Adding corn ethanol to petrol to meet EU environmental obligations will cost more at the pump than biodiesel produced from waste cooking oils or tallow, a report has found.

The study was commission by Olleco, a company that coverts used cooking oil into biodiesel, and was carried out by Chatham House.

“Our research shows that biofuels derived from agricultural crops offer poor value for money as a means to reduce emissions and can have serious consequences for food prices,” said Rob Bailey, senior research fellow at Chatham House and author of the report.

“The UK’s heavy reliance on corn ethanol is a particular concern in this regard. Biodiesel produced from waste cooking oil is a more sustainable option and offers cheaper emissions reductions.”

“Biodiesel produced from waste cooking oil is a more sustainable option and offers cheaper emissions reductions” - Rob Bailey, Chatham House

Mixing biofuel with petrol or diesel reduces the efficiency of the fuel, meaning cars can travel a lesser distance per gallon of fuel burned.

However, from 5 April 5% of all road transport fuels must be from renewable sources to satisfy commitments to the UK’s Renewable Fuel Transport Obligation (RTFO). This will rise to 10% by 2020 to meet the EU’s Renewable Energy Directive (RED). Oil companies may start to offer this new blend, known as E10, later this year, despite a request by transport minister Norman Baker to delay introduction of 10% blends.

“I have made it clear to fuel suppliers that we would like them to delay supplying E10 until the number of incompatible vehicles has reduced and the market is ready. I am particularly conscious that it is often poorer people with older cars who may be particularly affected. Although it is ultimately a commercial decision, we believe this is the right approach to minimise the impact on hard-pressed families,” he said.

Bioethanol vs biodiesel

Unlike some other European countries that aim to meet their targets via a split of the main two renewable biofuels – bioethanol and biodiesel – the UK has not specified legislation to include both. The result is that fuel suppliers are importing increasing amounts of lower-priced (by volume) ethanol, primarily derived from US corn, to fulfil the RTFO.

Robert Behan, CEO of Olleco, said: “Ethanol should not be the ‘default renewable fuel’ to the detriment of other fuels such as sustainable biodiesel. We have a real concern that the potential introduction of E10 in 2013 by fuel suppliers will lead to the elimination of sustainable biodiesel made from used cooking oil and tallow from the UK fuel mix.”

The Chatham House study found that corn ethanol will offer net greenhouse gas savings of 53% in 2020; biodiesel produced from used cooking oil provides savings in excess of 80%.

A 5% blend of biodiesel/diesel could be expected to reduce miles per gallon by about 0.4 per cent, making it more a more expensive fuel. By contrast, a 5% ethanol/petrol blend could be expected to reduce miles per gallon by 1.7%.

The report also highlighted that increased demand for corn to manufacture ethanol pushes up world food prices, particularly affecting poorer countries that rely on imports.