Memorandum submitted by the Environmental
Industries Commission (EIC)
EIC was launched in 1995 to give the UK's environmental
technology and services industry a strong and effective voice
with Government.
With over 290 Member companies, including suppliers
of clean and low greenhouse gas fuels, such as biodiesel, alternative
fuels, diesel water emulsions and low ash lubricating oils, suppliers
of catalysts and catalysed components and consultants covering
transport and the environment, EIC has grown to be the largest
trade association in Europe for the environmental technology and
services (ETS) industry. It enjoys the support of leading politicians
from all three major parties, as well as industrialists, trade
union leaders, environmentalists and academics.
INTRODUCTION
We note that the Committee is interested in
number of strategic issues related to carbon emissions from transport.
Our response focuses on the issue of "what specific steps
the department should now take to reduce road transport carbon
emissions . . . over the next decade".
The transport sector is responsible for one
quarter of the UK's carbon emissions and this is growing rapidly,
threatening to derail Government targets to reduce carbon emissions.
It is, therefore, clear that urgent action needs to be taken to
reduce transport carbon emissions.
1. BIOFUELS
The technology to produce biofuels is still
developing, however, there is ample evidence from Government and
independent studies to demonstrate that biofuels are a promising
technology for tackling carbon emissions from the transport sector.
For example, the report published by DfT in July 2004 " Liquid
Biofuels and Renewable Hydrogen to 2050" concludes that "It
would be possible, by 2050, to reduce total carbon emissions from
road transport to very low levels, through significant use of
renewable hydrogen or biofuels. This could help the UK to achieve
its goal to reduce CO2 emissions by 60% by 2050".
The current duty differential of 20p per litre
introduced for biofuels has had some impact in stimulating the
production and use of biofuels. However, this is not sufficient
for biofuels to become a significant part of the fuel supplied
at the pump. EIC has, therefore, supported the introduction of
a Renewable Transport Fuels Obligation and continues to discuss
regularly with DfT, Defra and Treasury the details of such a scheme.
EIC has put forward the following as key features of the RTFO
it believes are necessary to support biofuels:
— RTFO Targets of 3/4/5% for 2008/9/10.
— RTFO Targets to rise consistently
beyond 2010 subject EU fuel specifications.
— A Buy Out price of 30ppl.
— Duty derogation of 20ppl from April
2008 to April 2009.
— A significant overlap between the
duty derogation and obligation regimes.
— No implied increase in duty contribution
from Treasury beyond 2008.
— Support for accreditation of carbon
and sustainability issues.
EIC has also consistently called for the RTFO
to be introduced earlier than 2008 if it is to make a real contribution
to meeting the UK's target for reducing CO2 emissions
by 20% by 2010.
We would be happy to supply the Committee with
a more detailed paper on the RTFO should that be of interest.
The other key area for EU and UK policy is addressing
the restriction on using more than 5% biofuel in regular fuel
supplied at the pump. It is vital that the DfT encourages the
EU moves quickly to ensure the relevant standards allow a higher
level of inclusion.
2. AIR QUALITY
AND CLIMATE
CHANGE
As DfT brings forward policies to tackle transport
carbon emissions EIC believes it is important that these work
with policies to tackle the continuing air quality problems associated
with vehicle emissions—air quality and climate change objectives
need not conflict.
For petrol cars, experience with Euro 4 certifications
and projections for Euro 5 show that NOx emissions can be driven
down with no associated penalty for CO2 emissions.
Developments in emissions control systems for lean burn petrol
engines, using direct injection, now enable these vehicles to
deliver low NOx emissions in combination with lower CO2
emissions.
The last decade has also seen considerable progress
in the performance (both fuel economy and lower pollutant emissions)
and popularity of diesels. Over the next 10-years, tackling diesel
pollutant emissions to avoid air quality objectives being compromised
by the growing popularity of diesels needs to be a priority.
3. LOW CARBON
TECHNOLOGIES
The Government has set out a commitment to invest
in and exploit the competitive and environmental potential of
low carbon transport technologies through its Powering Future
Vehicle's Strategy (PFVS). One of the recommendations of this
was to use public procurement as a means of overcoming the innovation
gap (market risk based on higher incremental cost) for new low
carbon and hydrogen technologies.
EIC Members believe there is considerable potential
to stimulate low carbon technologies through public procurement
and would urge DfT to support the proposed Directive on this topic
recently proposed by the European Commission.
Government regulation is also of particular
importance in the environmental sector. As the market fails to
included environmental costs, market mechanisms cannot be relied
upon. Environmental benefits are a social, rather than an individual,
good and consumers typically will not drive development of the
market alone.
The development of low carbon vehicle technologies
will require clear, long-term and progressive regulation in the
environmental sector. This is particularly important where innovative
technology is involved. For example, the US Federal Clean Air
Acts and the Californian Zero Emission Vehicle Mandate were instrumental
in creating the market for automotive emission control catalysts
and for automotive fuel cell development respectively. Comparable
regulation in Europe has been weaker and has retarded the development
of European adoption.
The example of the RTFO is a good example of
Government creating a clear regulatory framework to overcome market
barriers to the take up of a new low carbon technology.
4. HYDROGEN TECHNOLOGIES
The United States and Japan are investing heavily
in R&D and making the first investments in infrastructure
(notably the Californian Hydrogen Highway) necessary to enable
them to exploit the potential of hydrogen to deliver sustainable,
energy diverse and energy efficient economies meeting quality-of-life
objectives.
Given the long term potential of hydrogen it
is important that EU and UK R&D funds are used to progress
innovative technologies in key areas like hydrogen storage and
fuel cell power trains.
February 2006
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