Biofuels will cost UK motorists in the region of £460 million during the next 12 months, a think tank suggests.
The figure represents the increased cost of fuel from higher prices at the pump and the need to fill-up the car more often because biofuels have lower energy content.
Biofuels are set to make up 5% of the UK’s transport fuel after a new EU law took effect this week.
The report from Chatham House also suggests that further increases to comply with EU biofuels targets mean that this could triple to around £1.3 billion a year by 2020.
The report, The Trouble with Biofuels, by Rob Bailey, argues that this does not represent good value for money.
“Current biofuels are at best an expensive way of reducing emissions,” said Bailey. “At worst they produce more emissions than the fossil fuels they replace and contribute to high and unstable food prices. Policymaking needs to catch up with the evidence base.”
The research found that typically the cost of emissions reductions from biofuels are several times what the Government has identified as an appropriate price to pay.
Expanding biofuel use is also leading to higher food prices. Bailey says this has damaging implications for food security in poor countries and is also likely to contribute to higher emissions, as farmers respond to higher prices by expanding production, sometimes into rainforest.
After incorporating these 'indirect emission' effects, the analysis found that biofuels produced from vegetable oils are likely to be worse for the climate than fossil fuels.