The Act introduces a Biofuel Obligation to help Ireland accord with the EU's Renewable Energy Directive that requires all Member States to have 10% of their transport energy as renewable by 2020. The obligation encourages use of biofuels and is intended to boost the biofuels sector by providing it with certainty of investment and growth while protecting consumers from fluctuations in the price of hydrocarbon fuels. The obligation is administered by the National Oil Reserves Agency (NORA). The obligation compels oil companies supplying road transport fuel to ensure that biofuels represent a certain percentage of their annual fuel sales. This percentage was initially set at a default rate of 4.166%, increasing to 6% by volume (or 6.383% by reference to petroleum products) from 1 January 2013. It was last amended by the National Oil Reserves Agency Act 2007 (Biofuel Obligation Rate) Order 2012.

This Act was further amended by the Climate Action and Low Carbon Development (Amendment) Bill of 2021.