NFU Scotland has written to the Chancellor, Gordon Brown, urging him to make a long-term commitment to the 20 pence per litre duty cut for biofuel.

NFUS welcomed the introduction last week of a target of five per cent of UK road fuels to come from renewable sources by 2010. NFUS believes that this should be the target for domestic production, and should not be met by imports. NFUS believes that a long-term commitment to a duty cut of at least 20 pence will give commercial investors confidence to enter the market and, crucially, will ensure biodiesel production is competitive. The cost of producing biodiesel is roughly double that of normal, mineral diesel.

The issue was discussed today during a seminar at AgriScot, organised by NFU Scotland and NFU Mutual. Farmers heard from Jim Booth and Elaine Booth of SAC, who were authors of a recent report outlining the potential for a new biodiesel processing plant in Scotland. Also speaking at the seminar was Allen Scobie of Scottish Agronomy.

Chairing the seminar was NFU Scotland Vice President Bob Howat. He said:

"For years now we have talked of the potential for the development of Scotland's biofuel industry. SAC's recent report highlighted this potential again and we have seen it realised through Argent's plant at Motherwell, which is already turning animal fats into biodiesel. This, however, is only the tip of iceberg. We are well-placed to grow energy crops like oilseed rape to process into green road fuels as well.

"It is down to Government to give the industry a kick-start in the same way as other EU governments have done. The setting of the five per cent target last week by the Department of Transport was a huge step forward.

"However, to give confidence to potential investors and ensure production is competitive, we need confirmation that a duty cut of at least 20 pence for biofuel is a long-term policy plan. Obviously, government has its set spending rounds and currently the duty cut is only established until 2007. Biodiesel production is made competitive thanks to the 20 pence rebate, so it needs to remain in place in the longer term.

"That move by the Chancellor, on top of having set the target, will mean we can stop talking about potential and start to meaningfully develop our biofuel industry, to the benefit of farmers and the environment."

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