Botched Biofuel Legislation Stalls Climate Change Initiative

The government has blown a hole in its climate change plans by misdrafting a key piece of legislation covering the introduction of "green" fuel for motorists. The Department for Transport admitted last night that there was an "error" in the law governing the Renewable Transport Fuels Obligation (RTFO) and it was going to have to put it right.

The RTFO was introduced this year as a way of ensuring that up to 2.5% of all petrol and a similar amount of diesel poured into cars and trucks came from low-carbon fuels. It was linked to the Hydrocarbon Oil Duty Act which missed out a vital reference to bioblends, which are part fossil fuel and part biofuel.

The error means that oil companies and supermarkets will be able to get away with meeting half these combined targets this year, which could have an impact on 2009, according to the Renewable Fuels Agency, responsible for overseeing the sector.

Biofuels manufacturers said they feared a "catastrophe" if forecourt suppliers cut back on their commitments and clean-fuel refiners are left with worthless output.

A spokeswoman at the Department for Transport said the order was being re-drafted for implementation from April 2009 and she was confident no long-term damage had been done .

Biofuels manufacturers said they were unwilling to be seen to be criticising the government and would only speak on the basis of anonymity.

But one leading company described the situation as "potentially disastrous", especially as the government had been given legal advice that it could be "ultra vires" to change the RTFO retrospectively.

Biofuels have already been criticised by the UN for reducing food supplies.