In a move that is likely to prove expensive for motorists and consumers, the UK government, on 15 April, is set to increase its target for biofuel use to 5 per cent of transport fuels. 

But new research from Chatham House estimates that as this target is reached, biofuels will cost UK motorists in the region of £460 million in the coming year. This figure represents the increased cost of fuel from higher prices at the pump and the need to fill-up the car more often because biofuels have lower energy content. Further increases to comply with EU biofuels targets mean that this could triple to around £1.3 billion a year by 2020.

The report, The Trouble with Biofuels, by Rob Bailey, argues that this does not represent good value for money. Biofuels are an expensive way to reduce greenhouse gas emissions – the research found that typically the cost of emissions reductions from biofuels are several times what the government has identified as an appropriate price to pay.

Expanding biofuel use is also leading to higher food prices. This has damaging implications for food security in poor countries and is also likely to contribute to higher emissions, as farmers respond to higher prices by expanding production, sometimes into rainforest. After incorporating these 'indirect emission' effects, the analysis found that biofuels produced from vegetable oils are likely to be worse for the climate than fossil fuels.

Rob Bailey says, 'Current biofuels are at best an expensive way of reducing emissions. At worst they produce more emissions than the fossil fuels they replace and contribute to high and unstable food prices. Policymaking needs to catch up with the evidence base.'

There are currently no safeguards in UK or EU biofuel policy for dealing with the indirect impact of biofuels on food security and deforestation. Without these, the UK will not be able to meet its EU obligations sustainably.

Notes to Editors

Read The Trouble with Biofuels: Costs and Consequences of Expanding Biofuel Use in the United Kingdom >> 

Rob Bailey is available to interview.