Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Examination of Witnesses (Questions 202-219)


26 APRIL 2006

  Q202 Chairman: Good afternoon ladies and gentlemen. Welcome to a further evidence session on the Committee's inquiry into matters connected with biofuels. May I welcome at the outset representatives from the Biosciences Federation and the Royal Society of Chemistry. Dr Rebecca Rowe from the Plant and Environment Laboratory, the School of Biological Sciences at the University of Southampton, you are very welcome. Professor Tony Bridgwater from the Bioenergy Research Group at Aston University, also representing the Royal Society of Chemistry and Dr Jeremy Woods, who has been a friend and helpmate already to the Committee in these matters, from Imperial College Centre for Environmental Policy and Technology and also representing the Royal Society of Chemistry. We had hoped to be joined this afternoon by Dr Maeve Kelly from the Scottish Association for Marine Sciences, but sadly Dr Kelly has had to attend a funeral and we fully appreciate why she is not able to join us this afternoon. I gather, Professor Bridgwater, that on those areas where she was going to talk to us, particularly about biomass in the marine environment, you are fully up to speed on these matters and you will be able to accept questions from the Committee; for that we are very grateful indeed and we look forward to getting to that part of our activities. I should like to start by just trying to put policy into context, take your views about that and the way the Government have arranged the deckchairs on the whole question of bioenergy. Last week, we heard from the Biomass Task Force and I started my approach by drawing everybody's attention to an annex at the conclusion of the Biomass Task Force report which was two pages of schemes and initiatives sponsored by different bits of government trying to promote the use of biomass. I said at the time that I thought this looked rather bitty and it lacked coherence. I suppose when one looks at some of the other areas of bioenergy, one might level the same accusation at it, bearing in mind the number of departments which are involved and the sometimes oft quoted criticism of a lack of coherence of joining up when it comes to the use of bioenergy. I wondered whether, from your standpoint, you might have formed a similar view.

  Professor Bridgwater: It is true that the whole bioenergy system is a chain, starting with the planting of biomass, the growing, the harvesting, the transport, the conversion into higher value products and their utilisation in energy systems and you have therefore three government departments involved. One of the omissions or weaknesses of the whole system is consideration of the interfaces between the component parts of the chain. It is improving, but there is still a significant gap there.

  Q203  Chairman: How would you see it improved?

  Professor Bridgwater: By the support being given to the interfaces and by the relevant departments working more closely together to ensure that the bits are all joined up more coherently.

  Q204  Chairman: Dr Rowe you are nodding; your body language suggested you agreed with my line of questioning. What are your observations on this?

  Dr Rowe: I have to agree with Professor Bridgwater that we do need a more coherent policy. My experience is more with the farmers and the growers and from their experience, although there is obviously the funding for the initial planting of biofuel crops and crops like Miscanthus, they still have to wait then for four years and most of that money is taken in the establishment of the crop. They do not get a yearly income, so there is that missing and it would be helpful for them if the money were more spread out maybe. Then they also need to make sure they have a contract with somebody to take this off them afterwards. There is a need for groups to come together to form companies which can then supply, for example, power stations and if we are talking about wheat, you need a large quantity in a small place so you need companies to come together to do that and I feel that there is a gap there as well.

  Q205  Chairman: Do you as a group sense that the Government is fully committed to developing the UK biofuels industry?

  Dr Woods: The question to me is most clearly written in terms of the time horizons of policy. That is what emerges time and time again when you talk to industry or when you talk to any of the other sectors. The RTFO time horizon is far too short; that is pretty clear. It will not bring in industry or if it does, it will bring in half-hearted industrial involvement. It is equally true in the research and development sector that that is the case. You are absolutely right that there is not yet a cohesive strategy.

  Q206  Chairman: Just to bring this opening line of questioning to a conclusion, following on your observations Professor Bridgwater, are there any particular recommendations that you think the Committee should be aware of where you think there are problems? You were talking about improving the interfaces. What kind of things practically could be done in your judgment to address those issues?

