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5 Jun 2008 : Column 342WH—continued

4.15 pm

The Parliamentary Under-Secretary of State for Transport (Jim Fitzpatrick): It is a pleasure, Mr. Amess, to see a fellow West Ham supporter in the Chair.

I welcome today’s debate on the report of the Environmental Audit Committee inquiry into the sustainability of biofuels. I congratulate the hon. Member for South Suffolk (Mr. Yeo) and his colleagues on the report and on securing this debate. If it was not clear before today that biofuels remain a controversial issue, it should be now. It is therefore right that the subject should be fully debated. It is particularly appropriate that today is world environment day; its theme this year is the low-carbon economy and the reduction of greenhouse gas emissions.

Since my last engagement with the Committee six months ago, there have been some important developments. The renewable transport fuel obligation is now operational, with 17 companies registered as obligated suppliers; and the Renewable Fuels Agency—the RFA—has been established as the administrator. This morning, I visited the agency’s headquarters in Hastings. As we heard earlier, Professor Gallagher, the RFA chairman, has been leading a review into evidence on the indirect effects of biofuels. The European Commission has published its climate change package, which includes a draft renewable energy directive.

In its original report, the Committee said that

That goes to the heart of the problem. We heard today that there are good biofuels that are sustainably produced and which help to save greenhouse gas emissions—for example, biodiesel made from waste cooking oil. We also know that there are potentially bad biofuels. For example, everyone agrees that biofuels would be bad if tropical rain forest had to be cleared to grow them. Those are commonly quoted examples, but most cases are not so extreme. It is not always easy to know which biofuels are good and which are bad.

A lot of work has been done, and is still going on, into how to assess the sustainability of biofuels and how to measure their life-cycle greenhouse gas emissions. It is worth reminding ourselves that the United Kingdom is a world leader in the field. Because of the potential of biofuels for greenhouse gas savings, the Government have encouraged them, at first through differential taxation and now through the RTFO. However, we have always recognised that, if given indiscriminately, support for biofuels could lead to unsustainable forms of production.

We have minimised the risk for the RTFO in two ways. We have taken a cautious approach to the level of the biofuels obligation, as articulated by the hon. Member for South Suffolk, the Committee Chairman, and others. We began with a modest target for 2008-09 of a 2.5 per cent. share by volume in total petrol and diesel sales. We
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also made it a condition that fuel suppliers can claim certificates only if they report on the sustainability characteristics and greenhouse gas savings of their biofuels.

The carbon and sustainability reports will be published in summary for each obligated supplier. That will be an important incentive for them to ensure that their biofuels come from sustainable sources. However, carbon and sustainability reporting is only a first step. We announced last year our aim that, from April 2010, rewards under the RTFO should be linked to the carbon savings of the fuels supplied, and that from April 2011 only biofuels meeting prescribed sustainability criteria would be eligible for certificates. Those provisions would be subject to compatibility with European legislation and WTO rules, as we heard from the hon. Member for Scarborough and Whitby (Mr. Goodwill).

The Government have meanwhile been urged to abandon the RTFO, or at least to put it on hold. In our view, that would be wrong. It would mean giving up worthwhile greenhouse gas savings, with no evidence of any benefit in return. It would also send the wrong signals to the industry, for which a consistent long-term policy is important. Indeed, for that very reason, the legislation establishing the RTFO has been designed so that it cannot be amended quickly. However, we have given a firm undertaking that we will not agree to any increase above existing targets until it can be shown that the necessary biofuels can be produced sustainably. The work to develop robust sustainability criteria at the EU level is therefore most important. With those in place, it will be possible to assess whether enough sustainable biofuels could be produced to meet the targets that have been proposed for the EU.

Two targets affect biofuels. First, the draft renewable energy directive sets a 10 per cent. target for the share of renewable energy in transport, which would almost entirely be from biofuels by 2020. Secondly and separately, the European Commission has proposed an amendment to the fuel quality directive to set a greenhouse gas reduction target for petrol and diesel. That would require a 10 per cent. saving in life-cycle carbon emissions by 2020. Although part of the latter target could be met through the more carbon-efficient production of fossil fuels, it is broadly agreed that the majority of the savings would need to come from biofuels, which could amount to as much as 8 per cent. The amount of biofuels needed would depend on their life-cycle carbon emissions: if they were half those of the equivalent fossil fuels, a 16 per cent. biofuels share would be needed to achieve an 8 per cent. greenhouse gas saving. That is a much greater amount than would be required by the 10 per cent. renewable energy target.

