Biofuels and sustainability
In our Climate Change Strategy published in early 2007 we made a commitment to convert our UK Bus fleet to operate on 5% biodiesel as soon as possible. We wanted to achieve early carbon emissions reductions that would then be supported by longer-term measures to improve the fuel efficiency of our vehicles.
At the time of making this commitment, biofuels were seen as contributing to the reduction of carbon emissions from road transport. The UK government was proposing to introduce the Renewable Transport Fuels Obligation (RTFO) to encourage the supply of transport fuels from renewable sources. This obligation is now in force, requiring suppliers to ensure that a proportion of their sales derive from renewable sources. The RTFO was introduced in April 2008 with the obligation level rising to 5% by 2010/11.
During the past twelve months there have been growing concerns around whether the use of biofuels is really a sustainable alternative to the use of fossil fuels. Concerns revolve around their impact on food availability and price, the potential for major carbon emissions from land clearance, potential loss of biodiversity and social impacts. It is becoming clear that the impacts of biofuels vary greatly and, while some have sustainability advantages, others may do more harm than good.
The UK government has therefore recently commissioned a review of biofuels policy and impacts. We are following this debate carefully and fully recognise the risk that these concerns could be realised if the industry is not effectively regulated. As of May 2007 we have taken the decision to continue to use 5% biodiesel in our UK Bus division and have no plans to introduce it to the UK Rail division, although we are supporting ATOC trials into the feasibility of using biodiesel. This decision remains open to review and we will take particular cognisance of the findings of the UK government review.
We fully support the sustainability reporting requirements placed upon the biofuels providers and are currently working closely with our own suppliers to implement these requirements and fully understand the supply chain. We also hope that second generation biofuels, which may compete less with food crops, will show potential.
At present we have no plans to increase further the proportion of biodiesel we use. We are working closely on this issue with the sustainability charity Forum for the Future, with whom we share a corporate partnership. They recently produced a report for us on the sustainability issues surrounding the use of biofuels and will support us in assessing the risks associated with our biofuels supply chain.