LONDON (Reuters) - Britain is set to introduce E10 gasoline, a motor fuel blended with 10% renewable fuels, by September this year, a move that could cut annual CO2 emissions by 750,000 tonnes, the government announced on Thursday.
Current gasoline blends in Britain contain no more than 5% ethanol (E5), but the introduction of the E10 grade could cut transport emissions equivalent to removing 350,000 cars from the roads, the government said.
Bioethanol is made from materials including low-grade grains, sugars and waste wood.
"Using bioethanol in place of traditional petrol can reduce CO2 emissions and, therefore, increasing the ethanol content of petrol could help us meet our climate change targets," the government said.
Farmers welcomed the move which should lead to a significant rise in demand for some crops.
"Not only will this mandate provide a boost for the UK wheat and sugar sectors, it will play an important and immediate role in delivering the government's green agenda, especially as it may be some years before we are able to make a countrywide shift to fully electric vehicles," the National Farmers Union said in a statement.
The government said that the E5 blend would remain available at pumps in the "Super" grade for older vehicles that may not be compatible with E10.
Britain consumed around 11.7 million tonnes of gasoline in 2019, according to the latest government data, accounting for about a third of overall road transport fuel use.
The move is a major boost to Britain's biofuels producers with Vivergo Fuels announcing plans to reopen a bioethanol plant in Hull, north-eastern England, which has been closed since September 2018.
Vivergo Fuels, a unit of Associated British Foods (LON:ABF) PLC., said the plant would start manufacturing ethanol in early 2022.
The bioethanol plant can produce up to 420 million litres of bioethanol and use up to 1.1 million tonnes of feed wheat.
The government statement also said a bioethanol plant owned by Ensus in north-east England would increase production.
Ensus is a unit of CropEnergies.
"Ensus is even now running at a high capacity usage level. But naturally such a market expansion is very welcome in view of the plant’s future development," said CropEnergies Chief Executive Stephan Meeder, adding he expected the British ethanol market to grow by up to 600,000 to 700,000 cubic metres per year.