less so.

The further incomprehensible and inconsistent fact is that while biofuels are taxed, methanol made from methane is not!

Taxing methanol, and removing the ester condition from biodiesel, would therefore help the UK to meet the Fuel Quality Directive, which requires suppliers to reduce the lifecycle greenhouse gas intensity of transport fuels.

In fact, from the sustainability angle, the whole format of the legal provision in the Hydrocarbon Oil Duties Act 1979 (HODA) is now so complicated and ambiguous that it is totally unfit for purpose.

HMRC is now interpreting this law in such a way that is putting many people off setting up biofuel projects that could operate as community businesses collecting local waste cooking oil and encouraging local farmers to grow energy crops which can be processed to make fuel to meet local needs.

My request to the Department for Transport

So, in summary, here are four things that need to be changed to make biofuels more sustainable in the UK:

1. remove the criteria applied to biodiesel that it must be not less than 96.5% ester content by weight
2. increase the present tax break on biofuel to at least 60p per litre, or remove tax completely
3. remove tax from any biofuel used to produce electricity, or for off road purposes
4. remove biofuels from the scope of the Tied Oils Act under HODA. HMRC claim that any non-fossil derived plant oil is subject to the Tied Oils Act, even though the act itself refers to mineral oil. This creates an ambiguous situation that is open to interpretation.

I have talked to people in WRAP, which I would have thought would be interested in the resource efficiency aspect of reusing used vegetable oil. They have not considered it, and it is not in their work programme.

I have talked to people in the Environment Agency, and while they are interested in the waste aspect, though not concerned with the taxation issue.

HMRC says it is a matter for government to decide.

Whenever John Nicholson has written to the Treasury or DECC, he has received no answer.

The new Renewable Transport Fuel Obligations (Amendment) Order 2011 makes no mention of this problem.

The Renewable Energy Association, which represents the biofuel and energy from waste lobby, does not comment on this specific issue, but does say that the new RTFO "gives no encouragement for the supply of biofuels that do more than reach the minimum sustainability requirements of the RED" and gives "no incentive to produce 'better' biofuels ( i.e. those that deliver high GHG savings)".

The UK Carbon Plan is to increase biofuel use to 5% by energy to 2015 followed by further biofuels contribution to 2020 renewable targets with an assessment of road biofuel potential up to then and a decision taken on biofuel use by 2020.

The RED renewable transport target is 10% by 2020. But the RTFO specifies no route to achieve this.

If the Government seeks to meet this target, it really ought to urgently attend to this problem, and make it possible to produce more sustainable biodiesel without breaking the law.