The UK's chancellor of the exchequer, Gordon Brown, has given his 10th and probably last pre-budget report statement, which from an energy point of view offered bad news for motorists but encouragement for renewable energy.
Earlier in the year, the chancellor froze fuel duty as UK motorists’ wallets battled to keep pace with the rising cost of crude oil. However, now that oil prices have stabilized, Mr Brown has implemented an inflation rise in fuel duty, adding 1.25 pence to a liter of fuel.
To encourage drivers to use cleaner fuels, Mr Brown has extended the 20 pence per liter discount to include the next generation of biodiesel. He is also considering extending the current 40 pence per liter duty discount for biogas and reviewing the level of tax discounts for company cars using high blend biofuels.
Meanwhile, to incentivize the use of cleaner fuels in trains the tax rate for piloting rebated fuels mixed with biofuels will be reduced from 53p to 8p. With regard to the aviation sector, from February 1 the UK government will double air passenger duty. For most journeys duty will rise from GBP5 to GBP10.
Turning to other energy measures, Mr Brown stated his desire to make London the center for carbon trading, while also revealing a goal to ensure that within 10 years every new home will be a zero carbon home.
In terms of partnerships, the UK has signed agreements with Brazil, Mozambique and South Africa to develop biofuels, on clean coal with China and India; and with Norway to conduct the first feasibility study for a new infrastructure for carbon capture and storage under the North Sea.