Consultation outcome

Government response to renewable transport fuel obligation: addressing multiple incentives

Updated 17 May 2024

Executive summary

In 2021, the government consulted on and confirmed its commitment to strengthen existing restrictions to help promote a fair market, limiting distortions. This consultation sought views to set a position on how the Department for Transport (DfT) will address the issue of multiple incentives in the case of the renewable transport fuel obligation (RTFO) and sustainable aviation fuel (SAF) mandate.

Since 2008, the RTFO has successfully achieved greenhouse gas (GHG) emission reductions through the mandated supply of renewable fuel used in transport and non-road mobile machinery (NRMM). In 2022, 3.3 million litres equivalent of renewable fuel was supplied in the UK achieving an average GHG saving of 82% compared to the fossil fuels they replaced. This resulted in a reduction in GHG emissions of over 7 million tonnes of carbon dioxide equivalent (CO₂e) over this period.^{[footnote 1]}

In July 2022, the government also confirmed its intention to mandate the use of SAF from 2025. This scheme, modelled on the RTFO, will incentivise the supply of LCF for aviation. The government has committed to at least 10% of jet fuel to be from sustainable sources by 2030. DfT consulted on the principle of the mandate in July 2021 and its detailed design in March 2023, (PDF). The 2024 government response to the second consultation and the SAF mandate will be operational from 1 January 2025. In the 2023, SAF mandate consultation, it was proposed that the multiple incentives rules under the mandate should align with those of the RTFO, as far as possible.

The current RTFO Order contains specific rules that prevent renewable fuels or chemical precursors that have previously been counted towards any renewable fuel or renewable energy target applied by the UK, a European Economic Area (EEA) state or group of EEA states from receiving reward under the RTFO. These are contained in Article 16 of the RTFO Order.

The definition of a ‘support scheme’ also means the fuel must not have received, or be going to receive, financial incentives applied by the UK or any other EEA state. These rules are reproduced in the RTFO current rules section and are set out in detail from page 50 of the 2024 RTFO compliance guidance.

Need for intervention

The globally traded nature of low carbon fuel (LCF) and the support available in different countries means that it is possible for renewable fuels or chemical precursors ^{[footnote 2]} that would receive support under the RTFO (and forthcoming SAF mandate) to also receive support in their country of production. For this consultation, this is known as ‘multiple incentives’.

The government recognises that the availability of multiple incentives has the potential to distort the market and have a detrimental impact on domestic suppliers. 

The UK  government wants to ensure a level playing field and, therefore, prevent fuels and chemical precursors from receiving more than one incentive, both domestically and internationally.

Government response

The government consulted on how the Department for Transport (DfT) will address the issue of multiple incentives in the case of the RTFO and the SAF mandate. It included specific proposals to update the existing rules relating to multiple incentives for fuel production in both the RTFO and SAF mandate.

This consultation built on a previous 2021 targeting net zero – next steps for the renewable transport fuels obligation consultation and government response to it, (PDF), where we committed to strengthen existing restrictions to help promote a fair market, limiting distortions.

The consultation focused on the following specific proposals.

Option 1

Option 1 is to extend current UK/EEA provisions to fuel that is supplied from the rest of the world but remove reference to tax-related support from the RTFO’s definition of a support scheme. 

The Trade Remedies Authority (TRA) would continue to investigate international unfair trading practices and provide objective, unbiased, World Trade Organization (WTO)-compliant advice to ministers to implement trade remedies where necessary.

Option 2

Extend current UK/EEA provisions to fuel that is supplied from the rest of the world, which would prevent the claim of all forms of multiple incentives.

Option 3

Align EEA treatment with current treatment for the rest of the world, permitting the claim of multiple incentives. The TRA would continue to investigate international unfair trading practices and provide objective, unbiased, WTO-compliant advice to ministers to implement trade remedies where necessary.

The government will take forward option 1.

