Select Committee on Environmental Audit Minutes of Evidence


Examination of Witnesses (Questions 65 - 79)

TUESDAY 20 NOVEMBER 2007

MS JULIE FOLEY, MS AMANDA BARRATT, DR TONY WEIGHELL AND MS JESSICA MAGNUS

  Q65  Chairman: Good morning and welcome to the Committee. Dr Weighell, I gather you have replaced Marcus Yeo. Is that right?

  Dr Weighell: Yes, that is correct.

  Q66  Chairman: I was looking forward to declaring a non-interest in that I am not related to Marcus Yeo and I thought I would have to make that clear as it is not a very common name. Would you like to start by just saying what you think the overall environmental impact of biofuels will be and, in particular, whether you share the concerns that some people have that there may be as much downside as there is upside from biofuels.

  Dr Weighell: I apologise for Mr Yeo; he had an accident earlier this week. Speaking on behalf of the JNCC, the Joint Nature Conservation Committee, obviously we welcome the opportunity to speak here, but we will forget the niceties and get to your question. Biofuels offer a significant global opportunity in terms of social, economic and environmental issues, but the downsides we regard as very, very severe. In particular, the industry is being driven by the setting of mandatory targets around the world, targets being set in advance of our ability to know where the biomass is going to come from and the environmental, social and economic implications of that production. Again to keep it brief, one of the key concerns is that the key consumers in the northern hemisphere, China, India and the European Union, cannot be self-sufficient and they are going to put a large demand on global biomass suppliers, which inevitably will come from the Tropics because there is a competitive advantage there. We will be putting very significant pressure on ecosystems which in the Tropics are already under a lot of pressure and this will be additional pressure on those ecosystems. From our point of view, whatever the merits of biofuels, and there are merits, the downside is a very considerable risk because it represents an additional use of biomass and additional pressure on some of the major ecosystems of the world, so there are pros and cons, but the downside we see is a very significant risk which has to be dealt with quite quickly.

  Ms Magnus: I think the environmental impacts will depend on farming practices and how they are implemented. The main implications are likely to be land-use changes, soil degradation, effects on the water resources and air pollution.

  Ms Foley: I think we would agree with all of those comments. I think we support, from the Environment Agency's point of view, limited development of biofuels, as long as there are strict safeguards, and we are keen to see minimum standards both for carbon and sustainability impacts to be introduced as soon as possible so that we can have confidence that, in taking forward biofuels, they are really delivering all the carbon savings that they are billed to do and that they do not have a wider detrimental impact to the local environment. We think there is a lot of opportunity for looking at the design of the RTFO so that it more operates like a low-carbon fuels obligation and it is there to incentivise the lowest carbon fuels and takes a "well to wheels" impact which we have not really seen so much of before, which obviously would account for the wider impacts of where the fuel is coming from, where it is grown and things like that.

  Q67  Colin Challen: You have said that ecosystems are already under pressure, so should we really be trying to increase the use of biofuels at all? Is even our 5% target likely to be too much?

  Dr Weighell: As you are aware, there is a biomass hierarchy and the UK Government has published a hierarchy of use of biomass for energy use. We think there is a role for biomass, but it has to be carefully thought out and we think the principles adopted by that hierarchy which stress that, if you are going to use biomass for any of these issues, it should be used to produce essentially heat, combined heat and power and that, if you are going to use it, it should be at a strategic level of using it against that hierarchy, recognising that biofuels, in particular, are not necessarily the best way to use the biomass. However, I think there is an even more important principle, that, before even entering the hierarchy, you need to recognise the natural function of this biomass and that, by using biofuels to reduce carbon emissions, for example, it sometimes fails to recognise the natural function of the ecosystem which it is going to be compromising, so it may be a better place to use that biomass in a natural system, whether it is rainforest or wetlands, to maintain that integrity and enhance it rather than go through an industrial process which might have a negative effect. There have to be questions about whether we should use biomass for energy to achieve greenhouse gas reduction, but it needs to be used against the context of recognising the natural value of the environment which can do a lot of the jobs we are trying to engineer, but, if you start to use the biomass and engineer it, you need to, we believe, go through that hierarchy and get the best efficiency, so it needs to be done strategically.

  Q68  Colin Challen: You are drawing a distinction between biomass and biofuels, but specifically on the 5% biofuels target, do you think that is sustainable?

  Dr Weighell: In the work we have done and the analysis we have done, we think that 5% is potentially sustainable, so within the European Union, given what we know about agricultural production, we see the cut-off between sustainable and unsustainable as increasing beyond the 5%. Five per cent is likely to be sustainable, providing sufficient controls are in place to effectively use land and to monitor the impacts. The 5%, certainly in the EU, will be drawing in more imports and then it becomes more difficult to know what is sustainable and what is not.

