Select Committee on Environment, Food and Rural Affairs Seventeenth Report


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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