Revised definition of a support scheme in the RTFO, to be replicated in the SAF mandate

‘Support scheme’ means any instrument, scheme or mechanism that promotes the use of energy from renewable sources by:

• reducing the cost of that energy
• increasing the price at which that energy can be sold
• increasing, using a renewable energy obligation or otherwise, the volume of such energy purchased

For this purpose, ‘instrument, scheme or mechanism’ includes:

• renewable fuel obligations
• direct price schemes including feed-in tariffs and sliding or fixed premium payments

It excludes investment aid, tax exemptions or reductions and tax refunds.

This amendment to the current definition of a ‘support scheme’ will ensure eligible fuels or chemical precursors can only be supported under the RTFO if they have not already been supported through a state support scheme anywhere in the world.

The combination of the measures proposed within the RTFO and SAF mandate regulations together with the department’s work with the TRA will ensure that the level playing field is maintained for LCF currently supplied and to be supplied in the UK.

Next steps

This change will be implemented for both the RTFO and SAF mandate using secondary legislation and will come into effect from 1 January 2025. The RTFO guidance will be updated in due course.

Summary of analysis

A total of 31 responses were received from a range of organisations concerning the government’s proposals. The following table provides a breakdown of the responses.

To note, respondents were permitted to self-identify as more than one organisation type, as such the total number of respondents represented in this table is marginally higher.

Table 1: total responses received

Organisation type	Number of respondents
Renewable fuel supplier	5
Renewable fuel producer	15
Fossil fuel supplier	5
Fossil fuel producer	4
Trade association	5
Research organisation	1
Academic organisation	0
Another activity of work	10

Proposed changes to multiple incentives rules for RTFO and SAF mandate

DfT consulted on the following questions to set a position on how best to address the issues of multiple incentives.

Question 1

Rank the 3 options in order of preference and provide a short explanation for your reasoning, including evidence or data where possible.

Table 2: summary of responses for question 1 (*)

Preferred option	Number of respondents: first choice	Number of respondents: second choice	Number of respondents: third choice
Option 1	11	12	1
Option 2	3	3	11
Option 3	7	6	6
An alternative option	6	n/a	n/a
Don’t know	1	n/a	n/a

(*) These figures reflect respondents who answered this question in full, providing a ranking for all 3 options. Not all respondents opted to provide a ranking for all 3 options, with some citing that they do not endorse a proposed option.

Most responses received show a preference for option 1. Among the stakeholders who selected this as their preference were:

• renewable fuel suppliers/producers
• fossil fuel supplier/producer
• trade associations
• an airline
• renewable fuel technology provider

Respondents highlighted the main advantage of option 1 was that it offers the best balance in achieving a level playing field across different demand sectors, balancing UK production and imports. They also expressed this would end current market distortions and protect domestic suppliers.

An additional advantage recognised by respondents was the retention of the TRA as the best-placed lead and expert group to investigate unfair foreign trading practices. Respondents cited that the procedures to raise concerns with the TRA are well-established with the necessary processes already in place.

Furthermore, respondents stated that it would be all but impossible to assure the absence of prior awards if tax-based incentives were not excluded, emphasising that it is appropriate these are dealt with via established trade remedies measures.

One respondent noted the risk of unintended consequences associated with implementing a blanket ban, as proposed in option 2. They were concerned that DfT may not be able to effectively achieve protection against fuels supported by tax measures. They were also concerned the TRA would not undertake any investigations where fuels benefiting from tax incentives were thought to be ineligible for the RTFO or SAF mandate support. On this basis, this respondent endorsed option 1.

