Breaking down the RTFO

2nd May, 2008

Ian Waller, an adviser to the UK Government, explains who is and is not obligated by the new legislation

The Renewable Transport Fuel Obligation (RTFO) came into force on the 15 of April 2008, in England, Wales, Scotland and Northern Ireland.

The obligation applies to every transport fuel supplier who in a specified period:

(a) owns hydrocarbon oil at the time when the requirement to pay excise duty takes effect, and
(b) supplies that oil at or for delivery to places in the UK.

The obligation requires the transport fuel supplier to incorporate a specified amount of renewable transport fuel into the fuel they have supplied.

The specified amount is defined as follows:

(i) for the obligation period beginning on 15 April 2008, the specified amount is equal to 2.5641% of the volume of hydrocarbon oil;
(ii) for the obligation period beginning on 15 April 2009, the specified amount is an amount equal to 3.8961% of that volume; and
(iii) for each subsequent obligation period, the specified amount is an amount equal to 5.2632% of that volume.

The obligation period which applies is for one calendar year from 15 April.

An obligated party demonstrates compliance with the obligation by presenting Renewable Transport Fuel Certificates (RTFC’s). These certificates are provided to the obligated party following application by the supplier to the administrator, the Renewable Fuels Agency (RFA).

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