§ The Earl of Mar and Kellieasked Her Majesty's Government:
Whether the charging of duty on non-fossil fuels is compatible with or counter-productive to the non-fossil fuel obligation and the need arising from their obligation to promote the development and adoption of these alternative fuels. [HL4134]
§ Lord McIntosh of HaringeyThe non-fossil fuel obligation is concerned with electricity generation rather than road fuels. The European directive on mineral oils duties structures requires organic and non-fossil fuels used as road fuels to be taxed at the same rate as the mineral oil for which they are substituting, unless the member state concerned has secured a derogation from the provisions of the directive. The Government promote the development and use of alternative fuels, including non-fossil fuels, where there are sound environmental reasons for doing so; for example, a new duty rate for biodiesel, set at 20p per litre below the rate of ultra-low sulphur petrol, will be introduced from Royal Assent to the Finance Bill.