LONDON (Reuters) - Britain is exceeding its 2.5 percent target for biofuels use in motor fuel but several oil companies have failed to meet environmental goals, a government agency said on Tuesday.
"These early figures demonstrate that some companies have risen to the challenge of sourcing biofuels to meet good sustainability standards," Nick Goodall, chief executive officer of the Renewable Fuels Agency said in a statement.
The agency said that several companies had, however, failed to report any biofuels as meeting qualifying environment standards, including BP and ExxonMobil's Esso.
Companies exceeding the environmental TARGET (TGT.NY) included Shell and Greenergy, which is part owned by retailer Tesco.
Britain does not currently require that environmental standards are met.
The target for biofuels use became effective on April 15 and the report covered the first three months up to July 14. The report put biofuels use at 2.61 percent of motor fuel, slightly above the 2.5 percent target.
A spokesman from the agency said Britain used about 270 million liters (1.70 million barrels) of biodiesel and 50 million liters (314,490 barrels) of ethanol in the quarter.
In addition to the 2.5 percent target, the British government supports biofuels through a tax incentive, which expires at end-2009.
Biodiesel accounted for 84 percent of biofuels use with soy the most important feedstock (41 percent) followed by rapeseed (27 percent), tallow (12 percent) and palm (11 percent).
Biodiesel is currently produced from vegetable oils, such as soy oil or palm oil, while fuel ethanol comes from grains or sugar. They are seen by supporters as a way to reduce dependence on fossil fuels, help farmers and cut emissions of the greenhouse gases believed to contribute to climate change.
Critics fear, however, that expanding production of certain feedstocks such as palm oil may have led to rainforest destruction and so accelerated climate change.
Over the past few years, there has also been fierce debate on whether biofuels are behind surges in food prices causing inflation as well as hunger in some countries.
Asked about the food or fuel debate, the spokesman said: "There are impacts from biofuels on food prices...and we have recommended the rate of increase should be reduced."
The European Union is expected to introduce a biofuels blending target of 20 percent for 2020, along with mandatory sustainability in force from 2010.
(Additional reporting by Nao Nakanishi)
(Reporting by Nigel Hunt; Editing by Peter Blackburn)