Several respondents in support of option 1 made requests for clarification on the following:

• verification requirements, including sustainability declarations and absence of prior reward, for fuels and feedstocks, particularly those from non-European Union sources
• specific clarification with regards to agricultural subsidies and international aid schemes as well as state support schemes for low-carbon hydrogen
• further clarity on the interactions with a future SAF revenue certainty mechanism (RCM), carbon capture utilisation and storage (CCUS) schemes and the hydrogen production business model (HPBM)

Respondents that demonstrated a preference for options 2 and 3 highlighted a range of rationales, including:

• domestic stacking of incentives has the potential to reduce the production costs of  SAF, which will improve price competitiveness. An example of this includes a request made to permit the claim of both the SAF mandate and the RTFO once the mandate’s obligation has been fulfilled

• respondents believe the UK needs to support imports from international SAF projects to meet the proposed SAF targets under the mandate

• additional policy mechanisms to incentivise SAF uptake beyond the obligated volume to be supported under the SAF mandate

• concern that further support is needed beyond the SAF mandate and RCF to incentivise SAF uptake, including beyond the obligated amount

• concern regarding the current time taken for cases to be launched and investigated, with previous case outcomes not preventing market distortion – for example, imported hydrotreated vegetable oil (HVO)

Alternative proposals

A total of 5 respondents offered an alternative proposal rather than selecting a preferred option set out in the consultation. A summary of these can be found in response to question 3.

Government response to question 1

The government welcomes the detailed responses received to this question. Although a range of responses were received, including requests for further clarification, there was a consensus that option 1 was the preferred approach. This is demonstrated through its selection as both first and second choice for most respondents.

The government will take forward option 1.

The government is committed to:

• maintaining a level playing field for the supply of low-carbon fuels
• protecting domestic industry
• ensuring renewable transport fuels that benefit from a support scheme elsewhere in the world do not receive additional support in the UK

We strongly believe that this option will enable us to best address the current legislative gap while allowing the TRA – as the appropriate lead – to continue to investigate foreign countervailable subsidies in accordance with WTO law.

DfT will continue to work with the  TRA, the Department for Business and Trade (DBT) and other government agencies to share information and intelligence as it relates to tax-based subsidies and their presence in the domestic renewable fuels market. These information exchanges will support the TRA in investigating unfair trading practices in specific markets and providing advice to Ministers on implementation of trade remedies where necessary.

In addition to cross-government collaboration, the TRA  regularly engages with industry to better understand market dynamics and the potential impacts of unfair trading practices. The TRA has benefited from the insights provided by domestic stakeholders in the renewable fuels market, which has informed previous and ongoing investigations into imported biodiesel products. The TRA is looking to expand and improve its business engagement and welcomes further evidence from the UK renewable fuels industry where examples of unfair trading practices are identified.

Government recognises some respondents felt that options 2 and 3 were the preferred approach to resolve the potential for over-reward. The government does not believe these options are appropriate to take forward: the rationale for this in response to stakeholder views is set out below.

Moving forward with option 1

DfT believes it is inappropriate to implement a blanket ban that extends the current UK/EEA provisions to fuel that is supplied from the rest of the world, including tax-based incentives. We maintain our original position that DfT’s RTFO unit does not have the necessary expertise or resource required to robustly assess international tax-based incentives and enforce compliance. We firmly believe the TRA are best placed to address unfair foreign trading practices and it would not be appropriate or effective for DfT to lead on this.

We do not agree that it is appropriate to permit the claim of multiple incentives for a consignment of fuel, domestically or internationally. It is crucial that support is proportionate to ensure both a level playing field and value for money.

The costs and demands associated with SAF production have been cited by various respondents as the basis for endorsing option 3. We welcome respondents’ feedback on the need for sufficient support and the government remains committed to supporting industry and providing investors certainty to achieve  GHG reductions and meet targets under both schemes.

The RTFO and SAF mandate have both been designed with this in mind, setting ambitious but realistic targets and providing significant financial incentives. Both the RTFO and SAF mandate include a buy-out mechanism for the respective obligations, which provides a method of compliance where suppliers are unable to meet their obligations through the supply of renewable transport fuel or the purchase of RTF  or SAF  certificates.