We do not know whether that could be achieved sustainably. We will press for a more realistic but still challenging greenhouse gas reduction target for petrol and diesel. Different sustainability criteria have been proposed for the two directives. A special working group has been set up under the Committee of Permanent Representatives to prepare core sustainability criteria that will apply to both. The hon. Member for Scarborough and Whitby said that directives are difficult to change: in this case, they will have to be changed because they are in conflict with each other. The United Kingdom
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has been playing a full and active part in the negotiations, which should reassure my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley).

Recent studies have suggested that the indirect effects of biofuels might be more significant than had been assumed. In the light of uncertainties about those results the Government asked the chairman of the RFA, Professor Ed Gallagher, to undertake a review of the evidence. I am grateful to him and his team for the work that they have put into the review, and to a wide range of stakeholders for their contributions. The time scale for the review has been tight, because the findings need to be fed into the EU negotiations on biofuels sustainability criteria. Our negotiating position will take the findings fully into account. We expect that they will also be of significant interest to other member states and that they may in some cases affect their positions on the negotiations.

Nevertheless, the review team have done a great deal in the time available. Evidence has been collected in the United States and Brazil, which are two of the most important countries for the production of biofuels. There has been a meeting with experts in the Netherlands which, like the UK, is a leading country for work on biofuels sustainability. On Monday, members of the review team will travel to Rome for a meeting at the UN Food and Agriculture Organisation. The meeting will pay particular attention to the impact of biofuels on food security, especially in the light of the high-level conference on food security which has just taken place at the FAO.

Joan Walley: I am glad that the Minister referred to the Gallagher report—it will obviously inform UK policy. Will he share with the House the conclusions of the draft report, which I believe are available? Will he place them in the Library?

Jim Fitzpatrick: I was about to offer an assurance on the publication of the report. It is not available, but I understand that some interim findings have been shared with some organisations. As my hon. Friend the Member for Stockton, South (Ms Taylor) said, peer review of such reports is of fundamental importance, and that is what is happening at the moment. I will give my hon. Friend the Member for Stoke-on-Trent, North details on publication, which will be at the end of this month—we will not place anything in which we do not have total confidence in the public domain. We are not in such a position at the moment. I shall give a definitive response to the questions she put in her contribution later.

Biofuels stakeholders have been fully involved in seminars and workshops in the UK. Professor Gallagher’s report has been drafted and is going through a process of peer review by Government chief scientists. The final report is due to be presented to the Secretaries of State for Transport and for Environment, Food and Rural Affairs at the end of the month. My hon. Friend the Member for Stoke-on-Trent, North made that point in her contribution, as we discussed. As I said, I expect the interim report to be with Ministers soon, and the final report with recommendations on how to move forward, especially in Europe, by the end of June. The report will be independently peer-reviewed before publication. To answer her question, I expect that the European Energy Council will debate the issue but I do not expect the independently peer-reviewed report to be made available before the end of June. It will therefore not flavour those discussions.

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The emerging evidence indicates that the issues surrounding biofuels are very complex and that there are still many uncertainties about measuring the benefits. That confirms that we have been right to be cautious in setting biofuels targets. The policy of caution will continue—many hon. Members, including some of my hon. Friends, made that point. The Gallagher review is not the end of the process. The review of biofuels will go on as we continue to collect evidence and develop a clearer understanding of their impact. If the evidence indicates that a target cannot be met solely through sustainably produced biofuels, it would need to be modified.

The hon. Member for South Suffolk made the point that 10 to 40 per cent. of UK arable land would be needed to meet the 5 per cent. UK target. I must tell him that we expect the target to be met through a mixture of imported and home-grown feed stocks. However, in theory—studies including one from the National Farmers Union suggested this—a 5 per cent. target could comfortably be delivered by UK-grown biofuels without any significant change to UK farming practices. We export large quantities of wheat that could be used to produce bioethanol and contribute significantly towards the 5 per cent. target. The Gallagher review is considering the pressures and availability of land in relation to the production of biofuels.