  Professor Bridgwater: The timescale, as has just been mentioned, in that industry needs to have long-term security of funding support to encourage them to invest. They often look at a 20-year horizon: five years for planning and construction, 15 years for operation to give an adequate return on investment. In a number of areas like co-firing, for example, this is extremely successful, but there is a great reluctance to invest in major plant because of the lack of assurances over the investment for that. The second area that is important on the investment side is the gap between the successful research development and demonstration and the commercialisation. There is a great risk averseness by venture capitalists and industry and purchasers and there is what we call the "valley of death" between a successful demonstration of a technology, including the production and the conversion utilisation and its commercial implementation. More support might be given to helping that, so that we can overcome this black hole or this "valley of death".

  Q207  Patrick Hall: In your collective evidence, paragraph 2 in the executive summary, you say "Carbon savings would be greater in electricity production than in biofuels and so provision of land for this would exemplify `best use'".[13] This is presumably referring to electricity production. In terms of tackling climate change, why should we be producing biofuels at all?

  Professor Bridgwater: May I ask what biofuels means to each of you? Different sectors of the community do have a different understanding of what a biofuel is. To some people, it is the raw biomass produced, to some people it infers liquid transport fuels. I should find it helpful if you could define what you mean exactly by a biofuel?

  Q208  Patrick Hall: No, I am going to ask you what you meant by biofuels in your evidence because I have read out your evidence and you refer to biofuels in that.

  Professor Bridgwater: Biofuels is conventionally represented by the liquid transport fuels for use in the transport sector. It is sometimes used also to refer to the primary product produced by the biomass industry and I just thought it was helpful to clarify that. The biodiesel industry is very successful at the moment. There are five or six major plants either built or under construction but the biodiesel product can be assimilated only up to a certain level without detracting from the performance guarantees given by the engine manufacturers. Bioethanol is another biofuel, transport fuel, which is also limited in its usage because of vapour pressure considerations in the distribution, handling, filling and utilisation in engines. There is also the question of compatibility between different companies who are producing conventional transport fuels, because you cannot have one company adding, say, 5% and another company not adding it because most of the transport fuels are pooled. There is a problem with compatibility between different producers in different parts of the country and different standards for biofuels. The alternative in fact, rather than looking at small percentage additives, is to synthesise entirely compatible conventional hydrocarbon fuels which is an alternative approach. You then not only get a much cleaner fuel, but you are also getting material which is totally compatible with the existing infrastructure and with the existing gas and diesel markets.

  Q209  Patrick Hall: How does one do that? What are the raw materials for that?

  Professor Bridgwater: You can take any biomass and you convert it into what is called synthesis gas, a mixture of hydrogen and carbon monoxide, and then this is turned into liquid fuels as in the Sasol plant in South Africa for example.

  Q210  Patrick Hall: So trying to go back to your summary in your evidence where you say that electricity production is more compatible with tackling climate change effectively than biofuel production, one has to ask whether you are saying logically that the Renewable Transport Fuels Obligation is worthless and that we should not be producing biofuels in the transport sense in this country?

  Professor Bridgwater: It satisfied the short-term requirement to get the industry to accept different fuels and have them accepted by the users in the marketplace. In the longer term, if you are looking at achieving more than a 5% substitution, then there are potential problems with the vehicle manufacturers as to how they can accommodate that. So it is more of a short- to medium-term solution than a long-term solution because of the limitations and the extent of the blending.

  Q211  Patrick Hall: But you are saying that any percentage presumably is not as effective a way of reducing carbon emissions as electricity production? So any use in transport is not as effective. If we are looking at this from a global point of view, we should not be going down this road. Is that a conclusion that I can draw from your evidence?

  Professor Bridgwater: I do not believe that is a valid conclusion. The opportunity to produce transport fuels addresses the environmental issues and also addresses the security of supply issues. Biomass is unique in that it is the only way of fixing carbon which we need for many commodities like conventional transport fuels and many chemicals. There are no other ways of producing that carbon resource in a renewable way. Therefore the optimum use of biomass needs to utilise that fixation of carbon from the atmosphere into a useful valuable resource. It is a question of economics, the commercial economics of what is the most attractive way of using the resources that we have.

  Q212  Patrick Hall: I can see that Dr Woods wants to come in here and possibly Dr Rowe.

