In the Financial Times, Partner Matthew Sharp discusses UK Renewable Transport Fuel Obligation (RTFO) compliance

The RTFO is a complex UK environmental credit scheme that plays a key role in driving decarbonisation in the transport sector.

The FT article claims that:

Global commodities trader Archer Daniels Midland is exploiting a loophole in UK green regulations to claim a double subsidy on the production of biofuels as a surge in imports threatens to wipe out the domestic ethanol industry

Brown Rudnick Partner, Matthew Sharp is quoted in the article:

Matthew Sharp, of law firm Brown Rudnick, which advises companies on environmental regulatory issues, said the “sheer volume of supply” may have led the government to ask: “is it actually waste product that's being used?”

The article concerns the supply of ULDUR (which is used to produce bioethanol); that supply comes exclusively from the US to the UK. 

ULDUR is a processing residue generated during the corn wet mill sweetener refining process.

Since its approval as an RTFO feedstock in October 2022, ULDUR-derived ethanol has risen from zero to 339 million litres in 2024 - it now dominates the supply chain. This is causing significant implications for UK producers of bioethanol; wheat-based ethanol produced in the UK has dropped from 204 million litres supplied in 2023 to 87 million litres supplied in 2024. This has in turn led to a government consultation in March 2025 questioning the environmental credentials of ULDUR and whether it should continue to receive RTFO credits. 

The consultation states:

The double reward status of a feedstock is primarily determined by whether or not there are other economically viable alternative end uses for a material. This is the matter that we are asking for evidence on.

In other words, questions are being asked as to whether ULDUR is in fact a waste product. ULDUR only qualifies under the RTFO if it is a waste manufacturing biproduct. 

Matthew comments that:

Given the increased scrutiny surrounding ULDUR, suppliers would be well advised to audit their ULDUR supplies and the relevant contractual provisions governing those supplies to make sure they are comfortable that the supply qualifies under the RTFO. 

Suppliers should take urgent legal advice if they become aware of any misclassification of feedstocks under the RTFO. 

Matthew has advised on a number of RTFO-related disputes. Matthew explains:

It’s an area I expect to see more activity in - particularly as regulatory scrutiny and commercial disputes in this area continue to grow

Read the full FT article here. You can also read our recent explanation article on the RTFO and RTFO disputes here.