Consumers to be cushioned from price impact of biofuel blending until next autumn

The Government is to increase biofuels used in petrol and diesel from January 1st next but increased associated costs will not be passed onto consumers in the short-term because of high energy costs at present. The move is part of a series of steps to increase biofuel use over the coming decade.

To meet the required level of carbon emissions reductions in transport, the recently published climate action plan (CAP) commits to incrementally raising the proportion of biofuels blended into petrol and diesel between now and 2030; thereby “meeting 3.7 per cent of the overall carbon reduction challenge”.

The latest increase was confirmed by a Government decision on Thursday, but in light of recent global increases in energy and fuel prices, interim measures will be put in place. This will involve a combination of a 1 cent per litre reduction in the National Oil Reserves Agency’s levy and a 1 cent per litre reduction in excise. These measures will be reviewed next autumn, taking into account fuel prices at that time.

Minister for Transport Eamon Ryan said: "The Renewable Fuels for Transport Policy Statement establishes an ambitious pathway for transport fuels to achieve our target of a 51 per cent reduction in emissions by 2030."

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“Further commitments include incentives to develop supply of renewable fuels including advanced biofuels and alternative transport fuels such as green hydrogen and biomethane, while ensuring the maintenance of the highest standards of sustainability of biofuel supply from source,” he added.

Transport accounts for about 20 per cent of Ireland’s emissions while the CAP commits to increasing the blend of biofuels to B20 in diesel (up to 20 per cent biodiesel) and E10 in petrol (up to 10 per cent renewable ethanol).

To date, biofuel has been the primary mechanism used to increase the share of renewable energy in the transport sector while reducing greenhouse gas emissions.

The Biofuels Obligation Scheme meant 239 million litres of biofuels replaced some 209 million litres of fossil fuels in 2020, and avoided approximately 520 kilotonnes of CO2 equivalent in transport emissions. The CAP commits to raising the blend proportion to achieve an emissions abatement saving of 1.1 million tonnes C02eq by 2030.