Select Committee on Environmental Audit Minutes of Evidence


Memorandum submitted by the Environment Agency

SUMMARY

  Whilst recognising the importance of developing more sustainable transport fuels, the Environment Agency is concerned that ambitious biofuel use targets have been established at European Union level in advance of a proper understanding of the implications in terms of carbon emissions, sustainable development and land-use. Specifically, our submission highlights that:

    —  There is a risk of significant environmental impacts from biofuel production in the UK related to competition for land use, water use, water quality, and waste management. In addition, there will be negative impacts on biodiversity and deforestation associated with the import of tropical biofuels such as palm oil. There is a real danger that with biofuels, trying to solve one environmental problem (ie climate change) will create new ones.

    —  Greenhouse gas (GHG) emission reductions from biofuels are not guaranteed, as some fuels have high life cycle ("well to wheel") emissions. There needs to be a minimum threshold of carbon saving for fuels to qualify for measures such as the Renewable Transport Fuels Obligation (RTFO), as well as robust sustainability standards.

    —  The emphasis in the UK and at EU level on biofuels, as opposed to other bioenergy options, needs to be questioned. Biofuels are the most land-intensive and least cost-effective carbon mitigation alternatives. More policy measures are needed to promote options at the top of the Government's biomass hierarchy (eg biomass heating).

    —  The government also needs to give more priority to other policy measures for the transport sector, in particular a substantial tightening of fuel efficiency standards and measures to promote modal switch (eg road pricing).

  Notwithstanding these concerns, the Environment Agency believes that there is a role for a continued careful development of transport biofuels, especially in view of prospects for improvements in technology and the emergence of newer advanced biofuels which promise significantly higher carbon savings.

1.0  INTRODUCTION

  The Environment Agency welcomes the opportunity to submit evidence to the Environmental Audit Committee's inquiry into the sustainability of biofuels.

  Our role in biofuels includes the regulation of waste, pollution prevention permitting for large biofuel plants, and as a statutory consultee in the planning system. We have a range of statutory responsibilities for protecting resources (soil, air and water), and limiting and adapting to climate change in England and Wales.

  There is much interest in the use of biofuels to replace fossil fuels, driven by a number of concerns, such as climate change, benefits to the rural economy and energy security. However, increasingly questions are being asked about the environmental and broader sustainability impacts that a large and sustained expansion in biofuel production might have, both in the UK and in the developing world.

  The Environment Agency believes that biofuels can play a role in reducing transport's greenhouse gases (GHGs) but we are sceptical that they represent a good environmental or economic deal, unless there are major advances with production from so-called second generation biofuels.

  We focus our comments on the environmental impacts of biofuels (question 1) but also provide some answers to questions 2, 4, 6 and 7.

2.0  KEY INQUIRY QUESTIONS

Question 1 (i):  What are the possible positive and negative social, environmental and economic consequences of biofuels?

  The environmental issues surrounding biofuels are wide-ranging. They include:

    —  A large variation in GHG emissions according to feedstock and process.

    —  Large-scale changes to land use for energy crops.

    —  Effects on water resources, soils and biodiversity.

    —  The handling and reuse of wastes as fuel.

    —  Emissions from some combustion processes.

  We explore some key issues in more detail below.

a)  GHG emissions

  From an environmental point of view, the major promise of biofuels is a reduction in GHG emissions. Road transport accounts for 21.6% of UK CO2 emissions, with an increase of about 10% since 1990. The biggest increase has come from heavy goods vehicles (+30%). Transport emissions are still on an upward trend which is one of the reasons why the UK is unlikely to achieve its domestic emissions target of a 20% CO2 reduction by 2010[1]. Measures to reduce transport emissions are thus of crucial importance for the achievement of the UK's climate change targets.

  However, GHG emission reductions from biofuels are not guaranteed, as the carbon footprint of different biofuels varies enormously (see graph 1). While some reduce emissions by up to 100% (eg recycled vegetable oil), others (eg palm oil grown on plantations where virgin rainforest has been cut and peat swamps drained, US maize grown very intensively) actually result in emissions increases over regular fuels. Even for the same feedstock (eg wheat), GHG emissions savings can vary from 20 to 80%, depending on the manufacturing process used for refining the fuel and on the use of by-products[2].

Graph 1

BIOFUEL GHG EMISSIONS


  Source:  Joint Research Centre, Well to Wheels Report, Version 2c, March 07 http://ies.jrc.cec.eu.int/wtw.html

  Higher CO2 emission reductions per hectare can be achieved by restoring cropland to forest. For example, converting cropland back to tropical forest can sequester 20-30 tonnes CO2/hectare per year, three to four-fold higher than the emissions avoided by using bioethanol from a hectare of sugar cane[3]. In the future, some of these secondary forests could be used for producing second-generation (lignocellulosic) biofuels.

  To ensure biofuels deliver real GHG emission reductions, a minimum threshold of carbon saving (at least 50%) needs to be introduced for measures such as the RTFO. The Agency also supports a banding of the RTFO, with a larger number of certificates on offer for higher carbon savings (eg 3 certificates for 90% carbon savings).

b)  Biodiversity

  In terms of UK-grown fuels, concerns about biodiversity relate mainly to the use of set-aside land. According to the RSPB, the loss of set-aside to bioenergy crops is the most immediate threat posed to biodiversity in Europe. It is likely further to exacerbate the major bird population declines experienced in recent decades[4].

