§ Mr. BlizzardTo ask the Chancellor of the Exchequer what value he attributed in pence per litre to(a) carbon dioxide saving, (b) improved local air quality, (c) diversity of supply and (d) economic development benefits in calculating duty rebates for (i) LPG and (ii) biodiesel and bicethanol. [127190]
§ John HealeyThe Government offers lower duty rates for less environmentally-damaging fuels by offering duty differentials relative to the main road fuels. These differentials are intended primarily to reflect the relative environmental benefits of the fuel in question, but they also take account of other factors, such as costs of production and supply, and wider social and economic benefits, including fuel security and the potential to encourage the recycling of waste products. In the light of all these factors, we have set a duty incentive of 20 pence per litre in the case of biodiesel and bioethanol. For road fuel gases the incentives, when converted from pence per kilogram to the equivalent pence per litre, are 39.72 pence per litre for natural gases and 40.42 pence per litre for liquefied petroleum gas.
It would not, however, be appropriate to compare the duty incentive for biofuels with those for road fuel gases. The latter are directed predominantly at improvement in local air quality rather than as a carbon saving measure. They also face significant market barriers: they require a dedicated and separate re-fuelling infrastructure and vehicles have to be converted or be specifically designed to use gaseous fuels. In contrast, incentives for biofuels are focused on climate change issues and greenhouse gas reductions. Biofuel blends can be supplied through the existing re-fuelling infrastructure and used in existing vehicles.