My hon. Friend the Member for Stockton, South made a powerful speech and reinforced the importance of peer review of reports and the complexity of the issue. Her concerns arise from the information with which she has been provided from various sources. I welcome her support for biofuels that are produced on a sustainable footing and I understand their importance to industries in her constituency and surrounding areas, and the jobs that they support for people in the north-east.

The hon. Member for East Dunbartonshire (Jo Swinson) called on the Government to keep moving on the issue. I hope that I have demonstrated, if not completely to her satisfaction, that we are doing so. Three years ago, the Government were attacked for not moving fast enough on biofuels, and now we are being criticised for not calling a halt—my hon. Friend the Member for Stroud (Mr. Drew) made that point eloquently, relating it to his experiences.

I hope that my contribution has covered the points made by the hon. Member for Cheadle (Mark Hunter). In the end, his position is not a million miles from the Government’s.

The hon. Member for Scarborough and Whitby always speaks with great authority from personal experience—he did so today, even if he chose to quote from The Guardian. That was a bit suspect, but he retrieved his position by quoting from the Prime Minister, who is a much more reliable source. I shall pass on the hon. Gentleman’s regards.

Biofuels should not be considered in isolation—everyone who spoke in the debate made the point that they do not constitute a silver bullet. Their significance is mainly their contribution to greenhouse gas savings, and we aim to encourage them accordingly. If because of sustainability or other problems that contribution turns out to be lower than current targets imply, equivalent reductions might need to be found elsewhere.

Biofuels are not an end in themselves, but with the right sustainability standards in place, they have a role as one of many measures with which we are combating
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climate change. I congratulate the hon. Member for South Suffolk and the Committee on the report. It will play a role in the development of our policies in future but, as is obvious from my remarks and the Government response, we are not supportive of its final conclusion.

4.29 pm

Mr. Yeo: Belatedly, Mr. Amess, I wish to say how delighted I am to serve under your chairmanship, as you and I entered the House almost 25 years ago on the same day.

This has been a useful debate. I am grateful to all hon. Members who have expressed their opinions about the Committee’s report and congratulated the Committee on producing it. I am glad that a variety of opinions have been voiced; it makes for a proper debate. I am particularly grateful for the support of my colleagues from the Committee, two of whom are still here. I was a little disappointed by the rather ambivalent attitude of Liberal Democrat Front Benchers, who were less than wholehearted in their commitment to the report’s conclusions, but many years of experience have taught me not to be too surprised by that.

I welcome warmly the official Opposition’s support for the report’s conclusions, and I thank the Minister in particular for his response. He may recall that in a previous incarnation, he very courteously received a deputation of constituents of mine who wished to save an extremely small village post office. I am glad to tell him that, whether it was with his help and intervention or not, that post office has survived the chop. If he does nothing else for South Suffolk, he has achieved something for the village of Stoke-by-Nayland, through which I drive every week of my life.

I thank the Minister for explaining the position in relation to the Gallagher review. It is useful to have that information, and we look forward to seeing the review’s conclusions shortly. I am glad that they will be available before the summer recess. They will no doubt feed further discussion and debate. He confirmed that the UK target is likely to be met through contributions from imports. Of course, the lack of sustainability in some methods of production of imports was a matter with which the Committee was particularly concerned. We recognise that at home, the issues are rather better understood. The risk of environmental damage and of a negative impact on greenhouse gas emissions arises almost entirely from what may happen—indeed, we think that it is happening—in some developing countries. That will remain a concern.

The Minister teased the hon. Member for East Dunbartonshire (Jo Swinson) slightly about the fact that the Government were attacked some years ago for going too slowly and are now being attacked for going too fast, but I think that she said—I agree with this—that when the facts change, it is right to change the policy. We know a lot more than we did three years ago, and the state of knowledge is advancing all the time. That is why the need for an immediate change in Government policy, as called for by the Committee, is still justified. I emphasise that the Committee reached its conclusions on the basis of the evidence that it studied, and we will continue to do so. It was a balanced conclusion. We recognise and welcome the fact that biofuels could contribute significantly and positively towards cutting
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greenhouse gas emissions from transport. Our concerns involve the first generation and the issues that I mentioned.

I shall not detain you from your well-deserved weekend any longer, Mr. Amess. I am grateful to you for your chairmanship and to all who have taken part in this
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debate. I am sure that the issues will continue to feature prominently in discussions about the nation’s and Europe’s response to climate change.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes to Five o’clock.

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