  Dr Woods: There is an interesting perspective on this which is that it is too early yet to talk about the optimum allocation of land for biomass for energy. We have a short term, perhaps the next 10 or 15 years, where we have to address the transport sector and clearly biofuels are the only game in town at the moment for doing that. If you take that decision or that logical pathway, then you have to ask what the best biofuels option is for that. It is obvious that biofuels can be done very well or very badly and very badly means worse than conventional gasoline and very well means some very substantial gains. You can get well below 100 grams of CO2 per kilometre if you are talking about higher blends. Again you have to talk about the whole chain and the whole system within that perspective. To come back to the fundamental of your question, it is really too early to start picking between the sectors and to say, yes, we should in effect abandon one of the sectors in preference for the other. There is a lot of innovation to play in this area.

  Patrick Hall: That is nonetheless a conclusion you have come to in your evidence to us and if that is your best assessment now, surely it is absolutely relevant to pursue this line of questioning at this stage. If we are going down the wrong road, if that is your conclusion at this stage, that this country should not go down that road and instead should go down another one, then this is the time to say it and to say it loud and clear.

  Lynne Jones: We have been told by the NFU that we can meet the Renewable Fuels Obligation for transport with all the spare land that there is, with the exported wheat and with the set-aside land, but why should we be allow the fuel obligations to dominate the biomass, the biofuels sector, given your conclusion?

  Q213  Chairman: In paragraph 19 of your evidence, you draw our attention to the fact that "Electricity or heat from short rotation coppice provides between three and six times the CO2 reduction per pound that can be obtained from rape methyl ester . . . or bioethanol from cereal crops". In paragraph four, you indicate the land area which could meet the road transport fuels requirement, bearing in mind there is a finite amount of land which appears to be available for growing these crops. What my colleagues are trying to explore with you is where the investment should go at this stage because you, in your opening remarks, talked about the need for certainty and longevity of decision making. Do you spread your investment pounds very thinly on all kinds of runners and riders in the bio race or do you concentrate it where you are going to get the best bang for the buck in terms of CO2 saving? That is what we are trying to get your guidance on.

  Dr Rowe: The main point we are trying to make is that you have two options basically for making biofuels, if you wish to go down the biofuel line. We have already made agreements with the EU that we are going to do the 5%, which has advantages as well as it makes people aware of the fact that there is already an issue; it makes the public aware, so there is a public awareness factor to it as well which you must not rule out completely. The point is that rather than using cereal grain there is the option of using biomass products and that would mean Miscanthus or even the actual waste products from cereal production, through the straw, through a separate process to make bioethanol. That is actually possible and that process is being developed. I am not an expert on how good that process is currently, but the idea is that that process may be more efficient than using cereal grain. That is mainly the statement they were discussing in those paragraphs.

  Q214  Chairman: With respect, that does not quite answer the question that colleagues were posing. The colleagues were posing the question about where we get the best return. If we are going into biofuels in the widest sense of the definition of that, do we focus it on heat and use all the land to produce things we can burn or do we focus it on the production of liquid fuels or do we wait until there are more advanced technologies around the corner where we can fractionate a particular plant into food, into cellulose, into whatever? We are trying to get a feel as to where the investment should be.

  Dr Woods: I agree it sounds confused in the approach and I have to say I have come in late to the process so I have only just recently read the evidence that was submitted. There is a difference in issue here. There is an issue where you could come at this with the perspective that we have the UK land area and we have X amount of pounds to invest in that land area and we shall have a maximum perfectly efficient policy which is going to allocate that land to the least cost carbon abatement option. That is a false view. First of all, we do not have in essence perfect knowledge on the best bioenergy options available and secondly, you cannot cherry-pick the sectors in that sense. Then, if you step back from that and say perhaps government policy could leverage more investment in certain areas, it is very true that the biofuels sector offers the most opportunity for levering private sector investment. Secondly, does that mean that you should say right, then the electricity and heat sectors are not as relevant or important? That would be a false option to take at the moment as well. I am afraid that if you were looking for a kind of academic purity and clarity in that approach, you are not going to get it from us.

  Q215  Patrick Hall: Okay; it is just that your evidence does say that electricity production is the most effective way of reducing carbon emissions. May I then accept that you accept the Renewable Transport Fuels Obligation and the target of 5% by 2010, leaving aside what we have just tried to explore? Would you accept the logic that once we have that target, and let us assume we reach it, that there will be pressure to say that we have produced this much, now we go on to produce more? Then, if we look at your first paragraph in your evidence, in the executive summary, you say "UK capacity to produce biofuels . . . is limited to 5-10% of the total road transport fuel requirement without changes in the production of food crops but with use of exports and set-aside land". If we do go beyond the 5% and perhaps indeed beyond the 10%, what do you think at this stage the effects would be on UK food production, on biomass crops for heat, for electricity and indeed land use? Just a broad view of that position, because you are looking at these matters right now, because it is in your evidence.

