UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 648-vHouse of COMMONSMINUTES OF EVIDENCETAKEN BEFOREENERGY AND CLIMATE CHANGE COMMITTEE
LOW CARBON TECHNOLOGIES IN A GREEN ECONOMY
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Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, Telephone Number: 020 7233 1935
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Oral Evidence
Taken before the Energy and Climate Change Committee
on
Members present
Mr David Anderson
Colin Challen
Charles Hendry
Anne Main
Judy Mallaber
John Robertson
Sir Robert Smith
Paddy Tipping
Dr Desmond Turner
Dr Alan Whitehead
In the absence of the Chairman, Paddy Tipping was called to the Chair
________________
Memorandum submitted by Stuart Hillmansen
Examination of Witnesses
Witnesses:
Professor Julia King,
Q248 Paddy Tipping: Welcome to Professor King, Dr Hillmansen and Greg Archer. This is an inquiry about moving towards a low carbon economy. I am very grateful for the submissions that you have already made. Perhaps we could start by having a discussion about the fiscal package that the Government has introduced, the stimulus package: how far it really is green, whether there is a green element to it and how far transport and the transport sector has benefited from that. Professor King, would you like to start, please?
Professor King: I am probably going to overstep the fiscal stimulus package. I am somewhat concerned, for example, about the scrappage scheme because it was introduced without a requirement on new cars being, for example, at least below the 130 grams per kilometre, which will be the new European Union requirement for 2015, and there is evidence from a number of studies, including a recent study from the International Transport Forum in Paris, that show that scrappage schemes which are introduced without a stiff limit on CO2 for the new vehicles purchased actually contribute to additional CO2 emissions. I think that was extremely disappointing. The Committee on Climate Change advised the Government that they should put a limit, but that was not put in place, and I think the calculations that the Committee on Climate Change has done on the current scheme show that actually it looks as if consumers have bought relatively low emission cars but, even so, it is unlikely to be a net benefit for CO2, and that is an opportunity missed. I think the support to the car industry for reducing their emissions and for producing lower emission models is a good thing. The 230 million in support for electric vehicles from 2011 onwards is good, but you may see in the Committee on Climate Change report we do not think that is anything like enough because we are trying to radically change an industry that has been doing cost reduction for the last 100 years. The new technologies we would bring in have not had the benefit of that. The batteries in the first vehicles will be extremely expensive, and we have suggested that the figure needs to be, realistically, more like about 800 million and, indeed, that we should be looking at a scheme that starts with quite significant subsidies, which might need to be 10,000 plus per vehicle, which then tail off as vehicles get cheaper and the industry becomes more established.
Q249 Paddy Tipping: Mr Archer.
Mr Archer: I think what we need to
understand is that the scrappage scheme was introduced primarily in order to
support the
Dr Hillmansen: As you will have gathered from my submission, I am going to put a railway view of the world to you today. In terms of the green stimulation packages that have been offered, these are, in my view, supporting emerging low carbon technologies, also supporting traditional ones, like wind turbines and other renewable energy sources, and also supporting our traditional environmental sectors, like reducing pollution, and so on. What I would say of the railways is that it is a system which integrates lots of these things together, so it will gain benefit from all of those packages. One of the things I would like to talk about perhaps in detail in later questions is how electrification and the increasing decarbonisation of our grid mix is going to help the railways both in terms of reducing the primary energy used and improving efficiencies.
Q250 Paddy Tipping: The Obama administration has got a lot of political
credit for a green new deal. Do you
think there is a green new deal here in the
Professor King: I am sorry; I did not hear who that was directed at.
Q251 Paddy Tipping: Any one of you. Just pitch in. Everybody else does here.
Professor King: I think there is a lot of
good intent. We have got some coming
from DECC and, indeed, other departments.
