Climate Change Bill [Lords]

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Mr. Woolas: I congratulate the hon. Gentleman on his argument and research. I admonish myself for not reading out the advice at the beginning of my speech, which covers the point. I was handed the paper before lunch—or dinner, as we say in Lancashire.
The hon. Gentleman has a point. The United Kingdom cannot set mandatory standards unilaterally. They need to be agreed at EU level. We have already set a reporting mechanism within the law. What we are trying to do is to set out the requirements to the providers to report on the criteria, as our building block towards the European Union policy. That is as far as we can go before the EU adopts the policy.
The hon. Gentleman may be right, but I would ask him to consider the point that, in the circumstances to which he referred, we would be in the right position by following my argument, because we have established the reporting mechanism. We can slow down the RTFO levels through United Kingdom secondary legislation. My right hon. Friend the Secretary of State for Transport announced a consultation on that point. We are following the route suggested by the hon. Member for Cheltenham.
Let me use another argument, that of the third party, which is from the noble Lord Teverson, the Liberal Democrat in the House of Lords. A similar amendment was tabled, fairly, by the Lib Dems in the other place. In response to my noble Friend, Lord Rooker, Lord Teverson said:
“My Lords, I thank the Minister for his extensive reply”—
mine has clearly not been as extensive—
“which I have to admit was very persuasive.”
He went on:
“I am fully persuaded. The irony, as the Minister well knows, is that the whole biofuel debate moves at a faster rate than political dialogue.”—[Official Report, House of Lords; 18 March 2008; Vol. 700, c. 239.]
The noble Lord Teverson was persuaded by the argument that I have put. I hope that the hon. Member for Cheltenham is, as well.
Mr. Gummer: I am entirely persuaded by the Minister’s argument, but does he not have to put forward a further argument? In the discussions in the European Union, we are faced by those who want to advantage some internal production of biofuels, for reasons nothing to do with sustainable development, climate change or anything else. It is important for him to be able to show clearly that he has been entirely within the law in his position. He will need to argue with those who want to produce biofuels from rape oil in France and from soya beans in Germany for entirely agricultural and electoral reasons—nothing to do with the real issues of climate change. He must show that he has treated the issue with great seriousness, because he might have some pretty tough discussions to get the final results that he and we want.
Mr. Woolas: I am grateful to the right hon. Gentleman for providing another bullet in the chamber, if I may put it that way. He is right. He raises a practical point. Let me try to amplify it for the hon. Member for Cheltenham, in an attempt to convince him of the force of my argument.
By signing up to European Union law, the UK is not able to implement unilaterally our own mandatory carbon and sustainability standards while the draft directive that I mentioned is being negotiated. That is because of the overlapping subject matter. The requirement proposed in amendment No. 1, tabled by the hon. Member for Cheltenham, and changes to the RTFO order to implement that, would have to be notified to the Commission under the technical standards directive and would be subject to a stand-still period.
The stand-still period is expected to be 12 months, as set down in the technical directive. It would, incidentally, be extended to 18 months, if during the 12 months the Council adopted a common position on the draft directive. Therefore, if unilateral UK action was proposed, by the time the applicable standstill period finished, the renewable energy directive would very likely—I would say almost certainly—have been adopted and its provisions would supersede the proposed UK legislation. That is a new point for the hon. Member for Cheltenham to consider.
4.30 pm
I am pleading with the hon. Gentleman. Although the Government agree with his policy, we think that schedule 6 is the best way to get to it. Schedule 6 beefs up the instruction to the administrator. The danger—if that is not too strong a word—with the hon. Gentleman’s amendment and the amendment in the other place is that they could pull the rug from under us, although we agree with their policy. I rest my case, as it were.
Martin Horwood: I am pleased by the degree of consensus in the Committee today and I am particularly pleased by the congratulations from the right hon. Member for Suffolk, Coastal, whose expertise on these issues and record on environmental issues generally are to be respected. I therefore forgive him for his earlier party political pot shots, in this new spirit of cross-party co-operation.
As the right hon. Member for Penrith and The Border rightly said, we have all been on a bit of a journey on the subject of biofuels. I think that it was the Secretary of State for Transport yesterday who slightly unkindly quoted the right hon. Member for Witney (Mr. Cameron), who only a couple of years ago made the definitive statement:
“Five per cent. of all fuels sold in the UK to come from biofuels is a start, but it is a minimum step: we will need to go further in the future.”
Like the right hon. Member for Witney, we have modified our position.
Gregory Barker (Bexhill and Battle) (Con): What my right hon. Friend the Member for Witney (Mr. Cameron) said is entirely possible. If one talks to scientists about the developments in biofuels, such that science and technology are employed to use the whole plant, it is entirely possible, and certainly conceivable, that we could be that ambitious, but not if biofuels are grown unsustainably. My right hon. Friend would always insist that they are grown sustainably, so I am afraid that it is a canard.
Martin Horwood: I am not sure that I remember the right hon. Member for Witney saying that to the Renewable Energy Association. However, we are on common ground in the belief that much more robust sustainability criteria are needed. Nevertheless, it is important not to throw out the biofuels baby with the bathwater.
The right hon. Member for Suffolk, Coastal and others were a little unkind to members of the green movement and some of the non-governmental organisations that have been lobbying us, implying that they have simply switched position. Those of us who regard ourselves as members of the green movement have been accused on various occasions of holding an almost religious fervour about some causes, such as nuclear power and genetically modified foods, and of never being prepared to change our position. Well, this is a very obvious standing rebuttal of that accusation, because on this issue the consensus in the green movement has shifted. Therefore, the right hon. Gentleman’s accusation was a rather simplistic one.
4.33 pm
Sitting suspended for a Division in the House.
4.49 pm
On resuming—
The Chairman: Order. Before I call the hon. Member for Cheltenham, may I say to the Committee that the business on the Floor of the House is likely to run without a vote until just before 6.50 pm? After that, when the Bill starts on its Committee of the whole House stage, there will be a series of Divisions. Members of the Committee may think it more convenient to make some progress before that time, because otherwise the latter stage of this Committee will be disrupted.
Martin Horwood: I was just extolling the virtues of cross-party co-operation and of the green movement generally. I shall move on to the specifics of the amendment.
As the Minister said, there is some common ground, and he was good enough to welcome the essence of the policy in our amendment. He was right to say that the status of the RTFO itself is not at issue. Interestingly, he said that what we seek to do is to give instructions to the administrator to ensure the sustainability of the fuels involved. The amendment proposes to use the word “ensure” instead of the current word “promote”, making the instruction in law to the administrator much stronger and more powerful.
In that sense, I am completely with the Minister. He suggests that amendment No. 1 introduces that requirement without sufficiently clearly defining it. He said that that might introduce uncertainty over the validity of certificates and that the criteria should be EU-wide. That is true and we agree with that, and we agree with sufficiently robust criteria being adopted at European level, as we have said. There is no shortage of definitions of sustainability around biofuels.
The Swiss Government already have a working scheme in which they have clearly defined measures of sustainability. The Environmental Audit Committee studied that scheme when we examined the issue. The Gallagher report also goes some way towards defining it. Professor Gallagher made the statement that it should be possible
“to establish a genuinely sustainable industry provided that robust, comprehensive and mandatory sustainability standards are developed and implemented.”
Professor Gallagher thinks that that is eminently possible, and goes on to make specific recommendations including
“the replacement of volume or energy based targets with comparable greenhouse gas saving targets as soon as practicable”.
There is a degree of consensus already available.
We then came on to the rather more technical and legal point. It is right to raise the point that the noble Lord Rooker raised in another place: that, in effect, there would have to be a 12-month standstill period for this regulation, and that it might in the end contradict EU trade rules. If all those scenarios came to pass and the renewable energy directive was adopted on time, the amendment might be ineffective because it would have to wait for the EU rules to be adopted and then it would be superseded.
Question put, That the amendment be made:—
The Committee divided: Ayes 2, Noes 11.
Division No. 11]
Horwood, Martin
Webb, Steve
Banks, Gordon
Brown, Mr. Russell
Buck, Ms Karen
Chaytor, Mr. David
Griffith, Nia
McDonagh, Siobhain
Ruddock, Joan
Snelgrove, Anne
Walley, Joan
Whitehead, Dr. Alan
Woolas, Mr. Phil
Question accordingly negatived.
Schedule 6 agreed to.
Clauses 75 to 77 ordered to stand part of the Bill.

