Promotion of the Use of Biofuelsin Road Transport

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I am grateful that the Under-Secretary has agreed to meet my constituents and me to discuss the issue. My hon. Friend the Member for Ludlow made the point that a Minister from the Department for Environment, Food and Rural Affairs should be present at today's Committee. I am delighted to say that a Minister from that Department has agreed to come to the same meeting as the Under-Secretary. I hope that some joined-up thinking will develop as a result of that meeting, and from other discussions between Departments.

I note the Minister's concerns about protecting biodiversity and the need to consider the entire energy environmental picture, including the impact of growing the crops. However, the agricultural community has come a long way in cleaning up its act and reducing reliance on pesticides and herbicides. With the technology available, they can much better focus the use of those products in producing crops. There has been progress not only in the use of fossil fuels but in cleaning up agriculture. The Government have given the green light, in that they have produced the 20p differential in duty, but more help is needed to make progress.

As the Commission says in its proposals, there is strong growth in transportation oil production. If we are to achieve the Kyoto targets and improve security of energy supplies, we need action rather than a continued debate about what might be the best approach. There needs to be progress now. I recognise that considerable criticism has been voiced throughout the European Union about the proposals, and that some changes to them will inevitably be made. It is important that what emerges at the end of that process is not watered down waffle, but tough targets that will achieve the Kyoto commitments and—as a priority—reduce Europe's reliance on crude oil from the middle east.

11.55 am

Mr. Jamieson: We have had a useful, well informed and helpful debate, and I am grateful to hon. Members for their questions and speeches. We were treated to a little arithmetic by the hon. Member for Brentwood and Ongar when he realised that the 20p in the pound reduction on 5 per cent. biodiesel in fuel actually means 1p per litre, and I congratulate him on getting it right. That 1p reduction probably reflects the average 1p extra cost of producing biodiesel fuel. The cost at the pump is therefore no different from conventional fuel, but the incentive is biased towards to the production of the biodiesel.

The hon. Gentleman asked about safeguards on the quality of biofuel. Blended fuels need to meet the same standards as mineral diesel, and a number of other quality parameters. He also asked about engines. He was right to say that many of the engines being produced now would seize up if they

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used a high biodiesel blend, or if they used it neat. I believe that the ends of the injectors would blow off and all sorts of other things could happen. However, the manufacturers provide a warranty for their vehicles up to a 5 per cent. blend of biodiesel.

Mr. Pickles: Clearly the Under-Secretary is right about the 5 per cent., but the documents before us envisage a blend of 5.75 per cent. I have talked to a number of people in the industry, and they are of the opinion that an attempt is being made to achieve a standard on the biodiesel element of the blend. Are they correct?

Mr. Jamieson: No legislation exists to define requirements for the quality of biofuels, but the oil industry has produced a draft industry standard. The hon. Gentleman rightly said that we have reservations about the second proposal that we are considering today, which is for a 5.75 per cent. blend by 2010. Manufacturers will, of course, have time to respond, but with present technology that would present some challenges.

The hon. Gentleman went on to say that we should not give subsidies but we should give tax breaks. Tax breaks are probably the same as subsidies—but my hon. Friend the Paymaster General might be more proficient in answering that point. However, we are providing fiscal incentives in order to move away from conventional polluting fuels to less polluting and more environmentally friendly fuels. If he reflects on that, he will see a clear if subtle difference.

The hon. Gentleman touched on the security of supply, and spoke of our meeting some of the targets. He rightly pointed out that our weather is variable, as it is in most of northern and central Europe. A bad harvest could lead to countries having to import vast amounts of biofuels—probably from countries outside the EU. If that happened, the market could dictate whether those fuels were produced in an environmentally friendly way. In fact we could find ourselves forced to use fuel produced in a less environmentally way than we had intended.

The hon. Gentleman made a scurrilous attack on me about hydrogen—

Mr. Pickles: I would hardly call it scurrilous.

Mr. Jamieson: It was wounding. He seemed to imply that we had closed off our ambition regarding hydrogen. That is not the case.

There may be a profound difference between the thinking in this country and that in other European countries and parts of the scientific and manufacturing community. Our objective is to reduce carbon produced by transport. We do not see our job as trying to second-guess what will replace current fuels. That will develop with technology. Even in the past five years, technology has developed in ways that we, and perhaps the industry, did not expect. We want some such technologies developed.