These buy-out mechanisms have been set at an appropriate level to encourage the discharge of a supplier’s obligations through the supply of a wide range of LCFs or the purchase of RTFO or  SAF certificate rather than payment of a buy-out price and set a maximum cost for the scheme. Further details of the buy-out prices can be found in the RTFO Order and the SAF mandate 2024 government response, (PDF).

The RTFO certificate trading scheme is the government’s flagship low carbon fuels (LCF) policy and provides support for the UK’s LCF market – supporting renewable fuels used in transport and non-road mobile machinery. In 2022, the obligation level was set at 11.9% of total fuel supply with it incrementally rising to 17.4% in 2032. This obligation applies to suppliers of fossil fuels – over a certain volume – and acts as a target for the supply of renewable fuels, which can be met with biofuels and development fuels.

DfT consulted on several trajectories and confirmed in the 2024 government response, that the SAF mandate will be introduced in 2025. The obligation will start at 2% of fossil jet fuel supplied, which is approximately equal to 230,000 tonnes of  SAF. Targets will increase linearly on an annual basis to reach 10% in 2030.

This ambitious trajectory in the initial years sets the UK on the path to be a global leader in SAF uptake, reaffirming our commitment to at least 10% SAF in 2030. See the 2024 SAF mandate government response and the updated cost-benefit analysis for more information.

The UK’s SAF programme is one of the most comprehensive in the world. The government’s £135 million advanced fuels fund is supporting 13 different projects and reassuring investors while helping to achieve our ambition of having at least 5 commercial SAF plants under construction in the UK by 2025.

Furthermore, the government published a consultation on the design and implementation of a revenue certainty mechanism to further support the UK SAF industry by de-risking projects to develop commercial-scale SAF plants in the UK  – with an aim to implement the mechanism by the end of 2026.

The government will continue to evaluate its policies and grant funding to ensure they are effectively supporting the market.

Further clarification points:

• The multiple incentives rules for both the RTFO and SAF mandate are specific to renewable fuel and chemical precursors. The government does not currently and does not intend to regulate feedstocks, including the claim of agricultural subsidies for these under the RTFO and SAF mandate. Queries raised regarding verification for feedstock incentives should be raised directly with the verification bodies.

• As clarified in the revised definition presented in the executive summary, investment aid will continue to be excluded from the definition of a ‘support scheme’ and will not be applied as part of the multiple incentives rules for fuels and chemical precursors.

• The government will continue to ensure that support schemes are compatible where appropriate. Further information on specific scheme interactions raised in the consultation can be found below.

Question 2

Would any of the options impact the fuels that you either produce or supply under the RTFO or intend to supply under the SAF mandate? Provide reasoning and evidence for your answer.

Table 3: summary of responses to question 2

Fuels produced and supplied	Number of respondents: option 1	Number of respondents: option 2	Number of respondents: option 3
RTFO	5	7	5
SAF mandate	10	12	10

Stakeholders that responded to this question, confirming that the proposed options would in their view have an impact on the fuels they produce / supply, or intend to supply, under the RTFO and SAF mandate include:

• renewable fuel supplier/producer
• fossil fuel supplier/producer
• SAF trader
• trade association
• renewable fuel technology provider
• carbon removal project developer

Many respondents provided feedback on the potential impact on production and supply without being option-specific. Where respondents have provided insight specific to an option, this has been referenced.

Reasoning and evidence include:

• Impacts on the ability of obligated parties to source fuels and feedstocks that can demonstrate compliance with UK-specific rules – potentially creating a requirement for additional tracking. It was noted by one respondent that they believe it is likely that a premium will be applied to fuels that can demonstrate compliance while those that cannot, will see  RTFO  claims rejected or revoked.

• Concerns over domestic SAF production constraints created by the amended rules if sufficient support for power-to-liquids (PtL) is not provided under the SAF mandate.

• Risk of uncertainties around the RCM.

