Rendering plants can now continue to burn the fuel which means operators will not have to convert to burning heavy oil, saving the sector about £50 million a year.
Defra's decision came following meetings with the MLC, United Kingdom Renderers' Association, British Meat Processors' Association, Scottish Association of Meat Processors, the Association of Independent Meat Suppliers and farming unions, who managed to persuade Elliot Morley, Minister of State at Defra, to rethink the decision.
Said a Defra spokesman: "In view of the likely environmental disbenefits and the potential impact on customers of switching to alternative fuels, the Minister and the UKRA anticipated that in the meantime, and subject to satisfactory discussions with regulators, tallow would continue to be used as fuel by rendering plants until and unless otherwise required by their regulators."
The UKRA will now meet Environment Agency bosses to come up with a strategy about moving towards complying with the European Commission's Waste Incineration Directive so renderers can continue using it as environmentally-friendly fuel. It looks likely that a final decision will be made once the European Commission study on the subject is published later this year.
The UK government had reclassified the rendering by-product as waste rather than a CO2 neutral fuel despite the fact that most other European countries had interpreted the rules differently and had not insisted on any changes. The industry was forced to revert back to fuel oil burning, or look for alternative environmentally-friendly oils. Many argued that the continued burning of tallow in rendering plants would also be more beneficial for the environment than switching to alternative fossil fuels.
Alistair Donaldson, executive manager of the Scottish Association of Meat Wholesalers, said the decision had brought the industry back from the brink. "It's a sensible decision - we now have to try and work with officials to try and get some activity in Brussels and not just sit twiddling our thumbs until the European Commission study comes out in the autumn."
UKRA chairman Gordon Braide added: "The meeting with Mr Morley was very constructive. We believe it will lead to a satisfactory conclusion to the tallow and WID issue for all of us involved in meat production, as well as benefiting the environment significantly by reducing carbon emission levels."