Select Committee on Environment, Food and Rural Affairs Written Evidence

Memorandum submitted by Iogen (U44)

  This follows evidence submitted by Iogen in April 2004 in response to the enquiry into Biofuels.

  Carbon emissions from the transport sector, which have grown by 62% in the last 20 years, now account for 27% of our greenhouse gas emissions (Transport Trends Summary: DfT 20 May). 85% of these emissions come from road transport (DTI Energy White Paper). Although the Government has announced an aspiration to move towards "zero emissions" from vehicles under the Department for Transport's Powering Future Vehicles Strategy, the policies to deliver this have yet to be put in place. Whilst EU car manufacturers struggle to meet their voluntary target of 140 g/km emissions of carbon dioxide by 2008, carbon emissions from vehicle fuels continue to rise without constraint.

  I am therefore writing to bring your attention to the advantages cellulose ethanol (ethanol from crop residues such as wheat straw) has to offer and the major contribution it is poised to make to future sustainable fuel production.

  Iogen, based in Canada, is the world leader in producing cellulose ethanol which has been shown by independent studies to make a net carbon reduction of around 90% compared with conventional petrol. In conjunction with our partners and biggest investors, Royal Dutch Shell, Iogen has built a £17 million pre-commercial cellulose ethanol plant in Ottawa which is now in continuous production. The technology is "ready to go" and we are in the process of finding a location for the world's commercial scale industry.

  Cellulose ethanol is one of the most cost effective ways of making greenhouse gas emission reductions from the transport sector and could be blended up to 10% today in any vehicle with no modifications to engines or forecourts. Furthermore, a domestic industry would provide rural communities with a sustainable, new income stream based from non-food portion of crops, and improve energy security of supply.

  Following a detailed feasibility study we have identified that the UK's Yorkshire Humber region would also be an excellent location for the first cellulose ethanol plant. There is the potential for at least two 150 million litre plants based on existing straw supplies, and an estimated further eight similar size plants based on dedicated energy crops throughout the UK.

  As well as the UK, Iogen is also focussing its efforts on Canada, the US and Germany in particular. In Canada Ontario Premier Dalton McGuinty's Liberal government is set to unveil legislation that would require gasoline to contain 5% ethanol by 2007 and 10% by 2010. In the US, the draft Energy Bill includes targets for biofuel consumption with a 2.5 to 1 bias for cellulose ethanol for the same reason.

  Since 2001 we have had an ongoing, positive dialogue with the UK Government. The enhanced environmental benefits of cellulose ethanol were recognised in the 2003 Budget and the Energy White Paper. We now sincerely hope that the Government will proceed with haste towards establishing a Renewables Obligation for Transport Fuel with long term targets (like those that apply to the renewable power sector) and a framework that encourages the greenest technologies. This could be done in a number of ways, such as increased duty allowances, different levels of tradable credits for different technologies, loan guarantees or capital grants. Above all in the UK cellulose ethanol should be regarded as a major, untapped and cost effective opportunity to reduce carbon dioxide emissions and mitigate global warming, and one that cannot be overlooked if we are to contemplate the Royal Commission on Environmental Pollution's recommendation that the Government should reduce carbon emissions by 60% by 2050.

18 November 2004

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