Renewable Fuels statistics Notes and Definitions

Statistical Document August 2019

About this documentThis release is the supporting documentation for the Renewable Fuel Statistics series. https://www.gov.uk/government/collections/biofuels-statistics

This series was formerly called the Renewable Transport Fuel Obligation statistics.

In this publication

Legislation p2

Renewable Transport Fuel Obligation (RTFO) p2

Greenhouse Gas (GHG) reporting regulations p4

Carbon and Sustainability reporting criteria p5

Data sources p5

Strength and weaknesses of the data p6

Reporting timetable p6

Notes on published tables p7Glossary p10

Background to Renewable Fuel StatisticsThe Department for Transport (DfT) renewable fuel statistics releases represent the most up-to date information on renewable fuels supplied to the UK. Renewable fuels are any fuels that are produced from an re-newable energy source and include both fuels originating from biomass (biofuels) and Renewable Fuels of Non-Biological Origin (RFNBOs).

To be verified as renewable, the fuel has to pass mandatory carbon and sustainability criteria. This includes the requirement that renewable fuels must provide at least a 50% reduction in greenhous gas (GHG) emis-sions compared to fossil fuels.

StatisticsStatistical releases and tables for renewable fuels are available on GOV.UK.

Figure 1: Overview of a typical process of making renewable fuels*

*Some renewable fuels have a significantly different production process, in par-ticular Renewable Fuels of Non-Biological Origin (RFNBOs).

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Legislation

There are two pieces of UK legislation that relate to renewable fuels. Both include mandatory carbon and sustainability requirements which must be met. These are:

1. Renewable Transport Fuel Obligation (RTFO) OrderThe RTFO encourages the supply of renewable fuels by requiring that a certain proportion of fuel supplied to the UK is renewable. The RTFO is one of the UK Government’s main policies for reducing GHG emissions from road transport. The RTFO commenced on 15th April 2008 and was amended from 15th December 2011 to implement the transport elements of the EU Renewable Energy Directive (RED) which include mandatory sustainability criteria for biofuels. The RTFO guidance is here.

2. Motor Fuel Greenhouse Gas (GHG) Emissions Reporting Regulations The GHG Reporting Regulations require that suppliers of fuels for use in road transport and non-road mobile machinery to achieve at least a 6% reduction in life cycle GHG emissions from the transport fuel that they supply in 2020, relative to the EU average life cycle GHG emissions from fossil fuels in 2010. This legislation ensures compliance with EU Fuel Quality Directive (FQD). The GHG reporting regulations guidance is here.

Renewable Transport Fuel Obligation

Under the RTFO, suppliers of more than 450,000 litres of road transport fuel and non-road mobile machinery (NRMM) fuel to the UK must supply a set proportion of their supply from renewable fuels, per year. This proportion increases each year with 12.4% of all fuel supplied (by volume) required to be renewable by 2032. The obligation is met by redeeming Renewable Transport Fuel Certificates (RTFCs), which are awarded by the RTFO Administrator to companies that have supplied renewable fuels meeting set carbon and sustainability, land use and biodiversity criteria. Suppliers can meet up to 25% of their obligation using excess RTFCs from the previous obligation period. Obligated suppliers must redeem a set number of renewable transport fuel certificates with the minimum level of one certificate for every litre of fossil fuel supplied.

To meet their obligation suppliers have three options:i. Redeem a number of RTFCs in proportion to the volume of fossil fuel and unsustainable biofuel they supplyii. Buy RTFCs from other companiesiii. Pay a ‘buy out’ price – this is set at 30p per RTFC litre of renewable fuel that would otherwise would have been needed to meet their obligation.

The number of RTFCs issued for renewable fuels can vary:1. Based on feedstock

• Crop based feedstocks are issued one RTFC per litre/kg of renewable fuel supplied.• Fuel from certain wastes or residues, fuel from dedicated energy crops, and RFNBOs are incentivised by awarding double the RTFCs per litre/kg supplied.

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2. Based on whether fuel is gas/liquid• Biogases (biomethane, biobutane and biopropane) receive a number of RTFCs in proportion to their energy content per kg. For example, biomethane receives 1.9 RTFCs/kg.

