Arable farmers will be left at a competitive disadvantage to their European neighbours after the Government proposed to set the crop cap to one of the lowest levels in Europe, the NFU says.

The Department for Transport has proposed the crop cap be set at 4% in 2018, decreasing incrementally until it reaches 2% by 2032. The NFU is calling for the cap, which governs the volume of crop-based biofuels allowed to be used on UK roads, to be set at the maximum possible level of 7%. Many other EU member states have opted for 7% - as per set out in the EU directive.

The biofuels market is an important source of high protein feed, producing nearly 1m tonnes, and provides British farmers an important outlet for their crops and provides security for many producers.

NFU combinable crops board chairman Mike Hambly said: “The NFU is disappointed that the crop cap is proposed to be set at one of the lowest levels in Europe, a decision which clearly puts British farmers at a competitive disadvantage to their European neighbours.

“The initial cap of 4% is a welcome increase from the initial Government proposals of 2% but the intention to incrementally decrease the crop cap sends mixed messages to industry.

“However, the NFU is pleased to see Government commit to raising the renewable blending obligation.

“The security of the biofuels market gives farmers the confidence to make investments and manage volatility, which ultimately benefits farming’s productivity and the nation’s food security.

“As Brexit brings times of uncertainty, it is vital for the industry that farmers have access to as many markets as possible.

“An industry that produces enough high protein animal feed for circa 40% of the UK dairy industry, displacing imported feed, is one that should be strengthened and supported by the Government, not constrained.

“Government support and commitment to British farming is needed across all departments. This issue demonstrates the need for policies that practically support profitable, productive and progressive farming.”

A low crop cap would severely impact the UK’s production of bioethanol – the two plants in the UK can process 2.2 million tonnes of wheat, or circa 15% of the UK wheat production.

The UK biofuels market can play a major part in decarbonising the transport industry and the NFU is also disappointed to see that biomethane from anaerobic digestion has been excluded from the list of  “developmental fuels”.