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
Q203 Chairman: How would you see
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'".
This is presumably referring to electricity production. In terms
of tackling climate change, why should we be producing biofuels
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
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
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
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
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