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Paddy Tipping: Before my hon. Friend leaves the powerful case that he is making for the coal industry—that coal can be economic, but environmental constraints cause problems—will he ask the Minister about the large combustion plants directive? If that is not implemented properly, it will kill the British coal industry.
Mr. Clapham: I am grateful to my hon. Friend for prompting me about the large combustion plants directive, which indeed relates to the Bill. The directive will become operative from 2008, and currently two options have been put forward. One option is the national plan approach, and the second is the emissions limit value approach. The national plan approach can be visualised as a bubble over the whole country, while the emissions limit value approach would be a bubble over each power station.
There are people in the industry who say that to adopt the national plan approach would close the British coal industry, because it would encourage generators to bring in low-sulphur coal from places such as South Africa, Australia and north America. If we adopt the ELV approach, generators will be encouraged to invest in their plant, which would be beneficial to the UK coal industry because UK coal could be burned in power stations. It is important that the Minister make the right decision. I understand that he is on the verge of making that decision, and that officials from his Department have inquired into the situation. Will he tell us whether he will adopt the ELV approach and avoid the national plan? That is very important.
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I return to the Bill and its proposals to set up a nuclear decommissioning authority. That is important because, as my hon. Friend the Member for Ochil (Mr. O'Neill) made clear, it is necessary to have a co-ordinated, uniform approach that would be better for the industry and the safety of the country. I hope that the Minister will tell us whether the nuclear decommissioning authority will be responsible for all the liabilities. As he will be aware, there are three areas of liability in the nuclear industry: spent fuel, radioactive waste and the decommissioning of sites. Do I take it that the decommissioning authority will be responsible for the entire remit relating to waste left by the nuclear operation?
It is important that the Minister should not abandon the UK coal industry at this point, as it requires only a modest amount of finance to survive. As I have already pointed out, it is approaching competitiveness. It would be a shame indeed if that industry were to disappear because of the lack of a small amount of finance. Coal's advantages are so great that the Minister should consider ring-fencing an element of the UK energy market. Coal is cheaper and more flexible than other sources, such as gas or nuclear. Some pundits have suggested that if we continue along our current route, we may well end up importing 75 per cent. of our energy needs by 2020. We need to avoid that situation.
In conclusion, I believe that the Bill sets out the route to ensuring the energy future of the UK. I hope that the Minister will consider in Committee what might be done to make more resources available for clean-coal technology. That technology is not just a matter for the coal industry. It is important to manufacturing industry because it would allow us to produce the sort of wares that would enable us to transfer technology in order to tackle the CO 2 issue in countries such as India and China. It is important that the Minister take the issue on board and make resources available for clean-coal technology.
7.6 pm
Mrs. Gillian Shephard (South-West Norfolk) (Con): I am extremely pleased to have the chance to contribute to the debate, and I particularly welcome clause 128, to which I shall address my remarks.
The clause enables the Secretary of State to introduce a renewable transport fuel obligation that would require specified sections of the road transport fuel industry to demonstrate that a specified proportion of their aggregate fuel sales were "renewable transport fuels". Its wording is perhaps over-gentle. It is not as strong as we should expect, given the Government's self-imposed environmental commitments, not to mention current, rising fears about fuel supplies and their costs. Nevertheless, it is welcome.
The Secretary of State was deeply cautious about the clause. When asked to expand on what she intends, she said she was "still looking at it". However, the Minister for Energy, E-Commerce and Postal Services may be cheerier in his concluding remarks—I hope that he will be.
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Part 1 should encourage those such as me and all other hon. Members who support the development of a UK biofuels industry. Clause 1 places on the Secretary of State the
"duty to ensure the integrity and security"
of energy supplies, and clause 2 specifically mentions energy derived from biomass and biofuels. Subsection (3) requires the Government or Government agencies to
"develop effectively sources of energy enabling the UK to avoid undue reliance on imports".
The lack of cheering or optimistic news about the likelihood of imports will strike the Government during the passage of the Bill. So far, they do not seem to have a clear notion of the opportunities missed by the Bill.