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For example, we have seen hydrogen vehicles that use conventional and often efficient engines in conjunction with electric motors and electricity storage. In the interim of our journey towards cleaner output from transport, we see such vehicles as an important contributor.

In years to come, hydrogen may eventually replace fuels as we know them in transport. However, there is a long journey to make and many bridges to cross before then. If there is to be widespread hydrogen use, hydrogen will have to be produced in an environmentally friendly way. At the moment, it is largely produced by electrolysis, which requires electricity produced by conventional means. The point at which all that happens may be beyond the scope of our lives—

Mr. Pickles: Speak for yourself.

Dawn Primarolo: Yes, speak for yourself—I am going to live a long time.

Mr. Jamieson: Such developments may be within the scope of my hon. Friend's life if she lives as long as the late Queen Mother, but the time scale is certainly long. We would have to reach a point at which electricity was produced by environmentally friendly means and then produced hydrogen. We are not opposed to hydrogen.

The newspaper article to which the hon. Member for Brentwood and Ongar referred was about BMW, the internal combustion engine and the use of hydrogen. We do not say whether that approach, which uses cryogenic storage of gases, is right or wrong. It causes difficulties, because there is 2 per cent. or 3 per cent. leakage of the fuel a week. The equation has many complicated variables with which we have to wrestle.

The hon. Member for North Norfolk made a considered contribution and mentioned the security of supply. I take his point, and he made some good comments about the impact of transport fuels on the environment. He said that there had been slow progress in the replacement of fossil fuels. We in government see the process very much as a journey towards a low-carbon future. We have not said that we will plump for one method of achieving it as opposed to another. A variety of routes will probably give us some success, and biodiesel will have a part to play.

We do not think that the Commission's approach on the targets directive—to set targets in the assumption that one size will fit all 15 countries—is appropriate. Individual countries should have much more say in how they achieve what we consider indicative amounts. They should find their own way to meet targets.

The hon. Gentleman mentioned the Curry report, which I covered fairly fully in my original remarks. We have to consider the whole footprint of the production of biodiesel when providing any fiscal incentive. There are enormous variables, and we must

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consider the environmental impact of all the set-aside that he talked about. If it were all used for the production of biodiesels, we would have to think carefully about production methods and their impact on the general ecology and aesthetic appearance of the countryside. A raft of issues would be important.

Perhaps it is because the hon. Gentleman comes from a rural community that he talks a lot about subsidy. We are providing incentives, and in many cases it is now up to the industry to respond to them and use the market to push forward the products that it thinks will be advantageous.

The debate has been helpful and useful. It seems that although there is not unanimity on all the issues, there is wide agreement on many of them, especially those contained in the communication, and on where we are aiming for a more carbon-free transport future. There will be differences within the Committee about how we might achieve that future, with some emphasising certain fuels and methods and

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others emphasising others. Notwithstanding that, I hope that the Committee will agree to the motion.

Question put and agreed to.


    That the Committee takes note of European Union Document No. 15500/01, Commission Communication and two draft Directives on the promotion of the use of biofuels for transport, and provision for Member States to apply differentiated rates of excise duty in favour of biofuels; considers that the objectives of security of supply and climate change abatement can best be achieved by an approach which promotes renewable transport fuels as a whole, and reflects the individual circumstances of Member States and EU renewable energy policy through the setting of indicative, flexible targets; welcomes the principles of making it easier for Member States to set a lower rate of duty on cleaner fuels such as biofuels; but considers that the detail of the Commission's approach (in particular, the links with current duty rates for conventional fuels and with oil prices) should be questioned.

          Committee rose at five minutes past Twelve o'clock.

    The following Members attended the Committee:
    Benton, Mr. Joe (Chairman)
    Dean, Mrs. Janet
    Francois, Mr.
    Gibson, Dr.
    Green, Matthew
    Lamb, Norman
    Quinn, Lawrie

    The following also attended, pursuant to Standing Order No. 119(5):
    Caplin, Mr. Ivor (Hove)
    Jamieson, Mr. David (Parliamentary Under-Secretaryof State for Transport, Local Government and the Regions)
    Pickles, Mr. Eric (Brentwood and Ongar)
    Primarolo, Dawn (Paymaster General)

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Prepared Wednesday 1 May 2002