Miliband backs British biofuels

“We want to see a British growing side develop because the point about British sourcing is that it cuts the miles the fuel has to travel before use,” said Mr Miliband.

“It is an important part of our vision for a diversified farming.”

Growers of crops such as wheat for bioethanol and oilseed rape for biodiesel will have a quantifiable market from 2008 when the Government introduces a requirement for three per cent of all UK fuel sold on UK forecourts to come from a renewable source.

The Renewable Transport Fuels Obligation (RTFO) rises to five per cent by 2010, after which the Government plans to double it to 10 per cent.

Speaking on Tuesday during a visit to a sustainable fuel company, Blooming Futures, in West Sussex, Mr Miliband said he wanted the RTFO to provide an impetus that would stimulate a British market. “All the evidence is that there is real potential here for biofuels. We have to think how we stimulate the market, partly by small-scale Defra grants and partly by required forecourt sales. We’ve got to manage the market in a way that brings suppliers, essentially the farmers, together with the market.

“The biggest impetus will come from the five per cent requirement on forecourt sales. This will get the fuel companies saying: ‘we’ve got to stimulate the supply side’, he said.

But others within the industry have warned that there was no guarantee that fuel companies processing crops would source from UK growers.

“A lot of companies are claiming to want to use UK growers, but you have to be fairly sceptical about this, especially as they find they have to cover start-up costs,” said HGCA economist Michael Archer.

“The fact that most of the plants have been put at ports such as Humberside, gives them the option for importing either the crop or the processed plant oil if the UK crop seems too expensive,” he said.

The NFU has said that a strong domestically supplied biofuels industry would provide carbon savings, increase fuel security and create an alternative market for the UK’s exportable surplus of wheat and oilseed rape. The 280,000 tonnes of OSR exported last year equates to more than 90million litres of pure plant oil or biodiesel.