What contribution would the UK biofuels industry make to the aims set out in part 1—if the Government ever encouraged such an industry to develop? It would clearly contribute to security and sustainability. It would also contribute to the development of alternative markets for UK-produced crops, and its environmental contribution would be impressive. According to the Government's research from Sheffield Hallam university, the reduction in CO 2 emissions from bioethanol would be up to 70 per cent. That should be important to the Government. They have signed up to several environmental targets such as the Kyoto protocol, and have adopted a national goal of a 20 per cent. reduction in carbon dioxide emissions from 1990 levels by 2010. Their energy White Paper, which I assume informs the thinking behind the Bill, states:
"The UK should put itself on a path to a reduction in carbon dioxide emissions of some 60 per cent. from current levels by about 2050."
For good measure, the energy White Paper adds that
"fuels made from biomass represent an important potential route for achieving the goal of zero-carbon transport, creating new opportunities for agriculture in the UK, as well as globally."
I hope that the Minister is aware of the support in the House and the other place for biofuels. The Government should be aware of the cross-party support—illustrated by all the early-day motions, debates, questions and, indeed, delegations—for further encouraging biofuels. They should also know that, outside Parliament, a developed biofuels industry is supported by the CBI, the British Chambers of Commerce, the Institute of Food Research, the university of East Anglia, British Sugar, Friends of the Earth, the National Farmers Union, the Country Land and Business Association and so on.
I make those points to this DTI Minister because, although they have been made myriad times to his colleagues in the Treasury, DEFRA and other Departments, it is not clear that the Government have a sewn-up, cross-departmental attitude. There is every kind of incentive and support from inside and outside the House for the Government to give more encouragement to biofuels, but, so far, there has been little action. I hope that the Minister can dispel the unfortunate impression given by the Secretary of State that, even as a result of the Bill and the inclusion of clause 128, there will be more of the same—in other words, she is still looking at things.
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The debate about the need for Government support for domestic biofuels production has been going on for some time, without it reaching a firm conclusion. Last September, the Environment, Food and Rural Affairs Committee published its report, in which it said:
"Government bio-fuels policy still seems muddled and unfocussed. It has expressed support for bio-fuels but the mechanisms used to promote their use have had little effect so far."
Quite so. Our biodiesel industry, although valiant, is tiny and, as has been said several times, uses used cooking oil as its raw material. No bioethanol is produced in this country for transport purposes. That is the reality, despite the aspirations and hopes.
Things are, of course, very different in other nations. Spain has recently tripled its bioethanol production. France already produces 344,000 tonnes of biofuels a year, and Germany produces 130,000 tonnes. An immediate effect is that rape seed produced in the UK is exported by road and sea to Germany and France, where it is made into biodiesel, and it is then brought back to this country by road and sea. How sensible, environmentally or in any other way, is that?
It would be churlish not to recognise that a little progress has been made. In the Budget, the Chancellor announced the introduction of the 20p duty rate derogation for biofuels in 2005, so that the industry would have some certainty to plan investment; but, of course, it would have helpful if enough fiscal or other encouragement had been given at the same time to make the industry want to invest—a point made by my hon. Friend the Member for South-West Hertfordshire (Mr. Page). The consultation exercise announced in the Budget by the Department for Transport has only just been launched—rather late, given that the findings have to be produced by July this year. However, one of the options to be commented on is the principle in clause 128: a renewable transport fuel obligation.
I would welcome hearing more information from Ministers about whether clause 128 will move the UK further towards a biofuels policy, how they intend to proceed and what the timetable is. Hon. Members who share my enthusiasm for this cause—there are many—have, as I have already said, raised it with Ministers from the Treasury, DEFRA and the Department for Transport. Today, it is the turn of Ministers from the DTI. Will they be able to assure us that they mean business by including clause 128 in the Bill and that taking action on it will produce a secure, sustainable domestic source of fuel supply, provide a lifeline to the rural economy and fulfil the Government's environmental targets? We look forward to hearing from the Minister later this evening.
7.14 pm
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