The UK government urgently needs a clear and well defined sustainable fuels policy with financial incentives to boost the use of biofuels, according to the Society of Motor Manufacturers and Traders (SMMT).

The trade body, which represents vehicle makers and importers recently made a submission to the Department for Transport consultation on biofuels. The consultation paper, ‘Towards a UK Strategy for Biofuels’, sought views on government plans to implement the EU Biofuels Directive (which must happen by the end of the year) intended to reduce life-cycle emissions of carbon dioxide from transport across Europe, and to reduce the EU’s future reliance on oil.

Biodiesel currently costs 4p more per litre than diesel.

SMMT chief executive Christopher Macgowan said: “There is no current incentive to stimulate consumer demand. The industry can deliver the technology but it is up to government to give a clear lead for the future. Unless government increases fuel duty differentials, biofuels will never be seen as a long term alternative.”

The SMMT said that confusing messages are hampering the industry’s desire to make progress and clarification is needed on where biofuels policy sits in government thinking. There should be a clear decision on where the issue of biofuel fits in terms of UK agricultural policy, UK transport policy or in the wider context of sustainable development.

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In its submission, the organisation reminded the government that the Low Carbon Vehicle Partnership has successfully engaged all stakeholders in discussing future technologies and strategies aned claims that vehicles are already capable of using biofuels in a blend of up to 5%, which removes the need for new investment in infrastructure.

The DfT has already reported to the EU Commission that the UK target for biofuel sales in 2005 is 0.3% of total road fuel sales, the SMMT said.