I think what we are lacking at the moment is real delivery. I think real delivery is going to cost rather
more money than anybody is mentioning being put into any of these schemes. It is corny to say, but we have spent an
awful lot of money on the banks. It
would be good to see us spending even a fraction of that on really trying to
develop the green economy in the
Mr Archer: I think the scale of the green measures which were announced is just a tiny fraction of UK GDP and is, indeed, much lower than the fraction which is being allocated in other countries which had similar green stimulus measures. Probably the highlight would be what has been happening in the US, particularly in South Korea, where they invested £1.2 billion in low carbon car technologies and the overall value of their green stimulus was 2.6 per cent of GDP rather than .00 something which has been calculated for the UK. What I would say is that the support that has gone to the motor industry, I think, has helped particularly the supply chain companies during the period where there were quite long shutdowns of manufacturing facilities, and it is really important that we retain a strong automotive sector in the UK so that we can actually benefit economically from the low carbon technologies which will be emerging over the next ten to 20 years and be at the forefront of those initiatives. So the fact that we continue to support the motor industry during this difficult period and will continue to do in the future will pay dividends in terms of the investments that those companies are able to make in supporting low carbon technology in the future.
Q252 Paddy Tipping: Presumably, Stuart, you think there ought to be more investment in rail.
Dr Hillmansen: Absolutely. I would just say about the railway industry, a number of years ago there was some interesting research published which questioned the environmental credentials of the railway and at that time I think the railway industry did not have sufficient data to robustly defend itself, but in recent years that has certainly changed, and now certainly all the colleagues that I see and speak with in the industry understand that this is an important issue for them. Certainly it is something that the passengers are expecting to know about as well and is often used in marketing information and so on about the CO2 content of a particular journey. I think the railway industry is taking it very seriously at the moment and trying to get a good understanding of its total CO2 emissions, which is good news. I think generally rail is ahead of other transport modes, but they are certainly not complacent about things like electric vehicles and so on catching them up. I think there is a positive future in that sense.
Q253 Judy Mallaber: Picking up on what Greg has said, and bearing in mind your comments on the programmes brought in by other countries, do you think that if we act now there is a potential export market for low carbon vehicles or are other countries' programmes going to limit it and we are, therefore, in danger of importing technology instead of adding to our export market?
Professor King: I think there are some real
opportunities for us. The introduction
of some radical new vehicle technologies to a degree is going to disrupt the
conventional players, and we are seeing in the electric vehicle market some
niche players, for example Tesla in the US, who have been working with Lotus in
the UK, appearing with new offerings which look as if they could be quite
successful in some of the niche areas. We
have also seen that what we have done in the UK in things like the low carbon
vehicle demonstration project, which is now running and which by next year will
have 340 ultra-low carbon vehicles across a small number of cities in the UK,
have attracted the world's attention to us and the announcement of that was
followed quite rapidly by Toyota's announcement that we would be one of the
first two countries in which they would be building the new Prius and then the
Nissan announcement that they would be bringing battery manufacturing to the UK
and potentially also their electric vehicle, the Leaf, to be manufactured in
the UK. I think our situation is that we
have to recognise, as Greg has mentioned, that we are a very important supply
chain player in the UK but we do not really have very much OEM activity, apart
from the rather niche luxury vehicle market.
The requirements for us going forward, I think, are to make sure that
our supply chain is well positioned to adapt to the new technologies that will
be needed in vehicles of the future. For
example, we make 30 per cent of the engines for cars for
Mr Archer: I think what I would say is
the Government has announced £400 million of investment in low carbon vehicles
over the last year or so. When I started
in my current job five years ago it was spending a few million pounds a year,
and that, I think, shows the rapid scale-up in investment that has been made,
but other countries are making similar and even larger investments. I mention
Professor King: I think one thing Greg and I
would agree very strongly on is that we see the formation of the Office of Low
Emissions Vehicles as a potential real opportunity here, but only if it
actually has some teeth. If the Office
of Low Emissions Vehicles really can take an overview and co-ordinate the
activities at national government level, at local government level, at Technology
Strategy Board level, at Research Council level, at Energy Technology Institute
level, if we can really bring these different pots of money, these different
levers together, if we can really get local authorities in a co-ordinated way
to support the infrastructure developments, we can really start to put together
packages of measures that will appeal to early adopting consumers for some of
the new technologies and will also appeal to the manufacturers in terms of
seeing the UK as a place where both vehicle development and new models need to
be brought. At the moment OLEV has
nominally this budget of 400 million, but actually it is all allocated already
in different areas and it has got to try and herd cats. It reports partly to BIS and sits in DfT, so
it has got a lot of challenges ahead of it.