• Import or ‘usage’ limitations for domestic SAF producers on the back of required feedstock such as CO₂ and hydrogen (H2) or potentially bio or eMethanol and/or other precursors.

• Concern that option 3 would create an unbalanced playing field for domestic SAF  producers, in addition to other risks such as higher incentive schemes in other parts of the world or where the price for power to produce renewable fuels of non-biological origin (RFNBO) is lower than in the UK.

• One respondent stated that option 2, preventing the claim of all forms of multiple incentives, including but not limited to SAF tax credits would hinder the ability to supply SAF produced in the US under the impending SAF  mandate.

Government response to question 2

Government recognises the concerns raised around sourcing fuels and feedstocks that can demonstrate compliance with UK-specific rules. The RTFO Unit is currently working with voluntary schemes to be recognised under the UK’s RTFO Order which will certify voluntary schemes against all UK-specific rules.

The multiple incentives rules are specific to overt support schemes for fuel production, checks required by a supplier to verify fuel from all over the world should be relatively straightforward. The most complex areas for verification are typically in tax. Government’s decision to remove tax-based incentives will, therefore, facilitate and ease compliance.

Stakeholder concern for PtL SAF production constraint has been considered carefully. The 2024 SAF mandate government response has confirmed a high PtL buyout, providing investor certainty.

Government notes the feedback that a blanket ban, including tax-based incentives such as SAF tax credits, would hinder the ability to supply US-produced SAF and fulfil the mandate targets. The TRA will continue to investigate unfair foreign trading practices and will take action if necessary.

Question 3

Are there any alternative approaches that you think should be considered? Provide a short explanation if so, including evidence or data where possible.

A total of 5 respondents responded yes to question 3, offering an alternative proposal rather than selecting a preferred option set out in the consultation.

One respondent proposed the following adaptation to option 3: ‘align UK and EEA treatment with current treatment for the rest of the world, permitting the claim of multiple incentives’. They recognised that this would open up the possibility of over-rewarded fuel produced and supported in the EEA or the rest of the world being imported to the UK but cited the importance of imports, that are likely cheaper, to meet the SAF mandate obligation as the target increases. This respondent did, however, express a preference for option 1 if this alternative approach was not selected on the condition that the SAF mandate provides a sufficiently high buyout price for PtL fuel.

It was suggested by one respondent that specific provisions in addition to option 1 would be beneficial. These provisions were that UK  incentives must be sufficient in value and regulatory and financial strength to ensure projects are economic. Their preference is for one incentive that is clear and sufficient rather than having to stack several incentives, which reduces an additional risk to projects. The secondary provision suggested a list of support schemes that could cause harm to the UK’s economic position and, therefore, be excluded along with those covered in option 1.

Another alternative proposal suggested was an adaptation to option 2 with a special focus on giving a premium to UK-sourced renewable energy or chemical precursors. This would favour domestic renewable fuel.

A respondent emphasised that they recognise the government wants to ensure a level playing field through the multiple incentives rules, which would ‘rightly inhibit’ the double-counting of hydrogen production business model subsidies when hydrogen serves directly as a transport fuel. However, they also had some observations about PtL SAF and HPBM interactions, this is covered in the HPBM section.

The final alternative proposal advocated for a flexible approach to maintain the UK’s attractiveness for imported SAF to achieve net zero. It was suggested this could be achieved through differential treatment of each generation of SAF in claiming incentives, highlighting that some types of SAF may not compete directly with a domestic industry but will be necessary for airlines to comply with the SAF mandate.

Government response to question 3

The government will not accept the proposal to ‘align UK and EEA treatment with the rest of the world’. It is not appropriate or  WTO-compliant to afford the UK a domestic advantage, permitting the stacking of incentives. As highlighted in our response to question 1, it is crucial that support is proportionate to ensure both a level playing field and value for money

Government notes the suggestion for an adaptation to option 2 with a special focus on giving a premium to UK-sourced renewable energy or chemical precursors, favouring domestic renewable fuel. There is a separate piece of work ongoing on the SAF RCM, focused on securing and growing a UK SAF market. The government has considered the multiple incentives rules as we see them today, but these can be adapted in the future if necessary, depending on how the RCM  progresses.

