Government announces Pre-Budget Report and Comprehensive Spending Review
Tue 09 October 2007
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The Government's Pre-Budget Report announced the publication of the King Review interim report on de-carbonising road transport but includes few new measures relating to low carbon road transport. Meanwhile, the Comprehensive Spending Review, announced alongside the PBR confirms a 2.25% annual real increase in the DfT's budget, a reduced rate of increase compared with the last decade.
The PBR announced that:
* The Government has laid in Parliament the draft Renewable Transport Fuel Obligation Order to prepare for the introduction of the RTFO in April 2008.
* There will be an extension of the current duty incentive for biofuels to biobutanol on a pilot basis, with the aim of assessing its environmental benefits and performance as a transport fuel.
* The Government will not pursue state aid clearance for the proposed enhanced capital allowance for the cleanest biofuel plant because of its administrative complexity and limited benefit. The Government has decided to focus on ensuring that the RTFO encourages the production of the cleanest and most sustainable biofuels.
* The Government is revising its estimate of the amount of carbon savings likely to arise from the RTFO. Total net carbon savings were initially estimated to be in the region of 3.6MtCO2 per year by 2010 but increased understanding of the marginal CO2 impacts has resulted in a downward revision in the Government's estimates to 2.6-3MtCO2 per year by 2010. The revision takes into account the lower energy content of biofuels.
The Government also announced its spending commitments to 2010/11 in the Comprehensive Spending Review. Funding for the Department for Transport will increase at a rate of 2.25% per annum in real terms (compared with a 6.1% annual increase over the last ten years). Funding for Defra will rise by 1.4% a year in real terms but DBERR is to be cut by 2.6% a year.
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