Recommendation 1

HM Government Acknowledged

Fuelling the future: motive power and connectivity 3 Recommendation 6: All the propulsion alternatives have a significant role to play so the Government needs to stop demonising specific technologies that could really help. Addressing the existing fleet will be decisive in achieving the UK’s climate goals. Reducing greenhouse gas emissions right now by the use of increasing quantities of drop-in sustainable fuels enables us to address the existing fleet and minimise cost (and carbon emissions) through the use of existing infrastructure. It would also enable more socially equitable access to carbon reduction technologies for everyday transport as it would not be necessary to buy a new electric car and have access to charging infrastructure. However, sustainable fuels still produce emissions at point of use so offer no ‘apparent’ benefit in the current, misleading, legislative framework. We need a mechanism to enable the carbon savings associated with sustainable fuels to count, which would incentivise investment, drive down costs and offer a better-managed and complementary set of solutions. The Government recognises the merit in encouraging the deployment of drop-in sustainable fuels, and the importance of decarbonising vehicles on the road today. The Government does not agree with the statement that sustainable fuels currently supplied operate in a misleading legislative framework or that it is engaged in demonising specific decarbonisation technologies. The Renewable Transport Fuel Obligation (RTFO) scheme is well established and respected. Since 2008 it has set targets for the supply of renewable fuels in transport, and required minimum greenhouse gas reduction thresholds as part of strict sustainability criteria which low carbon fuels must meet. The RTFO scheme directs future investments by providing additional rewards for development fuels. Development fuels are made from sustainable wastes or renewable energy and include fuels such as aviation fuels, the majority of drop-in fuels, and renewable hydrogen. The RTFO scheme also provides support for some synthetic fuels produced using renewable energy which are not development fuels. The Government is proposing further support for power-to-liquid (PtL) synthetic fuels in its forthcoming Sustainable Aviation Fuel (SAF) mandate scheme to accelerate their commercial advancement. Drop-in fuels are supplied in high blends as a direct replacement for fossil fuels. The constraints on drop-in fuels are their cost and availability, not the absence of a credible legislative mechanism to support their wider deployment in road transport. The RTFO is continually kept under review to ensure that it is delivering cost effective carbon savings in line with UK climate change commitments. The Government is open minded on alternative fuels and will continue to be so in setting out a strategy for low carbon fuels later this year. The strategy will further support investment by setting out a vision for the deployment of low carbon fuels across transport modes up to 2050. The strategy includes the consideration of the low carbon transport fuel infrastructure requirements of the future, with the aim to maximise the opportunities presented by the upcoming transition and mitigate the risk of stranded assets. 4 Government Response: Fuelling the future: motive power and connectivity Low carbon fuels will continue to play an important role in decarbonising transport but there are limitations on some of the potential options. Synthetic fuels can be expensive and energy intensive to manufacture. Additionally, drop-in sustainable fuels do not compare favourably with electric vehicles when considering air quality pollutants. Therefore, low carbon fuel technologies in the longer term are seen as having an increasingly important role in the decarbonisation of transport sectors where there are limited alternatives to liquid or gaseous fuels, such as aviation and maritime. They could also have role in niche applications, such as for classic and historic vehicles.