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Small biodiesel producers will no longer have to pay duty of their fuel, while medium sized manufacturers will only have to pay quarterly rather than monthly. Under changes to the duty process which will come into force on Saturday (30 June) only those producing more than 450,000 litres per annum will not see any changes to the amount or way they pay duty. An HMRC spokesman says: "We can confirm that, with effect from 30 June, producers of biofuel of less than 2,500 litres annually will no longer  need to pay any excise duty. Those producing up to 450,000 litres annually will only need to submit and pay returns quarterly.

"These changes have primarily been introduced to reduce the administrative burden on small and medium-sized biofuel producers. It will also allow businesses, or potential businesses, to explore the feasibility of biofuel production before being obliged to register and pay duty," he says. The 2,500 litre level will be monitored and the Government has stated it will consider the scope for raising the threshold after a year. There are currently about 1,400 biofuel producers in the UK and a large proportion do so for personal consumption and these will be the producers that benefit most form the changes.

Charles Cornish, director at Evergreen Biodiesel, says the 2,500 litre limit is only going to affect those producing biofuel in their garages and he suggests that many of these will not have been paying duty anyway. Evergreen produces about 400,000  litres of fuel a year and Cornish states that the £10,000 to £12,000 a month that he currently sends to HMRC will make a big difference to his cash flow if he is able to hang onto it until the end of a quarter. Paul Mugleston, office manager at Biosave, adds that the changes will help with cash flow, but "we're not far away from the 450,000 threshold so it will only benefit us for a couple of months".

"What would really benefit the biofuel industry would be a reduction in the duty we have to pay," he says.