A £25m prize for the construction of demonstration scale waste to fuel plants has been announced by the Department for Transport.
The funding will be used to support private sector investments into renewable fuel facilities, with the aim of developing the UK’s advanced biofuel industry.
Transport minister Norman Baker said that there were real opportunities for the UK to take a technological lead on such technologies, driving growth, creating highly skilled jobs and seeing energy, security and environmental benefits from the development.
“It is clear that in the long term advanced biofuels will be important in areas that we cannot otherwise decarbonise, such as aviation,” he added. “This announcement will help put the UK in a good position to meet this demand.”
The funding will be provided over three years from 2015 to projects identified as “the best and most suitable industry proposals”.
Further details on the competition will be released in the autumn.
The Renewable Energy Association (REA) welcomed the announcement of the competition, however it said more certainty around the sector regulatory framework is needed.
Clare Wenner, head of renewable transport at the REA, said: “We urge Government to give investors a signal that the regulatory framework for renewable transport fuels will be extended beyond 2020 to at least 2030, to give entrants to the competition assurance that their investments will be underpinned by legislation.”
Under the Renewable Transport Fuels Obligation (RTFO) obligates fossil fuel suppliers need to produce evidence showing that a percentage of fuels for road transport supplied in the UK comes from renewable sources and are sustainable, or that a substitute amount of money is paid.
The policy was introduced in April 2008 and is the UK main instrument to meet the target that 10% of transport fuel should come from renewable sources by 2020, as part of the EU Renewable Energy Directive.