  Q69  Colin Challen: So at the moment you are saying it is potentially sustainable, so there is a lot more work to be done presumably, but how does that square with the UK commitments on biodiversity and protecting water resources and so on?

  Dr Weighell: Well, you can square it with it if you take the necessary precautions through the transfer through accreditation schemes so that you understand where it is coming from and what the implications are. I think we can square that level of production and protect the biodiversity. The key thing is that, as you start to go much above the 5% and if you start to import material, the question of sustainability becomes more and more difficult to justify because you have to know where it comes from and the conditions of production. In a sense, the further away it is produced from home where we can see what is happening, the greater the danger because of being able to monitor the changes and essentially track where it comes from and understand what is happening and, as I said, beyond 5%, we start to feel uneasy about the volumes and the impacts.

  Ms Foley: Obviously from a UK perspective, we have the Water Framework Directive to bear in mind which will require all surface waters, coastal waters and groundwaters to meet good ecological status in the coming years, and we are still developing and understanding what the Water Framework Directive will mean, but obviously how we take forward biofuels will have impacts on water and soil quality. It will be particularly important to ensure that this is consistent with what we need to do with ensuring good water quality under the Water Framework Directive.

  Q70  Colin Challen: We have very high standards of monitoring in this country and in Europe and there are probably very low standards in the developing world. Should we just say that, if we are going to reach these targets, we should try and do it from indigenous resources and not go to the tropical regions where standards are very much lower?

  Dr Weighell: There is a question here between self-sufficiency and sustainability and the two are related, but not necessarily the same. I think you could argue that the EU should maximise its production within limits of sustainability to minimise the imports for the reasons you have just said, that, if we know where it comes from, we can monitor the impacts and we can, therefore, be relatively assured of the sustainability. The danger is that the more we import, there is the risk of knowing where it comes from and the sustainability.

  Ms Magnus: The European Commission estimates that, if second-generation biofuels do not come on stream on time, imports might be as high as 50% to reach the 10% target, and I would say that is a very conservative estimate, so the 10% target poses a considerable risk to achieving global biodiversity targets and the UK's environmental targets.

  Dr Weighell: I think there is one other fundamental point here in that, if we maximise the import, for example, we are essentially transferring the problem elsewhere and I think we need to take a look at the standards and say that we need to maximise the domestic production because we can see it and we are carrying the burden of that, and there may be some environmental burden, but to displace that burden elsewhere is, I think, not something we are going to accept, and we have to accept the burden.

  Q71  Martin Horwood: I am just slightly puzzled by the implication, first of all, that there is a sort of magic ceiling of around 5% above which we are bound to be drawing in imports because surely, if we can get the certification and the sustainability criteria right, we could actually expand it above 5%, even from domestic sources, if those were the right kind of land being used and so on. The other is the implication that all imported biofuels are also unsustainable because again that seems to be, at best, a bit simplistic because surely again, if you get the certification and the sourcing right, then it is possible to source sustainable biofuels from abroad?

  Dr Weighell: There is no magic ceiling. All we are saying is that, as you start to go above 5% in the European Union context, it will require more and more imports if you look at the productivity.

  Q72  Martin Horwood: What do you base that on?

  Dr Weighell: It is based on, for example, analysis we have seen coming through some of the investment banks that are looking at biofuels, our own analysis of the—

  Q73  Martin Horwood: Investment banks?

  Dr Weighell: For example, there has been a presentation by the Swiss Bank and the RADA Bank[17] which has done an analysis of the sustainability of biofuel production in Europe and their analysis suggests that, as you go above 5%, you start to require greater imports. If you look at the basic production figures of plant oils and cereals in the European Union, as you go above 5%, you start to use quite a lot of the European Union's resources in terms of agricultural products and that is where you start to question how much we can produce above that. The European Union itself accepts that up to 50% of the 10% substitution in 2020 is likely to come from imports, so that brings you back to the 5%. Five per cent seems to be sustainable from the European point of view, but then you are drawing on imports. It is not the case that all imports would be unsustainable and, if you have the certification schemes, that will help, but you need to go beyond that, so there is no magic ceiling, but you have to look at the land-use implications and then you have to have the certification to track what comes in. None of this is definite, it is a question of doing the estimates.


  Q74  Martin Horwood: The second half of the question is: are imports necessarily bad?

  Dr Weighell: No, by no means; in fact imports may be good. If you are providing an income for developing countries, there is a potential benefit there, but the question is the traceability, knowing where they have come from and the conditions under which they are produced. The bottom line comes down to the conditions under which biomass is produced is critical and you need to be confident that you know those conditions, and that is the critical thing. We are not saying that imports are bad, but it is a question of knowing where it comes from and what the implications are.

