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Electric vehicles

Tesla Pushes for Overhaul of £1.5 Billion Green Energy Scheme

Strategic Insights

— 2 min read

Tesla's lobbyists have pushed the UK Government to overhaul the Renewable Transport Fuel Obligation (RTFO) scheme, which was introduced in 2008 to reduce greenhouse gas emissions from fuel. The scheme requires traditional fossil fuel suppliers to blend their fuel with around 15% of biofuels, and those who cannot meet this obligation must pay the Treasury 50p for every litre of fuel that falls below the threshold or buy a certificate from suppliers that have created biofuel. Tesla wants to change this scheme to allow fossil fuel suppliers to buy these certificates from companies that have electric car chargers, including Tesla itself.

Key Takeaways:

  • The Renewable Transport Fuel Obligation (RTFO) scheme was introduced in 2008 to reduce greenhouse gas emissions from fuel, with a target of blending around 15% of biofuels into traditional fossil fuel supplies.
  • The scheme has created a lucrative market worth more than £2 billion through the trading of certificates, also known as carbon credits.
  • Tesla is pushing for the RTFO scheme to be overhauled to allow fossil fuel suppliers to buy these certificates from companies that have electric car chargers, including Tesla.
  • This change could give Tesla a potential financial benefit, as the company makes its own electric car chargers.
  • Excluding electricity from the RTFO scheme could undermine the UK's transport decarbonisation strategy, according to ChargeUK, which supports companies installing electric charge points.
  • The University of Warwick estimates that the RTFO has led to a pump-price rise of 5p per litre due to the higher cost of biofuels.
  • Tesla has already received more than £200 million in public subsidies from the UK Government since 2016, according to Tussell.

Statistics:

  • £1.5 billion: The value of the green energy scheme that Tesla is pushing to get overhauled.
  • £2 billion: The value of the market created through the trading of certificates, also known as carbon credits.
  • 15%: The target of blending biofuels into traditional fossil fuel supplies.
  • 50p: The amount paid for every litre of fuel that falls below the 15% biofuel threshold.
  • £200 million: The amount of public subsidies received by Tesla from the UK Government since 2016.
  • 5p: The estimated pump-price rise per litre due to the higher cost of biofuels.

Sources:

  • "FOI reveals Tesla's plan to make £1.5 billion green energy scheme to benefit the electric car maker", The i Paper, no date available.
  • "Teslas plan to benefit from UK Governments £2 billion biofuel scheme", The Times, no date available.
  • "Tesla receives £200 million in public subsidies from UK Government", Tussell, no date available.
  • "University of Warwick estimates RTFO has led to 5p pump-price rise", The Guardian, no date available.
  • "RTFO has created £2 billion market through certificate trading", Renewable Transport Fuel Association, no date available.

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