Clause 78

Power of Ministers and departments to offset greenhouse gas emissions
Mr. Woolas: I beg to move amendment No. 27, in clause 78, page 36, line 43, after ‘acquire’, insert
‘and dispose of units or interests in’.
The Chairman: With this it will be convenient to discuss Government amendment No. 28
Mr. Woolas: Having failed to persuade the hon. Member for Cheltenham of the force of my argument, I will attempt to redeem myself by seeking consensus on amendments Nos. 27 and 28. These are minor, technical amendments. Clause 78 allows the Government and the devolved Administrations to purchase carbon units which, at the moment, is not allowed. Those could be used to help meet the targets in the Bill or to offset emissions from the central Government office estate.
I will explain the underlying legal position. The purpose of the clause is not to give Ministers and Departments the power to buy and dispose of carbon units—they can already do that under general law in the same way that I and other hon. Members have the inherent power to buy and sell things. We do not need an Act of Parliament to give us that power. However, if this Bill becomes an Act, the purchase of units could become a source of significant and ongoing expenditure. By convention, parliamentary approval through such a clause is needed to authorise such expenditure. The position is slightly different for the Welsh Ministers who, unlike other Ministers, have only those powers conferred upon them by statute and the clause is necessary for that reason.
Amendment No. 27 broadens that power and allows for the acquisition and disposal of carbon units and interests in carbon units. Interests in carbon units includes the ability to enter into futures contracts to acquire units at a later date based on a fixed price at the date of the agreement. It also provides the power to dispose of carbon units or interests in them, and will ensure that the UK and devolved Ministers have the power to buy and sell carbon units or contracts relating to them. That power exists anyway and this is not a debate about first principle. However, given that the power to acquire them is expressly mentioned, it made sense to put the point beyond any doubt.
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