I received an invitation this week asking me to go protesting outside Downing Street last night… but shouting slogans with vegans is not really my thing.

I have never been much of a placard waver; not even when I was a student. I don’t believe that these marches achieve much – and I’d probably end up arguing with the “professional” protester types in their silly hats and fair-trade sandals.

I do, however, agree 100% with what these people were protesting about. Yesterday was dubbed Bio-Fools Day, because from now on we have to blend biofuels with all our fuels. It’s the law.

The Renewable Transport Fuel Obligation (RTFO) has come into effect. This means that – literally overnight – this country’s biofuels consumption is going to soar. All fuel suppliers will need to ensure that 2.5% of their sales in the UK now come from biofuels – rising to 5% by 2010.

This is just a blanket figure. It does not take into account where the fuel came from (“green” rainforest diesel anyone?). The whole process has been fudged and anyone with half a brain (ie virtually everyone who is not in this government) can see that these targets are dangerous. In fact, Germany has decided not to implement them at all.

We should take a leaf out of their book.

Continues below…

ADVERTISEMENT

Four major events will occur by 2010 that will either devastate your assets… or send your wealth soaring!

In this FREE Special Report from the editors of MoneyWeek Magazine, you’ll discover how to survive and prosper through …

* The coming 20-30% meltdown of the U.K. property market.
* The next wave of energy price increases, that could take oil over $125 a barrel.
* The return of 1970s-style inflation – and its devastating effect on gilt and share prices.
* The collapse of worldwide currency values – and the ensuing financial chaos.

If you’ve been following the financial news, you know these 4 events have already begun to unfold.  Now, while there’s still time, you can
discover the key investments that will help you preserve your assets, and make absolutely stunning returns over the next three years.

Just Click here to read this FREE Special Report …

Not sustainable

When The Royal Society released its report Sustainable Biofuels: Prospects and Challenges in January, its main conclusion concerned the RTFO.

The venerable Society said that the RTFO was lacking a vital part: it failed to deliver a greenhouse gas target. This meant that the legislation did not necessarily encourage the best greenhouse gas savings.

The Society argued that all the aspects of feedstock production need to be considered. That includes the use of fertilisers which give out nitrous oxides and the land used to grow the feedstock.

The report also recommended that the RTFO was extended for 20 years to stimulate the long-term investment that is needed for the industry. If we didn’t, there is a risk that we would be “locked in” to using inefficient biofuels.

The crazy thing is that we are importing ethanol made in the US in order to meet the obligation. On 11 April D1 Oils (LSE: DOO) said that it was to close its biodiesel refining plants, claiming it is unable to compete with cheap, subsidised US imports. Think of the carbon footprint of a tanker carrying ethanol across the Atlantic.

It all defies belief.

Regards,

Garry White

PS: should you know anyone else that you believe will find my musing of interest please forward this link so that they can sign up for the service.

PPS: I also write a newsletter each month called Smart Commodities UK which expands on the views expressed in Garry Writes and makes specific recommendations in the resource, infrastructure and biotech sectors. To discover more click here.