As confirmed previously, we have also considered the importance of maintaining the UK’s position as a leader in SAF production. We have assessed the production costs of a range of SAF technologies – both established and novel production pathways. The SAF mandate buy-out mechanism has been set appropriately, reflecting our commitment to a thriving domestic fuels production industry.

Positive list of support schemes/tax incentives

Some respondents suggested that the creation of a list of support schemes/tax incentives that are not appropriate to claim in addition to the RTFO would be beneficial to monitoring and enforcing the multiple incentives rules. It was proposed this list would operate similarly to the accepted feedstock materials in the RTFO scheme.

One respondent suggested an adaptation to this list, proposing that DfT create a list of support schemes not captured under the revised definition of a support scheme that could create harm to the UK’s economic position – following implementation of option 1. The respondent believes these should then be excluded along with those covered in option 1 to better protect domestic production.

Hoowever, we have received conflicting responses of strong opposition to any efforts to list out specific tax incentives that may or not be allowed. Rationale for this included that it could result in illogical or unintended consequences. The highly dynamic nature of fuel support policy and the relative impacts make this impractical and difficult to accurately assess incentives and produce a robust list.

Government response

The government welcomes respondents’ views and suggestions on how best to monitor the various tax incentives available globally. The dynamic and global nature of the fuels market and emerging tax incentives make it extremely difficult to produce and maintain an accurate and holistic list.

DfT is committed to working with the TRA, facilitating their investigation of international unfair trading practices, however, it is not appropriate or practical for DfT to take this proposal forward.

The RTFO and SAF mandate eligibility criteria and multiple incentives rules will be clear about what may be claimed. Additionally, the RTFO Unit will be available to provide advice to fuel suppliers on a case-by-case basis on the compatibility of the support schemes.

Interactions with the hydrogen production business model

A total of 10 respondents requested further clarity on the interactions between the RTFO/SAF mandate and the HPBM or commented on hydrogen generally. The HPBM incentivises investment in new low carbon hydrogen production and encourages users to switch to low carbon hydrogen by making it a price-competitive decarbonisation option.

The HPBM provides revenue support to hydrogen producers to overcome the operating cost gap between low carbon hydrogen and high carbon counterfactual fuels.

Three respondents emphasised that harmonisation between LCF schemes and other standards for low carbon hydrogen across the industry would be beneficial.

Eight respondents expressed concern that processing low carbon hydrogen to make SAF is costly, requiring further steps that create additional costs for SAF producers. Greater support was requested for PtL SAF projects to be economically viable. Some of these respondents requested that government consider permitting support of fuel produced via hydrogen under both the RTFO/SAF  mandate and the HPBM. Under current RTFO rules, HPBM support cannot be claimed on hydrogen when it is a fuel or chemical precursor for a fuel. It was confirmed in the 2024 government response that the SAF mandate will align with the RTFO multiple incentive rules as far as possible.

Government response

Government offers flexibility for hydrogen producers producing transport fuels. The RTFO/SAF mandate will permit participation in the HPBM. However, a supplier must select one of these schemes under which to claim support for any given consignment of hydrogen.

The low carbon hydrogen agreement (LCHA) prohibits hydrogen producers from receiving any subsidy in relation to the costs of their project, other than HPBM support and specific exemptions. Exemptions include facilitating dual participation in both the LCHA and the RTFO.

This means that renewable transport fuel certificates (RTFCs) can be claimed under the RTFO in relation to hydrogen volumes produced by facilities in receipt of an LCHA contract, as long as the same volumes are not claimed under both schemes. DfT will work closely with the Department for Energy Security and Net Zero (DESNZ) to consider the treatment of the SAF mandate under the LCHA.

