The recent 20 p/l Budget tax cut on the price of biodiesel fuel is ‘a sop ...

The recent 20 p/l Budget tax cut on the price of biodiesel fuel is ‘a sop to the environmental lobby’ states Arval PHH Vehicle Solutions, said to be Europe’s largest fleet and fuel management company. The company operates the AllStar fuel card that is accepted at over 12,000 petrol stations across the UK. However, it reports that not one of these sites sells biodiesel, which is manufactured from oilseed rape or vegetable oil and is a clean, biodegradable and non-polluting form of diesel. It is reported that the fuel can be used in regular diesel engines without any need for modifications. Arval PHH argues that even with the tax cut, which was clearly intended to encourage the wider use of this alternative fuel, biodiesel ‘remains uneconomical for motorists and oil companies alike’. Martin Hender, Director of Fuel, explains: ‘The cost of refining biodiesel in a large, efficient plant would be about 30-40 p/l. Regular diesel costs less than half as much to refine, so the cut of 20 p/l only just brings biodiesel into line with its fossil-fuel cousin.’ ‘However, no such large biodiesel plants currently exist in the UK. When you add in the cost of building and operating such a facility, the potential pump price of biodiesel shoots right back up. What is needed is an even greater tax cut on biodiesel so that it will be economical for UK businesses to develop it.’