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Last Updated: Tuesday, 10 July 2007, 15:50 GMT 16:50 UK
Kickstart for biofuel drivers
By Simon Gompertz
Working Lunch

Vegetable oil
Vegetable oil can be bought and used for as little as 55 pence a litre
Vegetable powered cars received a turbo-charged boost this month after fuel duty was axed for some drivers.

Tax inspectors used to be the scourge of biofuel enthusiasts who use vegetable oil or biodiesel to power their cars.

Even if the drivers begged for used cooking oil from chip shops and restaurants, cleaned it themselves and then used it to fill up their tanks, they still had to volunteer to pay fuel duty.

But now the duty regime is being shaken up because hundreds of small payers are clogging up the system.

Annual threshold

Any garden-shed producers who refine less than 2,500 litres of biofuel a year will be exempt from fuel duty, currently 28 pence a litre for biofuels and 48 pence for diesel or petrol.

And it's the end of the road for the Frying Squad, tax hoods who staked out supermarkets and sniffed exhaust fumes, looking for drivers buying cheap cooking oil from supermarkets and pouring it straight into their tanks, duty-free.

Her Majesty's Revenue and Customs confirmed to Working Lunch that vegetable oil bought from retailers as fuel will be exempt from duty, as long as drivers don't exceed the 2,500 litre annual threshold.

Vegetable oil bought from retailers as fuel will be exempt from duty, as long as drivers don't exceed the 2,500 litre annual threshold

Sustainably sourced?

One viewer, Jake Backus, who has converted his diesel car to take vegetable oil, was delighted with the new regime.

"One of the biggest issues we face right now is that when I talk to people about engine conversion, they say where do I get my vegetable oil from, so being able just to nip down to the supermarket or cash & carry would really solve that problem."

The environmental campaign group, Friends of the Earth, cautioned that some palm oil is produced at the expense of tropical rainforest.

"The problem for the consumer is that there is no credible guarantee out there that the biofuel or vegetable oil they are using is sustainably sourced," Friends of the Earth told the programme.

But the group does welcome the new tax break.

Engine care

Vegetable oil
Some engines need to be modified to switch to vegetable power

Compared with a typical diesel price of 97 pence a litre, supermarket vegetable oil can now be bought and legally used for as little as 55 pence, while recycled and home-refined can be completely free.

However, drivers should be careful. Although the diesel engine was originally designed to run on peanut oil, some modern engines won't take the stuff and many would need to be modified in order to switch to vegetable power.

The biofuel substitute for petrol is ethanol, distilled from sugar beet, corn or wheat, and usually made on a large scale. There are plans for several giant ethanol factories in the UK.


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