  With set-aside being phased out anyway in 2008, the issue is not necessarily biofuel specific. An effective agri-environment scheme that affords support for the most biodiverse sites currently under set-aside is thus important. However, higher commodity values will decrease the value of agri-environment payments that offset environmental degradation. Biofuel policies are thus putting environmental objectives under great pressure.

  As concerns imported biofuels, attention has focused on deforestation for palm oil plantations. Most palm oil is used in the food industry but as the oil is considered the most productive source of biodiesel[5], demand for biofuels is causing more deforestation in highly biodiverse areas of Malaysia and Indonesia. 20% of the EU's biofuels market is expected to be supplied from these two countries[6]. The problem is not only direct palm oil use as a biofuel. EU palm oil imports doubled during the 2000-06 period, mostly to substitute for rapeseed oil diverted from food to fuel uses[7].

c)  Water resources and soil impacts

  The production of biofuels can also impact on water use and water quality. Increased commodity prices will allow irrigation to be cost effective, and a large expansion in maize or sugar beet will stretch water resources in a large part of the UK that is already identified as water stressed. Bringing new land into arable production will put pressure on Water Framework Directive objectives. It will increase nitrate leaching and there is evidence to suggest water companies are already having to treat drinking water for oilseed rape herbicides such as carbetamide.

  An increase in the land use for late harvested crops such as maize and sugar beet for biofuels will inevitably result in more soil compaction, especially in wetter autumns and will increase water run-off and potential flooding in sensitive catchments.

Question 1 (ii):  How might trade-offs between climate benefits and environmental and social impacts be made?

  Trade-offs are never easy to make but can be achieved through effective carbon, environment and sustainability standards. Under such standards, a number of different criteria will be assessed and an overall rating given. Such standards could also include definite "no-go" options, eg fuel from plantations which have resulted in the destruction of highly biodiverse forests.

Question 2 (i):  Should biofuels be regulated to minimise the negative environmental and social impacts, and in what way?

  Regulation is crucial to ensure the environmental concerns raised above are addressed. If the choice of biofuel is simply left to the market, price considerations will determine choice, potentially at the expense of sustainability. In the case of support measures such as the RTFO, permissible biofuels should be required to meet certain carbon and sustainability standards. The standards should cover key criteria including: carbon in soil and above ground, biodiversity, water use, water quality, waste management, soil fertility, and good agricultural practice.

  The Environment Agency supports the work on standards for the RTFO currently underway. Ideally, standards should be developed at international level, with one set of standards applying globally. However, in the short term, this is probably not feasible, with UK/EU standards more likely. It is important that the Government works with the EU to resolve real or perceived WTO constraints to the application of carbon and sustainability standards.

Question 4 (iii):  Are current policies promoting the development and deployment of a range of biofuel technologies?

  Policies in the UK and the EU appear to give undue attention to transport biofuels compared to other bioenergy options. According to the Government's biomass hierarchy[8], transport biofuels offer the least cost-effective approach for reducing carbon from biomass. For example, CO2 abatement cost from biodiesel (£137/tCO2) and bioethanol (£152/tCO2 for wheat) are up to twice those for biomass for heat (£76/tCO2 for a large industrial boiler).

    The biomas hierarchy—in order of cost effectiveness (£/tonne C):

    —  Biomass heating.

    —  Biomas combined heat and power (CHP).

    —  Co-fired electricity in large fossil fuel plants.

    —  Dedicated biomas power plant.

    —  Transport fuels.

  Additionally, biofuels (especially those based on wheat and oil seed rape) have the highest land requirements per tonne of CO2 avoided. Perennial biomass energy crops such as short-rotation coppice are also generally more beneficial from a biodiversity point of view compared to annual biofuel crops such as oil seed rape. Furthermore, they require few inputs once planted, hence they generate little pollution (eg nitrogen run-off) compared to biofuel crops and can act as a nutrient sink[9]. Within the next decade or so, it is expected that biomass crops will be turned into so-called "second generation" transport biofuels at a relatively low cost (£30-50/tCO2[10]), but currently the technologies are still at the development stage.

  Concern about the focus on biofuels has recently also been raised by Jacques Diouf, the Director General of the Food and Agriculture Organisation of the United Nations (FAO)[11]. In his view, more attention needs to be given to providing electricity to the two billion people who have no access to modern energy services. Biomass could make a direct contribution to poverty reduction whereas the benefits of biofuels are less clear.

  The Environment Agency believes that there is a compelling case to use biomass at the higher end of the biomass hierarchy (for heating) and not the lower end (for transport). Furthermore, there is a range of options for reducing transport sector emissions and more emphasis should be put on other measures, such as mandatory fuel efficiency standards, road pricing and speed control measures.

Question 5 (i):  What proportion of UK domestic transport and energy generation could be fuelled by UK-produced biofuels?