Renewable fuels produced in installations which started operating after 5 October 2015 must deliver at least a 60% GHG emissions saving, otherwise fuels produced in older installations must make a 50% saving.

For 2018 onwards there are three RTFC categories based on the type of feedstock the fuel is made from: general, relevant crop and development fuel (introduced in 2019).

• Relevant crop - renewable fuels made from crops such as sugar and wheat. The amended RED set a maximum on the amount of crop-derived renewable fuels which may be counted towards renewable transport targets. This crop cap was introduced in 2018 (April to December) and will begin at 4% of a suppliers total relevant fuel supply decreasing to 3% by 2026 and 2% by 2032.

• Development fuel - a fuel made from certain sustainable wastes or residues or a renewable fuel of non-biological origin (RFNBO) and is also a specifed fuel type (see RTFO guidance). This was introduced from 1 January 2019 onwards.

• General - everything that isn't a development fuel or relevant crop.

There have been several changes related as legislation has been amended or EU directives are implemented. A timetable of change is below.

For further information please see the RTFO Order guidance.

Figure 2: Timteable of legislative changes to the RTFO

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Motor Fuel Greenhouse Gas Reporting Regulations

The GHG reporting regulations require that the whole fuel production process reduces greenhouse gas emissions by 6% by 2020. There is a second goal of a 4% reduction in greenhouse gas emission from the whole fuel production process by 2019. The GHG reporting regulations is the UK legislation implementing the EU Fuel Quality Directive (FQD).

The GHG Reporting Regulations are met by redeeming GHG credits. Mandatory targets have been set compared to the EU 2010 baseline figure (94.1 gCO2e/MJ) with a 4% GHG reduction target for 2019 (90.34 g CO2e/MJ) and a 6% GHG reduction target set for 2020 (88.45 gCO2e/MJ). One GHG credit is equivalent to one kg of GHG emissions saved (kgCO2e) compared to the fuel baseline for the year. If a fuel supplied has a GHG emission intensity above the target level for the relevant year, this is added to a fuels supplier's GHG obligation.

GHG credits can be awarded to a wide variety of fuels: • Sustainable renewable fuels • Electricity used in road transport • Upstream emission reductions (UERs)• Fossil fuels which can have GHG intensity below the 2020 GHG target such as liquid petro-leum gas (LPG) or compressed natural gas (CNG) • Fossil fuels which have a GHG intensity below the 2020 GHG target level once a powertrain efficiency factor is accounted for such as natural gas-derived hydrogen used in a fuel cell electric vehicle (FCEV)

There is no double rewarding or carry-over of GHG credits to the next year, in contrast to the RTFO.

For further information please see the GHG Reporting Regulations guidance.

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Carbon and sustainability reporting criteria

Both the RTFO and GHG Reporting Regulations require strict sustainability criteria which fuel must meet to be classified as renewable and thus receive RTFCs or GHG credits respectively. The carbon and sustainability data must be independently verified by a voluntary scheme and that verification is submitted as part of the supplier's application. The criteria are:a. Renewable fuels produced in installations on or before 5 October 2015 must achieve at least a 50% GHG emissions saving. Renewable fuels produced in newer installations which started operating after 5 October 2015 must deliver at least a 60% GHG emission savings.b. Biofuels may not be made from raw material obtained from land with high biodiversity value in or after January 2008 c. Biofuels may not be made from raw material obtained from land with high carbon stock such as forests or land that was undrained peatland in January 2008 unless strict criteria are met.

It is necessary to be able to track carbon and sustainability data back to its original source to verify the fuel. Mass balance (or a more stringent system) is the only chain of custody system permitted. A mass balance system requires suppliers throughout the supply chain to account for thier product on a units in - units out basis, but does not require the physical seperation of certified feedstock or fuel from uncertified material. It ensures that for every unit of sustainable renewable fuel sold the corresponding sustainable feedstock has been produced.

For more information, please see the Carbon and Sustainablity part of the RTFO guidance.