  Ms Magnus: Even if we manage to design sustainability standards, there is still a risk of who is going to implement them and who is going to police it, and certain conditions will not be covered by sustainability standards, like indirect land-use changes, for example, the land leakage and where is the displaced food production going to move if biofuels production is going to move into—

  Martin Horwood: But not all of it is going to go.

  Q75  Dr Turner: That brings me neatly on to the questions I wanted to ask. Obviously we are all agreed that sustainability standards are essential if biofuels are going to be used responsibly. Have you been involved in discussions on the establishment of standards, standards that are satisfactorily going to deal with aspects, such as deforestation, soil erosion, pollution and so on? Have you been involved and can you comment on the work that has been done so far in evolving standards?

  Ms Foley: We have not been directly involved in the advisory groups for development of the standards, although we are aware that DfT recently produced a consultation proposing carbon sustainability standards and, when we looked at that, we thought that was a very good starting point. I think our concern is that the standards come in as quickly as possible and that what has been set out seems to be very reasonable and I think it is just the speed of the intention of moving towards the mandatory status of those standards.

  Q76  Dr Turner: Jessica, you have already referred to a couple of the problems. One is getting the standards sufficiently refined to address the social implications and indirect environmental implications, such as indirect deforestation and so on. Do you think it is possible to design standards that will effectively cope with that?

  Ms Magnus: First of all, the JNCC has not been directly involved in the designing of standards and so far there is not one single standard in existence which is operational at the moment. The RSPO, for example, is in a pilot project stage and it is probably going to take another few years until it is operational and even that standard is not specifically designed to address biomass production for bioenergy, but it just looks at palm oil production and it does not cover, for example, increasing the amount of carbon emissions through the land-use changes, for example, this is not covered by the RSPO, and indirect land-use changes are not covered by any of these standards.

  Dr Weighell: We think standards are essential because they make a statement about what it is we are trying to do. However, standards are difficult to apply, as you said, because of a whole range of social, economic and environmental issues. Tracing biofuel flows around the world and applying standards is part of the solution in that, if you can track these and know where they have come from, that helps you to deal with the issues of knowing where they have come from and assuring yourself of the quality, but you have to go beyond that because that can only deal with the actual material flows that are maybe coming into the EU. The question is what is going elsewhere into the major economies, like China and India, who will be importing large quantities and whether they will apply the same standards. But you need the standards in a wider context which is probably more likely to come if there are bilateral issues between the European Union producing countries where you start to influence the total production of biofuels in that country so that the standards are part of it, but the wider strategy is to be influencing the way these things are produced in general, so whatever they produce means standards whichever way it goes and, whether it comes here or somewhere else, you have the same behaviour.

  Q77  Dr Turner: Clearly we can only contemplate direct enforcement within the EU, but by whom, and how, do you foresee enforcement of the standards, making them stick and stopping the inevitable pirates from undermining the system?

  Dr Weighell: That is actually a difficult question. There are obviously mechanisms at the World Trade Organisation, but those will take a long time to bring about. I am not sure that it is a question of enforcement. Clearly from an EU point of view, they need to be able to enforce the standards of material coming in, if that in part answers the question, but I go back to what I said before, that, in addition to the standards, you need to have the influence over the means of production in the major supplying countries and that is not a matter of enforcement, that is a matter of how production is dispersed, how technical assistance is provided and how other influences are brought to bear because the enforcement, I think, can only apply to a particular stream of materials which you can tag and label outside of that and there will be all sorts of things going on, including the land leakage and all sorts of other transformations which are very difficult to certify, but you can bring about controls or influence that sort of change by other mechanisms which are not certification, are not control, but other influences.

  Q78  Mr Stuart: We are going again and again over the same issue which is that inevitably biofuels put added pressure on land use and we already have great pressures on land use, so I think, according to Jessica's testimony, inevitably there will be leakage of agriculture into natural habitats. Is that the view of everyone?

  Ms Magnus: Yes.

  Q79  Mr Stuart: So, notwithstanding the fact that some other tools could be found, there is inevitably going to be leakage, so I suppose that will raise the question, but how confident can we be?

  Ms Foley: There is that risk. Looking at it from a UK perspective where the Environment Agency is going to be more focused. Things like the Water Framework Directive should mean that we have a debate about where it is most cost-effective across different sectors, not just the water companies, but farmers and land managers, to meet water quality standards. As part of meeting the requirements of the Water Framework Directive, we may need to suggest, for instance, that there are buffers around watercourses and that we need to take some land back out of production, particularly if we see an easing down of set-aside, in order to meet our Water Framework Directive commitments. So the Water Framework Directive as a whole does provide a means of having a debate about land use which could run counter to the pressures for more biofuels potentially.


17   Note by Witness: The presentation was given by the Dutch financial group and the Rabobank, not the Swiss Bank and the RADA bank. Back


 
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