The government recognises stakeholder concerns for the economic viability of SAF PtL projects and remains committed to supporting industry in delivering carbon savings. The RTFO and SAF mandate will continue with the current RTFO multiple incentives rules for hydrogen, when in the form of a fuel or chemical precursor and will not permit the claim of support from the HPBM as well. The associated production costs have been considered when designing the RTFO and SAF mandate.

Should hydrogen be used as a process input during LCF production (for example, used to clean or split hydrocarbon molecules not build new molecules), HPBM support is permitted under the RTFO and SAF mandate. As confirmed above the SAF mandate government response has confirmed a high PtL buy-out price to provide greater investor certainty.

The RTFO/SAF mandate and HPBM are all subject to regular review to ensure they remain fit for purpose and keep pace with our growing understanding of how new technologies work in practice. DfT will continue to work closely with DESNZ and use these reviews as the sector develops to ensure that government is providing the appropriate level of support for fuel producers and these schemes are interacting seamlessly.

Interactions with carbon capture utilisation and storage schemes

Further clarification on the interactions between the RTFO/SAF mandate and CCUS schemes was requested in response to the consultation.

Government response

In the consultation, government confirmed that as the CCUS sector develops we will consider if further changes to the RTFO/ SAF mandate eligibility criteria would be required to maintain a level playing field for domestic and international fuel producers, while also ensuring these important decarbonisation technologies are appropriately supported.

As confirmed in the 2024 SAF mandate government response, the mandate will award certificates in proportion to the GHG emissions reductions of a given  SAF consignment. The additional certificates and, therefore, revenue from the mandate reward is likely to provide a significant incentive for a producer to use CCUS.

Other than the HPBM, the business model most relevant to SAF production is the waste industrial carbon capture (ICC) business model, which is designed to support decarbonisation of the waste sector through the application of carbon capture technology. The business model includes revenue support for 10 to 15 years, to cover capital expenditure (CAPEX), operating expense (OPEX) and CO₂ transport and storage (T&S) fees.

If a SAF plant is subsidised via the waste  ICC business model in combination with producing fuel eligible for the mandate, the plant may receive revenue significantly beyond what is required to incentivise CCUS deployment.

The ICC business models are designed to alleviate the barriers preventing industrial facilities from deploying CCUS independently. While access to the transport and storage network will still be required by these projects, the support required through an ICC business model may be less or, in some cases, no longer needed as the financial barrier to CCUS may be reduced or removed with the introduction of the mandate.

In an update published in March 2024, DESNZ confirmed that business model support may, therefore, be adjusted. The exact mechanism through which this adjustment will occur is still to be confirmed.

DESNZ also set out that as LCF production is an innovative and expanding sector which may have other revenues, subsidies or support schemes introduced in the future, there will be an aim to design support that could be adaptable for these various interactions where possible.

RTFO current rules

RTFO Order, article 16 – application for RTF certificates

The evidence which must be included in the application is a declaration from an individual nominated by the transport fuel supplier, which confirms the:

• information submitted in the application and referred to in paragraph (3)(b) is accurate
• renewable transport fuel, or a chemical precursor to it, has not already been, and will not be, counted under a support scheme, or a UK renewable energy obligation other than the renewable transport fuel obligation of the supplier (but see paragraph (6))

Nothing in paragraphs (2)(a)(ii) or (3)(ea) applies to support schemes in the form of:

• investment aid benefitting the production plant in which the renewable transport fuel was produced, whether situated in the UK or elsewhere
• the reduction in any duty payable in the UK under the 1979 Act

1. See DfT renewable fuel statistics, 2022. ↩

2. A chemical precursor is not a feedstock but is an intermediate state between the feedstock and the finished fuel, this might be a fuel in its own right but used to carry energy into the finished fuel of another type for example, hydrogen in a synthetic methane. See the renewable transport fuel obligation proposed amendments (PDF), page 72. ↩