Examination of Witnesses (Questions 120
TUESDAY 20 NOVEMBER 2007
Q120 Mark Lazarowicz: We have had
suggestions in some of the evidence we have received that the
carbon and sustainability standards, which have been developed
for biofuel, could be expanded to include ultimately all agricultural
commodities and this would be a good way of providing solutions
to environmentally and socially damaging practices internationally.
Mr Kendall, do you agree with that?
Mr Kendall: Again, I will return
to my comment from earlier on about non-trade issues in the WTO.
There are real issues about sustainability being put into trade
rules at the moment. You will find me wherever possible talking
about the standards of UK production. If I told you that 70% of
all pigmeat that is imported in the UK at the moment would be
illegal under UK standards, the more we can demonstrate through
labelling the standards of which we produce in the UK, the happier
I would be. We do want to look at sustainability criteria on agricultural
products, we do want to look at the carbon footprinting, but I
think we have to understand the science behind it and be careful.
As I mentioned in my earlier comments, we are producing in a natural
environment, we are not actually producing in a factory, so it
is quite a challenge. I want to understand the science because
I think some of the stuff which was quoted in your last evidence
session from Paul Crutzen again talked about nitrous oxides and
I think we have to be careful, the science has to be confirmed
rather than an initial paper which Paul Crutzen has published.
We have done some work with the Imperial College and even going
towards Paul Crutzen's figures on nitrous oxide, I feel production
in the UK can still be saving 70/80% of CO2 emissions or greenhouse
Ms Chalmers: Can I make a point
about the use of these standards for food. You will be aware that
one of the pragmatic frameworks for this carbon and sustainability
reporting scheme relates to the existing and effective use of
voluntary agri-environment schemes. One of the ones which has
been mentioned quite a lot, understandably, is the Roundtable
on Sustainable Palm Oil, which itself was an initiative of the
food industry. One of the things we have learned from the work
we have done on the RTFO is that a lot of these standards are
existing standards for the food industry which, as Greg Archer
mentioned, are now starting to address some of the issues which
concern biofuels that did not concern the food industry. What
we have seen, and will see from the new criteria of the RSPO next
month, is those criteria are being expanded to address the concerns
of the food industry and the biofuels industry so that there should
be one standard for both and not a differentiation in the market.
Q121 Mark Lazarowicz: The answer
from both of you is yes basically?
Mr Kendall: Yes.
Ms Chalmers: Yes.
Q122 Chairman: We have heard that
biodiesel produced here and in the EU is being undercut by cheap
imports from America because of a tax loophole there. Would you
like to say what impact that is having?
Mr Archer: It is not something
I have direct experience of, but certainly by talking to biofuel
producers in the UK it is clear that levels of UK production have
fallen enormously since this dash and splash arrangement started
to be implemented. It is having a profound effect both in the
UK and in Europe and it is a loophole which really needs to be
closed because it is creating a completely unfair competitive
advantage for US producers.
Q123 Chairman: That is the NFU's
view as well?
Mr Kendall: Absolutely, yes.
Mr Gagen: We have long argued
against the US sending soya products into the European Union that
are being subsidised.
Q124 Mr Chaytor: What about from
US imports? What I find hard to understand is how can biofuels
produced in the UK in the temperate zone possibly compete with
biofuels from tropical countries if the EU guarantees there will
be no tariffs on sustainable imports, as they appear to have indicated
will be the case? Can you construct a viable industry in a temperate
zone which can compete fairly and profitably with imports from
Mr Gagen: In the first instance,
we have been running the Food Assurance Scheme for ten years already,
which has full traceability right back to the independent audit
of every farm. We are in the lead in providing evidence which
is required, so that gives us a certain advantage. Depending on
what you do with the co-product produced in the bioethanol production
process, for example, you are taking about a third of the crop
to make bioethanol and another third of it to make dried distillers'
grains, if the carbon rules were very strict you could co-fire
those in a power station and gain carbon credits for that. We
are disappointed that there is no figure available for feeding
them to livestock because we think perhaps that ought to be accounted
for as well. When you add those together, yes, we are probably
very competitive with products from outside the EU.
Mr Archer: We have had extensive
discussions with the European Commission in trying to encourage
them to take forward the types of schemes which the UK has developed.
One of the main reasons they have put forward for not adopting
our kind of approach is they are worried that Brazilian sugarcane
ethanol will receive extra credits if you link to carbon, because
they do not want to see huge imports of Brazilian sugarcane ethanol
into the EU undermining European production. Frankly, I would
be surprised if we saw a complete removal of duty for sustainable
feedstock. The driver in most European countries remains the protection
of their agricultural industries and rural development. That is
the overriding driver which continues the biofuels policy at an
EU level. That is why it is so important that the UK is in there
arguing the environmental case and encouraging them to adopt the
kind of excellent practice which the UK has developed.
Chairman: Thank you very much indeed
for coming in. It has been a very interesting and helpful session.