It is a real opportunity to bring things together and make the
Mr Archer: To give you an indication of the scale, we have got 341 vehicles in the current demonstration programme. The £230 million investment to support purchase will give you around 50,000 vehicles, something like that. The Greener Transport Strategy is forecasting around 800,000 electric vehicles by 2020 and the Climate Change Committee want 1.7 million vehicles. That is a very big gap, and at the moment we do not have clear plans about how we are going to go from 341 to 50,000 and then from 50,000 up to hundreds of thousands or millions of vehicles, and that is the work that still needs to be mapped out.
Professor King: If 1.7 million sounds a lot, the French Government has announced its target of two million electric vehicles on the road by 2020 and the German Government have announced a million. So, 1.7 million is very much in the ballpark of the ambitions of our major European neighbours.
Mr Archer:
Q254 Judy Mallaber: Everyone is making all these announcements. Are you saying that, regardless of the amounts currently spent, the Government is putting the money that is available on the most beneficial activities? Is it a question of where they put the money, wanting more money or organising the current pots of money better? What would be your immediate wish list for what the Government should be focusing on?
Professor King: Unfortunately, there is
never one thing that will solve the problems.
I certainly think we need to invest more money in this. Overall, if we are going to meet our carbon budgets
longer term, apart from this one in the first budget timescale where we may
meet it because of the impact of the recession rather than because of the
measures that have been implemented, we are going to need more funding to
stimulate some of these industry activities and some of the consumer
activities. I think, very clearly, in
stimulating electric vehicles there needs to be more money in terms of initial
purchase support for vehicles if we are going to get anywhere our 1.7 million
target by 2020, and so we have said in the Committee on Climate Change report
there are a whole range of figures, obviously depending on a whole range of
different models and scenarios, somewhere around 800 million in the purchase
price and probably another 100 million or so in support of infrastructure
development to give consumers the confidence to use these vehicles. However, we have not got to make that
decision immediately because these vehicles are going to start arriving at the
end of 2010 through 2011. We do not need
all that purchase support immediately; we do not need all the infrastructure in
place immediately; there are quite a number of studies going on which will give
us more evidence about what is really most likely to be necessary, but we have
to recognise that those sorts of sums of money are going to be required as we move
forward if we want to make these things happen.
I think there is a real opportunity in getting different organisations
and different levels of government to work together better. There was an announcement, I think from
Nottingham County Council, that it was going to charge employers £2,000 a
parking space for parking in the city centre.
I am an employer in the centre of
Mr Archer: I would agree with most of what Julia has said on electric vehicles. My view is that the 800 million that the Climate Change Committee have estimated is probably at the lower end of what is required because they have made some quite optimistic assumptions, but I leave that aside. What I would say, however, is that I do not believe electric vehicles are going to be a silver bullet. There is going to be a range of technologies which emerge. We need to make our existing internal combustion engine vehicles much more efficient and we can do that, and we need to be investing and incentivising people to choose those lower carbon models. Also, I think biofuels and advanced biofuels in the future are going to play an important role in low carbon transport and we ought to be making similar incentives to encourage the shift to sustainable biofuels and advanced biofuels, investing the kind of money which we are now talking about investing in electric vehicles.
Q255 Paddy Tipping: We will come to biofuels in a moment.
Mr Archer: My main point here is, yes, we have made an excellent start on electric vehicles and we need to go a lot further, but let us not forget that actually there will be a suite of technologies in the future and we need to be incentivising and encouraging all of those realistic practical ones, not focusing only on the electrification agenda.
Q256 Anne Main: A short question. You have talked about low carbon emission engines. Are you convinced, particularly with the scrappage scheme as well, that there is enough monitoring being done of the carbon footprint of these new vehicles and assessment of it as well?
Mr Archer: I think we have got a fairly good understanding of what the life cycle emissions of existing vehicles are. Very broadly, 80 per cent of the emissions come in use from the petrol (the fuel), 15 per cent in manufacture, five per cent in disposal. For the new vehicles of the future I think there is more work to be done around particularly the life cycle emissions of the batteries, and I think there is still a range of data available and not all of it is of high quality, so I think that is an area that does require some further research.
Professor King: I was at a conference in
Q257 Anne Main: Are we doing it? Do you think there has been enough of a steer for us to do it?
