Memorandum submitted by The Energy Crops
Company Ltd (Bio 06)
Please find below a brief series of responses
to the questions raised in the recent terms of reference.
Our responses are brief of necessity as we are
an early stage company whose efforts are focused upon commercialisation
of proven technologies in wood heating, which we believe can both
make a significant contribution to climate change targets, and
contribute to wider integrated renewables policy. The number of
enquiries into our industry sector is unhelpful on two fronts:
(i) They are very time consuming.
(ii) They are often divergent in suggesting
that one technology is preferable to another without suggesting
an overall plan or balance.
We believe that the rapid implementation of
current Best Available Technology (BAT) alongside clear and consistent
strategic goals is the best way to allow industry to develop an
efficient network of renewables. Industry will inevitably find
many ways to optimise and integrate these technologies creating
significant improvements in overall efficiency.
These efficiencies will only be unlocked by
operational industries, not by agonising over one technology at
the expense of another, or by comparing wildly optimistic theories
about future technology with outdated criticisms of those available
today.
Q1. What is the real scope for biomass and
biofuels to contribute to tackling climate change? What proportion
of the UK's energy and transport fuel needs could they provide?
Previous Government figures have suggested that
each can contribute up to 30% of the transport or heat sector
respectively.
Resource figures are usually taken in isolation,
and do not take account of synergies which will emerge from an
integrated system. Much of the work of the National Non Food Crop
Centre (NNFCC) can only be commercialised if a full scale biofuels
industry provides coproducts for biorefining, in the same way
that petrochemicals derive from fossil fuel production.
Q2. How cost-effective are biomass and biofuels
in comparison with other sources of renewable energy?
Currently not as cost effective as they can
be. Once the industry optimises the use of all of its output,
through a range of linked technologies, the economics will compare
favourably with both fossil fuels and other renewables. Support
for these industries will be required in the short term, but should
be judged against the longer term outputs achievable, not the
short term output of each in isolation.
Q3. How do biofuels compare to other renewables,
and with conventional fossil-fuels, in terms of carbon savings
over their full life-cycle?
Biofuels are currently capable of carbon savings
of over 70% compared to fossil fuels. They represent the only
realistic option for renewable transport fuels in the short term,
and are consistent with most envisaged technologies.
Q4. Not all biomass is equal—potential
carbon savings depend on, for instance, farming practice. What
can be done to ensure energy crops are sustainably produced?
Simple accreditation schemes should be based
upon existing schemes and data, for the links in the supply chain.
Resulting standards should be applied equally to imports and domestic
production.
Q5. What impact will UK Government and EU
actions have in increasing demand for, and production of, biomass
and biofuels?
None unless they are consistent. Government
must resist the temptation to micro manage the implementation
of renewables technology. Clear targets, simple fiscal and investment
regimes, and reasonable (five year) time frames are basic tenets
of industry, but alien to Government.
Q6. What level of financial and policy support
do bioenergy technologies require in order to achieve the Government's
targets for renewable energy?
Biofuels and biomass heat have clear cost disadvantages
to their fossil competition. Setting support mechanisms which
clearly exceed this cost differential for a reasonable period
will achieve a number of objectives:
— Give a kick start to two sectors
where renewables are trailing other European countries.
— Give the industries time to become
more efficient, individually and collectively before reducing
support.
— Avoid under compliance as imported
material becomes too expensive or is drawn away by more favourable
regimes.
— Reinforce to consumers that no energy
source is cheap in periods of market shortage. The rational players
invest in long term sustainable supply.
The correct support mechanisms are a combination
of duty concession and obligation for biofuels, and capital infrastructure
grants for biomass.
Q7. What impact might an increase in energy
crops in the UK and the rest of the EU have on biodiversity, production
of food crops and land use and the environment more generally?
If correctly managed, it could contribute to
improved biodiversity, and avoid negative impacts on food or the
environment.
Q8. Does bioenergy production constitute
the best use of UK land for non-food crops? Should UK and EU policy
focus on increasing domestic production of energy crops and biomass,
or are there merits in importing biomass for energy production,
or raw feedstock or refined biofuel, from outside the EU?
What else would we do with it? We have historically
enjoyed one of the most efficient farming communities in the world.
CAP reform raises the possibility of significant areas exiting
productive use when it could be put to productive use in the creation
of renewable energy, to economic, environmental, social and fuel
security benefit.
Q9. What more can be done to make more efficient
use, as an energy source, of the by-products of agriculture and
forestry (eg wood waste and other organic waste)?
There should be little if any waste from a correctly
integrated system. Co products from one process should form the
raw material for another. Integrated transport, and local networks
will also minimise transport waste, and use any spare process
energy for other processes.
Q10. What lessons can be learned from other
countries' experience in the production and use of bioenergy?
Strong early support and consistency will stimulate
a base to build upon. Few if any have unlocked the benefits of
integrating current technologies with agricultural outputs to
achieve long term goals, the UK can still lead the way.
The Energy Crops Company Ltd
February 2006
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