Headache for government as renewable fuel supply down in 2024

14 August 2024

The government has published its provisional renewables fuel statistics which shows that supply for renewable fuel was lower at 1,689* when compared to the same period last year at 2,007*. In addition, the supply of fossil fuel is also lower at 22,631* this year when compared to 24,358* for the same period in 2023.

Last year, renewable fuel was 8% of the total fuel supply; but this year so far it only makes up 7% of the total – highlighting an increased reliance on fossil fuels.

Sheena McGuinness, head of renewables and cleantech at RSM UK: ‘The data indicates we’re going backwards regarding the supply of renewable fuel, and highlights the UK’s continued reliance on fossil fuel. With a planned ban on new North Sea oil and gas licenses, the UK will need to import more energy – taking us further away from energy security as we transition away from hydrocarbons.

‘The lack of infrastructure and the high cost of EVs is hampering demand for renewable fuel. However, if Labour’s pledge to reinstate the 2030 petrol and diesel sales ban comes to fruition then we only have six years to transition to electric motoring. Without a range of incentives, such as applying reduced VAT on new EVs or scrapping the levy on cars over £40k, to encourage consumers, manufacturers and business to commit to EVs then the target seems a stretch.

‘The data does show progress in reducing the volume of fossil fuels, down 7% on last year for the same period (Jan-Jul), which is encouraging. However, if supply is down then fuel duties are also down, which will add to the fiscal challenges the new government will need to tackle. With a promise of minimal tax rises, it will be interesting to see if there are any pay per mile road tax announcements in the forthcoming Budget to offset this looming shortfall in tax revenues.’