Professor King: I think the industry has understood that steer and I think researchers are very aware of that steer. There is a real interest at every meeting I go to: are we looking at scarce resources, are we looking at things which are going to damage the environment, are we looking at things which are going to be as readily recyclable as possible? I think that is very much in place. Of course, the decarbonisation of the power generation will also have a big benefit on industry and, of course, manufacturing industries are also covered by a number of the emissions reduction schemes themselves. So there is quite a pressure, actually, on reducing emissions in manufacturing.
Mr Archer: I think there is very wide
acceptance within the industry that they will move away from simple tailpipe
measures to life cycle carbon measures and they are getting a much better
handle on their carbon footprinting and reducing their emissions in manufacturing
very substantially. Some of the new
lightweight materials will also be quite carbon intensive; so there will be a
challenge in terms of making vehicles lighter but also lower carbon. I think, more generally, in the longer term
we need to recognise that we will have to move away from our current quite
simple measures of tailpipe emissions to having the kind of metrics and
taxation schemes that measure the whole life cycle impact of the vehicle. My own partnership has a project on that that
is just starting at the moment just to start to think about how we might do
that and what the implications might be.
In fact the
Q258 Charles Hendry: I think we have heard some really helpful and fascinating answers, and I think it shows part of the problem of sometimes having targets without delivery mechanisms and not knowing quite who is responsible for making sure you get there. Is it not inevitable though that the UK will lag in terms of the ambition, partly because of the pressures on our generating capacity, and if one was going to try and roll out electric cars too quickly we simply have not got the generating capacity there to provide them with the necessary charging facility where we need to have new investment coming in? In the early stages, if that happened soon, it is less likely to be low carbon, it is going to be based on hydrocarbons and, therefore, one is building unsustainability into it. Given the system which we have with our current generating capacity, is it not inevitable that we will lag behind some of the other countries which already have low carbon electricity?
Professor King: We have looked at that in
great deal on the Committee on Climate Change.
Clearly, as Stuart, I think, raised very early on, the absolute priority
for all developed countries is decarbonisation of the grid. Almost all countries. Let me exclude the Nordic countries and,
indeed,
Q259 Sir Robert Smith: Using the current grid?
Professor King: Yes, using our current grid electricity, our current grid average electricity of 550 grams per kilowatt hour. By 2030 that would be down to about 20 grams of CO2 per kilometre. So that would be radically decarbonised. The issue is we have got to meet our targets on decarbonising the grid but we have not got to do that just for electric vehicles, we have got to do that if we are going to meet our carbon budgets generally - it absolutely has to be our priority - and, of course, it gives us all the options in electric rail and makes them a really good low carbon option as well. Again, you cannot suddenly introduce electric vehicles, industry has to grow, and so there have been a number of pieces of modelling, some of which were done on the Committee on Climate Change, some of which were done by a very good study done by Arup and Cenex for the DfT and BERR, as was last year, looking at what realistic rates of introduction might be if we start now in trying to stimulate the industry, and at those sorts of top-end of the fastest rates of introduction of electric vehicles and plug-in hybrid electric vehicles that you can imagine it has very little impact on our grid. It has slightly more impact on the distribution system but it is nothing you cannot readily build into the developments we need in our distribution system anyway and the developments we are absolutely going to need if we are going to have more local generation and more of the local green generating technologies. It is not actually a big additional issue. It is something that if we do not start now it is not that we will not meet the 2020 targets, as Greg has said there are lots of improvements to conventional technology that would actually get us to 95 grams of CO2 per kilometre by 2020 without any electric vehicles, without any early stage hydrogen fuel cell vehicles, we do not actually need any of that to get to the 2020 target, but because this is an industry that we can only change relatively slowly, if we are going to get beyond the 2020 targets to targets for 2030, 2040 and 2050, we have to be introducing these changes now.
Mr Archer: The modelling studies show
that even with about two million electric vehicles on the road, if they
all plugged in they would still only add about one to two per cent to peak
demand. So that would be looking out to,
say, a 2020/2025 horizon. The other
benefit, of course, with smart metering and issues like that is you actually
have the opportunity that you can encourage people to charge their vehicles
overnight, and we can expect that by 2020/2025 we will have a much more
renewable generation and more nuclear.
