Oct. 7 (Bloomberg) -- Royal Dutch Shell Plc is one of four suppliers meeting U.K. targets for mixing biofuels with road fuel, while BP Plc and Total SA are among companies falling short so far, according to the Renewable Fuels Agency.

Under the Renewable Transport Fuel Obligation, suppliers must ensure that 2.5 percent of fuel sold at U.K. pumps consists of biofuels, which are made from crops and grasses. Biofuels amounted for 2.6 percent of total supplies in the three months to mid-July, the government agency known as RFA said today in a quarterly report on its Web site.

The requirement will rise to 5 percent by 2010, a 1.25 percent annual rate of growth. Of the biofuel supplied now, biodiesel accounts for 84 percent and bioethanol 16 percent, RFA said.

Biofuels emit less greenhouse gasses than fossil fuels. Harvest Energy Ltd., Greenergy Fuels Ltd. and Mabanaft are meeting their target for now, according to the agency's quarterly report.

The target means that for that volume of biofuel, carbon dioxide emissions are reduced by about 40 percent, compared with ordinary fuel. Different biofuels vary in the amount of carbon emissions they save.

Fuel suppliers currently missing the U.K. target include BP, Petroplus Holdings AG, Ineos Group Holdings Ltd., Total, Exxon Mobil Corp.'s U.K. unit Esso, Murphy Oil Corp.'s unit Murco, Prax and Topaz. RFA said suppliers were mostly ``close'' to the target.

Former Transport Secretary Ruth Kelly in July said that the target pace should slow to annual increases of 0.5 percent to give scientists more time to study the effects on the environment and food production.

Target Missed

Chevron Corp. missed the target by the largest percentage, and is investigating possible misreported data with its biodiesel suppliers. For ConocoPhillips, revisions to incorrect data will likely mean it beat the target, according to the report.

To meet targets, companies can submit certificates awarded for producing their own biofuels, or buy certificates from other suppliers, RFA spokesman Chris Malins said today by phone. Companies can also ``buy out'' of their requirements for 15 pence ($0.26) a liter of fuel that should have been from biofuels.

While companies can't yet be fined or sanctioned for missing targets, they are required to report their progress. The RFA will announce the verified data in April 2009.

The government had set three targets: the percentage of biofuel meeting an environmental standard, annual greenhouse gas savings and data reporting of renewable fuel characteristics.

``Esso, Petroplus, Prax and Topaz are currently failing to meet any of the three targets set by government,'' the report said.

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

Last Updated: October 7, 2008 11:02 EDT