  Land is a limited resource and biofuel crops are land intensive. According to NFU figures, the RTFO target of 5% biofuel could be achieved through growing biofuel crops (mainly wheat and oil seed rape) on land currently in set-aside and by turning wheat currently exported into bioethanol. Overall, this would amount to 16% of the UK arable land (almost one million ha)[12].

  Even if all of the UK's arable land was used for growing biofuel crops, at best only about 30% of current transport fuel requirements could be met. Even assuming that these crops would also produce substantial amounts of animal feed as a by-product, it is unlikely that using all our arable land for fuel production is desirable from a food security point of view. Other estimates suggest even higher land requirements.

  In the Environment Agency's view, the UK could only meet a substantial amount of its energy requirements from biofuels by first investing in a major energy and fuel efficiency drive to reduce overall demand.

Question 5 (iii):  Is there a role for public procurement?

  Public procurement's role should focus on demonstrating that biofuels can meet high carbon and sustainability standards. The Environment Agency is currently running its own biodiesel trial, using recycled vegetable oil. The trial runs from April 2007 for two years and involves 100 Agency vehicles. We will independently evaluate the GHG savings.

Questions 6 (iii) & 7 (ii):  What impacts might the expansion of biofuels have on international food security and prices? What implications are there for poverty in developing countries?

  The increasing demand for biofuels is already having an impact on global food prices. According to the latest OECD/FAO Agricultural Outlook, the growing use of cereals, sugar, oilseed and vegetable oils (mainly in the EU and US) to produce fossil fuel substitutes are underpinning both crop prices and, indirectly, livestock product prices due to higher animal feed costs[13]. During August 2007, both corn (maize) and wheat reached their highest price in 11 years[14].

  While this news will be welcomed by many farmers who have struggled under low prices for more than a decade, higher commodity prices are problematic for net food importing developing countries as well as the poor in urban populations. Furthermore, while higher prices for biofuel feedstocks support the incomes of producers of these products, they imply higher costs and lower incomes for producers that use the same crops for animal feed.

  A fundamental issue is that the demand for biofuels is putting substantial pressure on land and water resources at the same time as demand for food and forest products is also rising rapidly[15]. Furthermore, climate change will increasingly impact on agricultural production. For example, it has been reported that China's grain harvest will fall by 5-10% by 2030 due to climate change[16], at a time when population growth and changing dietary habits mean demand for grain is increasing rapidly.

  Second generation biofuels or crops such as jatropha which can grow on more marginal land should help avoid many of these issues. Small scale jatropha plantations can successfully be intercropped with agricultural, horticultural, herb, and pastoral land. Sustainability standards can insure that biofuel production favours these options.

3.0  RECOMMENDATIONS

  As we have shown in this submission, there are real and valid concerns about the sustainability of biofuels. Our key policy recommendations are:

    —  Government policy should deliver the maximum GHG emission reductions from bioenergy in a cost-effective way, based on its own biomass hierarchy. There is a compelling case to use biomass at the higher end of the biomass hierarchy (for heating) and not the lower end (for transport).

    —  Government should assess other policy instruments for reducing GHG emissions from the road transport sector and compare the environmental and financial cost implications with those involved in the use of biofuels for road transport. This analysis should shape any future EU and UK targets for biofuels.

    —  Economic instruments to encourage the uptake of low carbon energy should be designed to limit adverse environmental impacts. For example, the RTFO should include environmental safeguards, and certificates should be awarded only to fuels that meet environmental standards that cover soil, air quality, biodiversity, water use and quality, and waste management.

September 2007





1   http://www.camecon.com/press_releases/download/UKE3072.pdf Back

2   http://statistics.defra.gov.uk/esg/conference/aes2007/NigelMortimer.pdf Back

3   Righelato, R http://www.worldlandtrust.org/about/biofuel-policy.htm Back

4   RSPB Memorandum to the Select Committee on Environment, Food and Rural Affairs. http://www.publications.parliament.uk/pa/cm200203/cmselect/cmenvfru/929/929we15.htm Back

5   Palm oil yields are 6000+ litres per hectare, compared to 1188 litres for rapeseed oil in the UK. Back

6   http://www.iied.org/pubs/pdf/full/11068IIED.pdf Back

7   Thoenes, P (2006) Biofuels and Commodity Markets-Palm Oil Focus
http://www.fao.org/es/ESC/common/ecg/110542_en_full_paper_English.pdf 
Back

8   DEFRA, UK Biomass Strategy, May 2007 Back

9   http://www.defra.gov.uk/farm/policy/observatory/research/pdf/observatory08.pdf Back

10   DEFRA, UK Biomass Strategy, May 2007 Back

11   "Biofuels should benefit the poor", Jacques Diof, Financial Times, 14/8/07. Back

12   http://www.nfuonline.com/x9763.xml?action=preview Back

13   http://www.oecd.org/dataoecd/6/10/38893266.pdf Back

14   http://www.ft.com/cms/s/0/d9345496-4a84-11dc-95b5-0000779fd2ac.html Back

15   United Nations (2007) Sustainable bioenergy: a framework for decision-makers. Back

16   Planet Ark, 24.8.07 Back


 
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