Therefore, we will actually want more base-load demand overnight and electric
vehicles are very complementary to our new generating mix that will
emerge. So I do not think people should
be concerned unduly about demands on the grid.
There will, as Julia has mentioned, be possibly some very local issues
with the distribution network. You can
imagine a sudden take-up of electric vehicles in
Q260 Charles Hendry: Can I pick up on what you were saying earlier as well, Greg, about the need for a range of different technologies. Clearly there is an evaluation which says that some will deliver a low carbon society more quickly than others or more effectively, there may be some interim technologies which will have a role to play over 20 years but not over 40 years, therefore can government afford to be neutral? Does government not need to say, "If we are going to get there, these are the technologies we need to be using at this point", especially bearing in mind that if it chooses some particular options there are very significant costs in terms of the infrastructure? If one was to move to a hydrogen-based economy one has to have filling stations or refuelling stations around the country, and that would require some degree of government mandate to make it happen. Can government be genuinely neutral between the different technologies?
Mr Archer: I think there is a range of views on this.
Q261 Paddy Tipping: What is the answer?
Mr Archer: I will give you this answer. There are certain areas in which government can afford to be entirely technology neutral. It does not need to specify hybrid technology in order to make existing ICE vehicles more efficient; it can simply specify, "We need to achieve this improvement in tailpipe CO2", and drive the market in the right direction. There will be other areas, particularly where alternative fuels or power trains are required and new infrastructure is available, where government will need to actually make choices because it will be too expensive in order to invest in a whole range of different technologies, and particularly fuels. I think it is quite clear that there are a small number of technologies which are now emerging as likely to be medium and long-term solutions. Electrification, both pure EV and plug-in hybrid is likely to have an important role. I believe that biofuels will have an important role also and it may be that that role in the longer term is more as a power source for a range extended hybrid vehicle rather than being used in combination with petrol and diesel in an internal combustion engine. If we can address the challenges of hydrogen and fuel cells, it may be that the hydrogen and fuel cells become cost-effective in some period beyond 2030, at which point government will have to decide whether or not we need to make the investment in that technology then or, indeed, our existing mix of technologies is fit for purpose for the foreseeable future. That is to say we need to be continuing to invest in making sure that that opportunity could potentially emerge, but we do not have to make a hard choice now in terms of investing billions of pounds in developing that infrastructure right now whereas we do need to be talking about spending millions of pounds on developing electrical recharging infrastructure because that is nearer term. I think in some areas we can afford to be entirely technology neutral and in other areas we need to make choices. We now do have the NAIGT (New Automotive Innovation Growth Team) Roadmap that gives us a clear idea of where vehicle manufacturers believe the technologies are, and that is in electrification, it is in biofuels and it is possibly in hydrogen fuel cells in the future, and we have also got roadmaps for how we can improve the efficiency of existing vehicles where we can afford to be more technology neutral. There is a mix of answers there, but it shows that there are areas where choices will have to be made and areas where we can allow the market to simply compete.
Q262 Dr Turner: Can you give us an idea of what the overall potential is for reduction of our CO2 emissions on a national scale? What contribution to that can low carbon vehicles make?
Professor King: Transport is the third
largest area of CO2 emissions for the
Q263 Dr Turner: Of current transport emissions?
Professor King: In emissions from light-duty vehicles. We can see a way of getting to the 90 per cent reduction level for 68, 70 per cent of our transport, excluding aviation I have to say. I think the other areas are more challenging. The larger vehicles, clearly on the railways Stuart has mentioned electrification and probably has other areas on railways. In some ways, more challenging are the heavy goods vehicles and the buses, but I think that is not my area, it is an area that Greg is better qualified to speak on.
