Overview

This bill aims to incentivize the use of renewable liquid heating fuels in the UK by reducing the tax on these fuels and requiring suppliers to provide a certain amount of renewable fuel. This is intended to help the UK meet its climate change targets.

Description

The bill makes two key changes. Firstly, it reduces the duty on renewable liquid heating fuel to £0.1114 per litre. This lower tax rate applies to fuel used for heating purposes. Secondly, it introduces a new system of obligations for liquid heating fuel suppliers. This requires suppliers to demonstrate that a specified amount of renewable liquid heating fuel is supplied within a given timeframe. The Secretary of State will set these obligations through orders, after consulting relevant stakeholders. An Administrator will be appointed (either an existing body or a new one created by the order) to oversee this process, including gathering evidence from suppliers, and may impose charges on suppliers to cover administration costs. The Secretary of State can also provide grants to the Administrator.

Government Spending

The bill will likely lead to a reduction in government revenue from fuel duty, as the tax on renewable liquid heating fuel is reduced. The exact cost will depend on the amount of renewable fuel used. The government will also incur costs associated with the administration of the new obligation scheme, potentially offset by any charges levied on suppliers and potentially further supplemented by direct grants to the Administrator.

Groups Affected

• Renewable liquid heating fuel suppliers: These suppliers will face new obligations to supply a certain percentage of renewable fuel and may face charges from the Administrator.
• Consumers: Consumers may see a reduction in the cost of renewable heating fuels due to the lower tax rate, potentially leading to more affordable sustainable heating solutions.
• The Administrator: The entity appointed to oversee the new obligations will have significant new responsibilities and potential costs. The government may directly grant this entity funds to perform its task.
• UK Government: The government will experience a reduction in tax revenue from fuel duty but may also see a wider benefit from the increased adoption of renewable heating fuels.

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