UK Budget Allows Room for Biofuels, Energy Innovations

Renewable energy technology and innovation will have a place in the coming budget for the United Kingdom, according to the pre-budget report given by Chancellor of the Exchequer Gordon Brown. Rapid advances in technology are responsible, in part, for the integration of the international economy, which relies on cross-border trade and investment, Brown wrote. The UK should ensure that it establishes a place for itself in the international economy, and investments in renewable energy are important for that goal.

“To meet our environmental improvement targets for 2010; a 20 percent cut in carbon dioxide emissions, 10 percent of electricity from renewable sources and a reduced reliance on landfill the Spending Review will provide additional funding for low carbon technologies,” Brown wrote. Because climate change was selected as a key priority for the UK’s International G8 Summit and European Union Presidencies, the Government will launch a consultation of the Climate Change Program. The Department for Environment, Food and Rural Affairs will work with HM Treasury on an Energy Efficiency Innovation Review to examine how technological, policy, financial and organizational innovation, whether by government, business or consumers, can best contribute to a longer-term step change in energy efficiency. The review will be funded in the budget with GBP 20 million, which should help to accelerate the uptake of energy efficiency technology. Biofuels are part of the answer to the volatility in the oil market, according to Brown. A duty differential of 20 pence per liter will be introduced for bioethanol as a way of encourage the introduction of bioethanol into the UK market. A feasibility study on a possible Renewable Transport Fuel Obligation (RTFO) would determine the cost-effectiveness, administrative feasibility, regulatory burdens and compatibility of an RTFO with other Government objectives. The UK Government will also continue the freeze on main road fuel duties in response to the sustained volatility in the oil market, and promote measures for the use of cleaner fuels and vehicles. Support for energy goals will also include recycling landfill-tax revenues for businesses that are energy efficient and minimize waste; and additional Private Finance Initiative (PFI) credits worth GBP 155 million (USD 301 million) a year by 2008, which would help to provide support for better waste management by local councils. PFIs are public-private partnerships where a public entity will request bids for a project, and the private entity that wins the bid will secure funding for the project. It is then the public entity’s responsibility to pay the private entity back through payments, much like a bank loan. Including these items in the UK budget should help the country achieve economic prosperity while protecting the environment. The UK government is committed to tackling global problems such as climate change, and to improving the local environment in Britain’s towns, cities and rural areas, Brown wrote. The Government is also committed to promoting an efficient and environmentally sustainable transport system.

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