In the Energy Act 2004, the UK Government provided for the enactment of a Renewable Transport Fuels Obligation (RTFO). This mechanism is very similar to the Renewables Obligation currently operating in the electricity sector.  The obligation will be introduced in 2008 with an obligation of 2.5% biofuels in 2008-2009 and 3.75% in 2009-2010, reaching 5% for 2010-2011.  The fuel may be supplied as either 5% blends that can be used in any vehicle, or as higher blend fuels as vehicle technology and warranties allow. 

The RTFO is now in law and responsibility for managing the RTFO has passed to a new government agency - The Renewable Fuels Agency. 

It is expected that, following the introduction of the RTFO, the amount of duty rebate - currently 20p per litre on bioethanol - will be linked to the greenhouse gas savings of the fuel.

British Sugar is able to supply bioethanol with full traceability including a full life cycle analysis. This is necessary to demonstrate that the whole process of production, including crop growing, fermentation and distribution, is carried out in such a way that genuine environmental benefits are delivered.