Mr Archer: Certainly HGVs and efficient freight mechanisms generally is a hugely under-exploited area at the moment. The technologies are more expensive, but clearly the fuel costs of running these vehicles are very substantial and, therefore, the market is very receptive to low carbon technologies, fuel efficient technologies which are available. There are some now starting to emerge. I particularly highlight the opportunities for bio-methane in articulated trucks where there are return-to-depot type operations. Bio-methane is an entirely sustainable biofuel. It is a bio form of natural gas. It can deliver greenhouse gas savings of anything from 60 to over 100 per cent of the fossil equivalent, and certainly in articulated trucks there is a really good potential for it with the current duty breaks which already exist, but we need to build up the infrastructure, we need to make sure that the anaerobic digestion facilities which are now being built also have the capacity for refuelling vehicles as well as for combined heat and power and injecting into the grid. That is an area where I think we could make a big step forward over the next few years and where I know there is emerging interest within the Department for Transport. I would also highlight the fact that there is probably at least a 50 per cent improvement that we could deliver in the efficiency of our existing vehicles by mid 2025 to 2030 through a whole range of technologies: new engines, new aerodynamics, better light, better tyres, so on and so forth. That will bring us down on a tailpipe basis to something between 75 and 80 grams per kilometre by around 2025 to 2030. Beyond that there is debate as to whether new technologies which capture heat and reuse heat could bring in more efficiency and the like or whether, indeed, we need to make a more wholesale switch to electric transport. There is a difference of opinion between some engineers who see the future as being largely electrification and others who think that we will continue to make incremental improvements in the efficiency of vehicles to enable us to get down to very low levels through other routes.
Professor King: I think electrification of HGVs is quite a challenging thought. I think we will need other technologies for large vehicles.
Paddy Tipping: I will come to railways in a second.
Q264 Dr
Turner: The Climate Change Committee has got some
short-term targets: 240,000 plug-in or hybrids by 2015. Do we have the technology and productive
capacity in
Professor King: We are putting forward scenarios which we believe are achievable, there has to be infrastructure and, indeed, manufacturers have to be confident to deliver those vehicles to market. In terms of announcements, we have seen the announcement of the Mitsubishi i MiEV, and they are looking to get up to, by about 2012, about 200,000 units per year; there is the announcement recently of the Nissan Leaf (we have not yet heard what their early targets for manufacturing are going to be)' we are expecting announcements about the BMW Megacity. They have produced an electric Mini for the 340 vehicle demonstration activity we have got going on but they are saying that is not going to be their first production electric vehicle. I think that is shame, but there we are. So there are a number of manufacturers. We have got most of the French manufacturers coming out with announcements about electric vehicles, so it looks as if that is not an unrealistic target, but what we are saying here is we are trying to accelerate that movement in an industry which has been very hard hit by the recession globally and we are, therefore, trying to make sure that they can see that countries will be doing their bit to stimulate the market for these vehicles, because unless they can see a market they are not going to bring the vehicles to market.
Q265 Dr Turner: There is also a concern about the availability of some
of the raw materials, particularly lithium and rare-earth and the obvious
possibility that
Professor King: I personally do not think lithium is a particular issue. There is a lot of lithium in quite a number of places. Rare-earth for magnets for electric motors right through the economy is an areas that does need more attention, because that is not just vehicles, that is moving to a more electrified low energy economy. There will be a lot more electric motors and other devices that need magnets and I think the rare-earth is an issue that does need addressing. Europe and the US does need to recognise that it needs to move forward on these technologies because whilst we are talking about, potentially, a few million electric vehicles by 2020 in Europe, the Chinese are announcing 70 million electric vehicles by 2020, so there is both a threat and an opportunity in the markets out there.
Q266 Sir Robert Smith: We have been hearing all sorts of measures to try and get to a good end, either through regulation, through incentives in terms of car parking and also Europe has embraced emissions trading, so there is the market trying to drive it, there is regulation trying to drive it and personal incentive trying to drive it, and then in answer to Charles, talking about how for some of these technologies in reality you need a government steer because there is such a huge infrastructure. Does the Government have the resources, both in the skill-set and physically, to make these judgments to steer the market to get the end that we are looking for?
Professor King: That is always a challenge,
and as an engineer I would always say I do not think
Q267 Sir Robert Smith: Is there not a danger that was picked up in some evidence in Denmark that because we are now part of the European-wide Emissions Trading Scheme, if we produce any subsidies that are UK specific, they will leach out, in effect, and we will be subsidising the whole of Europe because of the trading of the emissions and, therefore, one lever has maybe been lost in terms of tackling or incentivising? Obviously you can use regulations that are specific to the country, but if you use a specific subsidy in one part of the EU, you are, in effect, subsidising the whole of the EU because of the trading in the emissions?
