The government is to end the biofuel subsidy that subsidises biofuel companies in the UK from 1 April.
The government announced the news in last November's Pre-Budget Report announcing the end of the "20p per litre duty differential" on biofuels.
Increasing doubts over the likely carbon benefits and sustainability of first-generation biofuels has led the government to withdraw its financial support for biofuel producers.
However, the duty differential of 20p-per-litre will continue for biodiesel made from used cooking oils, thought to be a greener biofuel, for two years.
The UK has also delayed its 5 per cent biofuel target as part of the Renewable Transport Fuels Obligation (RTFO), as doubts over the sustainability of biofuels increases.
Biofuels are currently added to all petrol and diesel sold in the UK at three per cent per litre, meaning that the removal of the subsidy will raise the cost of fuel at the pumps. And biofuel and biodiesel blends are a common sight at larger petrol stations.
Supermarket Morrisons, the largest supplier of biofuels in the UK, has announced that it will stop selling B30, a mixture of diesel and 30 per cent rapeseed and recycled vegetable oil, from 1 April as a result.
Morrisons will continue to sell E85 – a blend of ethanol – at its petrol stations in the UK.
The biofuel subsidy will end on 1 April, potentially adding around 1p per litre to the cost of fuel.
A rise in fuel duty of 3p per litre is also planned for April, while wholesale petrol prices continue to rise, driven up by restricted supply.