Sources of data

The RTFO Operating System (ROS) is the online database where suppliers submit their applications for renewable fuel to be awarded under the RTFO. This database has information on:a. Fuel volumes – these are validated against HMRC duty payment data b. Carbon and Sustainability informationc. RTFCs information i.e. issued, redeemed, surrendered and transfers

Fuel volumes submitted by suppliers are validated against HMRC tax duty payment data. This HMRC data is published in the Hydrocarbons Oils bulletin (https://www.uktradeinfo.com/Statistics/Pages/TaxAndDutybulletins.aspx).

The GHG Operating System (GOS) is the online database where GHG credits are issued and awarded as well where supplier's GHG obligations are calculated as required under the GHG Reporting Regulations. If a supplier has already submitted inofrmation on fuel under ROS it is automatically updated in GOS. However if non-obligated suppliers under the RTFO can submit their fuel volumes, carbon and sustainability information (if applicable) directly under GOS.

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Strength and weaknesses of the dataThe data is validated in several ways:1. Carbon and Sustainability data is verified by independent verifiers and is checked against the RTFO Guidance by the RTFO Administrator. The proportion of fuel verified by each voluntaary scheme is found in table RF_0106.2. The Administrator validates fuel volumes submitted by fuel suppliers against that held by HMRC regarding fuel duty liabilities.

However, there is not an exact match between fuel volumes reported here in Renewable Fuels and fuel volumes reported in HMRCs Hydrocarbon Oils bulletin. Reasons for this include:• Fuel volumes may change over time even after validation against HMRC data as suppliers

make ammendments to the fuel volumes they have supplied (and the relevant duty liabilities).

• Fuel can be categorised differently under the RTFO and by HMRC. In particular, the RTFO requires records fuels based on how renewable they are, but HMRC use duty codes. For example petrol used as denaturant in ethanol is recorded as ethanol by HMRC and petrol under the RTFO.

• Calendar month and quarterly duty payments can be recorded against different supply periods under the RTFO and by HMRC (typically these are a month different).

• Adjustments in duty payments can be recorded in different periods. HMRC record adjustments in the month the adjustment occurs and while this is usually the practice under the RTFO, there can be exceptions around the change in years (and previously obligation periods).

• Road duty can be paid on fuel that is later proven to be for non-road use

Reporting timetable

From 2019, the reporting period is each calendar year. From 2008 to April 2018, the obligation period was the 15th April one year to 14th April the next and 2018 is a short year (April to December) to account for the change to calendar year. Reports are published quarterly in Febuary, May, August and November and there are six reports published for each year. Each report will replace the previous report for that year with the first five (or in the 2018 short year, 4) reports being provisional and the sixth report is final. The final report will report on the carbon and sustainability performance of individual suppliers. All final reports are available on our website. The timetable for the 2018 and 2019 statistics releases are:

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Notes about the published tablesData on renewable fuels is split into separate series based on whether they are reporting to the RTFO or the GHG Reporting Regulations. Tables RF_01XX correspond to data awarded under the RTFO and Tables RF_02XX include data awarded under the GHG Reporting Regulations.

RTFO tablesRF_0101: Volumes of fuels by fuel typeContains information about all fuel submitted under the RTFO. It includes both the fuel verified as renewable under the RTFO as well as fuel waiting to be verified as renewable, and fossil fuel volumes. This table was previously called RTFO_01.

RF_0102: Volumes of renewable fuel to which Renewable Transport Fuel Certificates (RTFCs) have been issued and the number of RTFCs issuedSuppliers can apply for RTFCs up to 7 months after the end of the year. Carbon and sustainability data is only reported once the RTFCs have been issued. Therefore, there will be a difference between the volume of renewable fuel supplied and the volume of renewable fuel that RTFCs have been awarded to (and corresponding carbon and sustainability data available). The difference will decrease with each successive report until the final RTFC deadline has been reached and the final report for the year is published.

