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BUDGET 2008: Discount removal signals end for E85 biofuel

Date: 12 March 2008

Biofuel can be blended in small amounts with petrol and diesel with little or no modification to existing engines.

Hidden in the Chancellor's Budget speech was the death knell for E85 biofuel as a viable fuel in the UK.

"We must encourage sustainable biofuels," said Darling, who announced the current biofuel duty differential that subsidises the fuel by up to 20p per litre will be removed and replaced by the Renewable Transport Fuel Obligation.

The RTFO has the target of reaching a 5.75% biofuel content for all road transport fuels by 2010, and in this Budget the Government has set its stall out to follow that route, rather than offer any support to the small number of cars that can take 85% biofuel E85.

At present, there's almost no biofuel infrastructure outside of Norfolk and Somerset, and the cost of the crop-based renewable fuel means there is little incentive to switch to the Saab or Ford models capable on running on it.