Overview

The Renewable Liquid Heating Fuel Bill aims to incentivize the use of renewable liquid heating fuels in the UK by reducing the tax on them and requiring suppliers to provide a certain amount of renewable fuel.

Description

This bill makes two key changes to existing legislation:

Reduction of Duty

It amends the Hydrocarbon Oil Duties Act 1979 to lower the tax rate on renewable liquid heating fuel to £0.1114 per litre. This aims to make renewable options more cost-competitive with traditional fossil fuels.

Renewable Fuel Obligations

It adds a new Chapter 6 to the Energy Act 2004, introducing "renewable liquid heating fuel obligations." This requires liquid heating fuel suppliers to provide evidence that they've supplied a specified amount of renewable liquid heating fuel within a given period. An administrator, appointed by the Secretary of State, will oversee this process, potentially having powers to request information, impose requirements, and levy charges on suppliers to cover their administrative costs. The Secretary of State can also make grants to the administrator. These obligations will be subject to the affirmative resolution procedure in Parliament before they are implemented.

Government Spending

The bill will likely lead to a reduction in government revenue from fuel taxes due to the reduced duty on renewable fuels. The exact financial impact will depend on the uptake of renewable liquid heating fuels. Additionally, government spending is anticipated to increase through grants provided to the administrator to help cover administrative costs.

Groups Affected

• Liquid heating fuel suppliers: They will face new obligations to supply renewable fuel and may incur costs associated with compliance and potential charges from the administrator.
• Consumers: Could benefit from potentially lower heating fuel prices due to the reduced duty on renewable fuels, leading to reduced heating bills.
• Environment: The bill aims to improve environmental outcomes by promoting the use of renewable energy sources for heating.
• The Administrator (and its staff): This newly appointed body will have significant responsibilities for monitoring and enforcing the new regulations.

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