HO930 and HO10s are HMRC road fuel duty return forms. This table includes RTFCs issued to HO930 companies for an additional month than is allowed for HO10 companies, as the Administrator allows HO930 companies to provide proof of payment of duty ahead of that being provided by HMRC. Where such proof is provided, and the Administrator is satisfied that the sustainability criteria have been met, RTFCs will be issued a month earlier than for HO10 companies which can only be validated with HMRC data. This table was previously called RTFO_02.

RF_0103: RTFC balances by obligation periodThis table contains information about RTFCs which have been issued to fuel verified as renewable under the RTFO. RTFCs classed in still in existence are RTFCs which have not been redeemed when the final statistics were produced.This table was previously called RTFO_03.

RF_0104: RTFCs transferred by quarter certificate category and RTFO account holder type.Contains information on the trades and transactions of RTFCs. As RTFCs can be issued up to 7 months after the end of the year, trading continues until the obligation year is closed (which is 7 months after the end of the year). This table was previously called RTFO_04.

RF_0105: Carbon and sustainability data of renewable transport fuelProvides a detailed breakdown of each renewable fuel by fuel type, feedstock and country of

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origin. This table only includes information about fuel which has been verified as renewable. The carbon intensities can be the default values as specified in the RED, although actual values can be provided by suppliers. This table was previously called RTFO_05

RF_0106: Voluntary scheme data of renewable transport fuelShows the proportion of fuel certified by voluntary schemes. This table only includes information about fuel which has been verified as renewable. This table was previously called RTFO_06.

RF_0107: Performance against obligation (only published in the final report)Shows each company’s progress against their obligation since 2008 and whether they met their obligation using RTFCs or a buy-out price. This table only includes information about fuel which has been verified as renewable. This table was previously called RTFO_07.

RF_0108a: Feedstock by supplier as a percentage of their supply and RF_0108b: Country of origin by supplier as a percentage of their supply (only published in the final report)Show the proportion of a supplier’s renewable fuel supply by feedstock and country of origin. This table only includes information about fuel which has been verified as renewable. In RF_0108b country names have been abbreviated and are based on officially assigned ISO country codes. https://www.gov.uk/government/publications/iso-country-codes--2This table was previously called RTFO_08.

RF_0109: Percentage of renewable fuel supply that was demonstrated to be sustainable (only published in the final report)Shows the proportion of fuel with has been verified as renewable by supplier. This table was previously called RTFO_09.

RF_0110: Carbon and sustainability data by supplier (only published in the final report)Shows the carbon and sustainability data of renewable fuels by land use category or voluntary scheme for each supplier. This table was previously called RTFO_10.

RF_0111: Fuel supply by volume and energy: UK (only published in the final report)Shows the fuel volume and energy (with and without double counting) supplied from fossil and renewable fuels. The progress towards RED2020 target is also reported. This table contains information about all fuel submitted under the RTFO. This includes both the fuel verified as renewable by the RTFO team as well as either that waiting to be verified as renewable and fossil fuel volumes. This table was previously called RTFO_11.

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RF_0112: Civil penalties issued under the RTFO Order and GHG reporting regulations (only published in the final report)Shows the civil penalties issued under the RTFO Order and the GHG Reporting Regulations by company, reason and value of penalties issued. This table was previously called RTFO_12.

RF_0113: Supplier performance against GHG reporting requirements (only published in the final report)Shows whether the supplier met the GHG Reporting Requirements. This table was previously called RTFO_13.

GHG Reporting Regulations tablesRF_0201: Fuel volume and GHG savings supplied by fuel typeContains information about all fuel submitted under the RTFO and GHG reporting regulations. It includes both the fuel verified as renewable by the RTFO team as well as either that waiting to be verified as renewable and fossil fuel volumes. The GHG savings and credits awarded to verified renewable fuel is shown.

RF_0202: Greenhouse gas savings by fuel type, carbon intensity and credits issuedContains the detailed breakdown of fuel volume and GHG savings by GHG reporting category, fuel type and feedstock. The GHG savings and credits of verified renewable fuel is shown.

RF_0203: Trading transactions of GHG creditsShows trades of GHG credits between HMRC volume types. April-June 2019 was the first quarter for which trading was possible.

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Glossary

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