Conclusions and recommendations
1. We
too would like to see how Government balances the considerations
of the environment, the economy and society in developing its
policy on biofuels. (Paragraph 13)
2. The Treasury should
publish clear data showing the current and future levels of taxpayer
subsidy aimed at promoting a renewable energy industry. Such information
would enable a better informed debate to take place as to how
a broad based renewable strategy should develop. (Paragraph 26)
3. Although increasing
the use of biofuels may not be the most efficient way to reduce
greenhouse gas emissions when considering the whole economy, we
agree with the Treasury that all sectors should make a contribution
towards reducing the United Kingdom's emissions. Biofuels offer
one attractive means of doing so for transport, although other
measures such as engine efficiency and managing the demand for
road transport are also important. (Paragraph 28)
4. There is not yet
clear enough evidence of what will be the impact of expanding
biofuels production on habitats and biodiversity here and elsewhere:
but the prospect of greatly increased planting of autumn-sown
oilseed rape or winter wheat causes understandable concern. We
call on the Government to commission a full scientific study to
assess the effects on biodiversity of expanding the cultivation
of biofuel crops. (Paragraph 32)
5. While we welcome
the development of new markets for crops and opportunities for
farmers to diversify and respond to market demands, we have not
seen enough evidence to allow us to make an accurate assessment
of what impact increasing the use of biofuels would have on farm
incomes. We recommend that Defra, as a matter of urgency, carry
out an economic appraisal of the effect that a UK-based biofuels
industry would have on farming. (Paragraph 40)
6. Estimates of the
number of jobs that would be created by a UK-based biofuels industry
vary widely. The extent to which a domestic industry would boost
rural prosperity is of crucial importance in determining whether
home-grown or imported biofuels should be used. We call on all
parties involved to publish robust models with which to back up
their claims. (Paragraph 44)
7. Whatever targets
the Government chooses to set under the Biofuels Directive, it
must make firm decisions quickly if farmers and processors are
to be able to plant crops and build processing plant in time to
meet the targets. (Paragraph 46)
8. We share the Treasury's
view that a greater level of duty derogation on biofuels introduced
now would be more likely to encourage imports of biofuels than
the development of domestic production. (Paragraph 49)
9. If the Government
decides to increase the support available for the production of
biofuels, any such support must be designed to achieve the underlying
policy goal it has set. For example, an increase in the duty derogation
may encourage imports, but this may not matter if the prime policy
goal is to reduce emissions. If the Government wants to further
its rural development objectives as well, a combination of other
instruments such as grants to support capital investment may be
necessary. (Paragraph 50)
10. If the Treasury
is not prepared to subsidise the biofuels industry directly, it
should evaluate different strategies for minimum cost introduction
of biofuels, while making the price attractive to consumers. (Paragraph
54)
11. It is clear from
the evidence we took from Defra and the Treasury that the departments
involved do not speak with one voice. In a policy area such as
this it is inevitable that different departments will each have
a legitimate interest and perhaps different priorities. However,
we deplore the fact that the Government has not nominated any
one Department to lead on biofuels and consider that this is a
prime reason for the slow progress that has been made in this
area. (Paragraph 56)
12. The debate about
the need for Governm7ent support for domestic biofuels production
has been going on for some time without reaching a firm conclusion.
The Government's biofuels policy still appears to be muddled and
unfocussed: it has expressed support for biofuels but the mechanisms
used to promote their use have had little effect so far. (Paragraph
57)
13. We encourage Defra
to work closely with the statutory conservation agencies to find
ways to maximise the benefits biofuels can offer to conservation
and to minimise the negative impacts associated with some biofuel
crops. If imported crops, or fuels derived from them, are to furnish
a significant proportion of the biofuels used in the United Kingdom,
we encourage Defra to develop cost effective ways of auditing
their environmental impact in the countries in which they are
produced. (Paragraph 60)
14. Defra has responsibility
for championing sustainable development within Government. The
development of a sensible biofuels policy could provide a good
showcase for the Department's thinking in this area. Defra should
set out how the various environmental, economic and social costs
and benefits represented by the different options have been weighed
against one another. This would allow the Department's stakeholders
to judge the policy fairly. At present it appears that the Government
is still testing the waters with regard to supporting the development
of a domestic biofuels industry and the current level of support
reflects this ambivalent attitude. The Government should recognise
that compared to other forms of renewable energy, either imported
or domestically produced, agriculturally derived biofuels do represent
a predictable and secure source of energy and this fact should
be given due weight in deciding future policy in this area. (Paragraph
61)
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