UK support for biofuels currently includes a fuel duty incentive guaranteed at 20p per litre for next three years alongside the Renewable Transport Fuels Obligation (RTFO). This means combined support for use of biofuels is guaranteed at 35p per litre in 2008-09
That information comes from an unnamed UK treasury (finance ministry) source in a report in the Western Mail, by David Williamson. David was reporting on a conservative member of the Welsh Assembly (a kind of super local council for Wales with very limited legislative power) who says that Wales is being held back in biofuel production by punitive taxes.
Key players in the UK biodiesl industry don't see any chance of motorists switching to biodiesel unless it is priced lower than conventional fuels. The way they propose to do this is through state subsidies of the biofuel industry.
As Jan Cliff, of Ammanford-based Sundance Renewables, said : “In this country the biodiesel industry can’t afford to pay farmers a good enough price for the rapeseed oil.”
That sums up the problems that many industries face when they start off. If there are going to be subsides they have to be transitional and they have to be at a level where they don't make exporting attractive