  Professor Bridgwater: I want firstly to confirm what Jeremy has just been saying about the wrongness of picking winners now. There is still a lot of development to be undertaken, particularly on the liquid biofuels, developments concerned with performance, selectivity and costs and it would be unwise to abandon one area and pick another area.

  Q216  Patrick Hall: Excuse me, but I do not know who is talking about abandoning one area in favour of another at this stage. If there are any implications that lead to that, they come from your evidence. I should like to move on from that to the question that I just posed rather than the previous question. So would you address the question I have just posed? If we do go beyond the 5% and possibly the 10%, what would be the knock-on effects on UK food production and land use?

  Professor Bridgwater: I am afraid I am not an expert in land use or food production. I do not know whether either of you are able to comment on that.

  Dr Woods: It is very clear that if you wanted to produce more than the 10% of current land transport use, you would need substantial amounts of land, especially given current technologies. It would impact on land use; there is no doubt about it. Then the detail of that is, if you want to expand biodiesel production substantially and it is all done through rape seed, how that fits within the rotational cycles. I would bow to the NFU knowledge on that sector, but it is true that it will impact on food production in that sense. A more interesting question is: given the UK's approach in terms of fuel security rather than food self-sufficiency, does it really matter? You could take it to its extreme and say right, well let us produce very large proportions of our transport fuels or our electricity and heat from bioenergy and not produce any food and the knock-on effect of that would be that we would buy it all from abroad and then the question is what impact that would have on world food prices and that is a very complicated question. It is one that we are seeing being played out at the moment in terms of the Brazilian sugar and ethanol interchange. The reason that the sugar price is at an all-time high and the reason that the ethanol price is at an all-time high is because the Brazilians are now the producers of both and not able to produce enough of both to keep the prices as they were before, plus the impact of the sugar reform that is going on at the moment. There are some very complex economic interactions which are likely to emerge and I cannot say that I can predict what the outcomes are going to be.

  Q217  Patrick Hall: No, but we are embarked upon a process and a direction and we need to question the possible implications and outcomes of that in the future. Of course the imperative is to tackle climate change and I am now not so sure whether the direction that we are embarked upon is the most effective in order to reduce carbon production in this country. I shall leave it at that.

  Dr Woods: That is a shame.

  Patrick Hall: I was not trying to stop a reply, I was just saying I had finished.

  Q218  Chairman: Say what you want Dr Woods. We do not cut off good answers.

  Dr Woods: I was asking why you had reached that conclusion. You seemed to be implying that the biofuel option was not a method for addressing climate change options in the UK as a result of what you have heard from us.

  Q219  Patrick Hall: Because you say that carbon savings would be greater in electricity production than in biofuels. Because the evidence says that, I am coming back to that because it is an important statement which you have made which may suggest that we should, as a country, be thinking very carefully about the Renewable Transport Fuels Obligation.

  Dr Woods: But you have to have a view of this over time periods and the scales of the markets. If you are talking about a ten-year period from now, so talking about a 2015 target, then you can say that yes, having a five to 10% inclusion of biofuels, if it is done well, and that is the point I was trying to make, if the target is CO2 reduction and policy incentivises CO2 reduction so the best biofuels are produced, then they will have a substantial impact, even at 10%, on greenhouse gas reduction targets. Equally, that will have used a certain proportion of the land and a certain amount of the biomass accruing on UK land area. That does not exclude, in that period, a substantial amount of biomass going to electricity, co-firing and to heat. That is the real point: at the moment we are not anywhere near the limits of the resources. We can know that in a period of time. What is really important is that policy sets out very clearly and incentivises carbon reduction, for example, and at the moment it does not do that: the RTFO does not do that, the ROCs do not do that and the signals are too short term in that sense.

  Chairman: We might come back to seek your advice as to what the signals should be, possibly in addition to what Professor Bridgwater was saying earlier about long-term signals.

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