Summary
The Renewable Transport Fuel Obligations Order 2007 (RTFO) establishes a mandate requiring UK transport fuel suppliers to ensure a minimum percentage of their fuel supplied is renewable,达标 through a certificate trading system. It defines 'renewable transport fuel', sets sustainability criteria (land, forest, soil carbon), establishes development fuel and main obligation targets, creates RTF certificate accounts and trading mechanisms, and appoints the Secretary of State as Administrator. The Order implements aspects of the Energy Act 2004 and includes detailed definitions for feedstocks, conversion factors, and fuel types including biofuels, RFNBOs, and recycled carbon fuels.
Reason
This regulation imposes a complex, market-distorting mandate that forces fuel suppliers to purchase renewable certificates rather than allowing consumer preferences to drive fuel choices. The intricate sustainability criteria, deemed percentages, and certificate trading system create enormous compliance burdens while producing numerous unintended consequences: gaming of 'waste' and 'residue' definitions (e.g., used cooking oil exports), artificial demand for certain feedstocks that can raise food prices, barriers to entry for smaller suppliers, and certificate trading that allows greenwashing rather than genuine emission reductions. The regulation assumes regulators can better determine which fuels are 'sustainable' than the price system—a fundamental Hayekian knowledge problem. Britons would be better off allowing the market to voluntarily develop renewable fuel alternatives without mandates, as occurred with electric vehicles. Post-Brexit regulatory independence provides opportunity to delete this retained EU-era mandate and let competition drive innovation in lower-carbon transport fuels.