Professor King: Emissions trading does not yet cover the transport sector. I think there are all sorts of complexities in terms of introducing it, particularly in terms of introducing it for aviation and how we decide whose emissions are whose. There are some huge challenges ahead that I hope people will take pragmatic approaches to because we do need to get these emissions into a trading sector.
Mr Archer: It is certainly the case that the incentives we are creating for an electric vehicle or low carbon market for vehicles in the UK will benefit overseas manufacturers which will also supply into our market, but I think what we have to recognise is that by doing that we are also creating early market opportunities for our own businesses that simply would not exist otherwise. That is a really important reason that we are pushing forward on the electrification of transport now to ensure that the good companies that we have got really do have a good opportunity to expand and develop and become the new technology providers of the future. If we do not make that early move here then other countries will make that investment and it will be their businesses which have that first mover advantage.
Q268 Mr Anderson: I want to pick up on the point that Charles raised about basic raw materials and, in particular, copper. If we are going to have, as I understand it in the north-east, 7,000 off-shore wind turbines, we are going to upgrade the whole of the National Grid, we are going to have millions of vehicles which will need electric motors and we want to electrify even more on a rail basis, all of which are good things to want to do, have we got sufficient supplies of copper in the world to do this on a global basis?
Mr Archer: I do not know the answer to the copper question. I would agree with the point that Julia made that lithium does not seem to be a problem, but some of the rare-earth metals which are used in windings in motors and things like that have been identified as a potential issue. I am afraid I cannot comment on copper.
Professor King: Copper certainly has not been identified as an issue, and, of course, there are alternatives for copper in some areas of application where it is currently used. Some of the major cabling and things can be dealt with in other ways, so it is not one that anybody in the industry is finding as an issue, but, like Greg, I cannot give you an absolute answer on that.
Paddy Tipping: We have talked a lot about biofuels already. Anne Main is going to pursue this.
Q269 Anne Main: This is a very specific question. I know Mr Archer said we should be looking at
more sustainable biofuels, but I think this one might be for Professor
King. Recycled cooking oil. Do you believe we have missed a trick here in
that you are not allowed to use recycled ethanol in recycled cooking oil to
qualify for ROCs and that you have to use a far more expensive process, I
believe using sugar to get an ethanol to mix with the recycled cooking oil? I believe we export lots of recycled cooking
oil that could be utilised within the
Professor King: I am sure there are small issues like that but, to be honest, recycled cooking oil is not going to revolutionise transport fuel. The issue of transport fuel is an issue of scale, and that is why petrol and diesel work, that is why electricity has the potential to work in the short to medium term and that is why hydrogen does not yet work because we do not have low carbon production of hydrogen and distribution of hydrogen at scale. That is why some of these things are interesting for little local applications but are never going to make a radical difference to the transport fuel situation. So there may well be small areas where legislation which is trying to address that---
Q270 Anne Main: If we look at methane - this is something that is already there - it would be simple to just move the thing along a bit.
Mr Archer: The point that you are making concerns the definition of ROCs and particularly biodiesel from used cooking oil to qualify for ROCs in which you have to use biomethanol in order to produce the biodiesel. Frankly, it is bonkers to have an entirely different criterion for the sustainability of biodiesel going into power generation as that going into transport. It was quite an unnecessary complication that was created. It has caused problems, particularly for small biodiesel producers using used cooking oil, and the sooner it gets sorted out the better.
Q271 Anne Main: I have had it pointed out to me that it is a bonkers anomaly and I am glad I have heard it from you! Perhaps we could ask that this bonkers anomaly is got rid of.
Mr Archer: It is obviously a technical term!
Q272 Dr Turner: Quickly, on biofuels, Greg, what is your estimate of the actual contribution, in percentage of total use, that biofuels can contribute given the limitations imposed on biofuels because of the competition for land use food production?
Mr Archer: I think there is some new
work that has been done by the Renewable Energy Association that has also been
peer reviewed by
Paddy Tipping: Stuart, you have been sitting for a long time waiting for the whistle to blow on the trains and this is area where we can make some big progress.
Q273 Dr Whitehead: You mention in your memorandum to us that, on the one hand, the rail network is actually a relatively low carbon network and potentially a very low carbon network, but what particular technologies do you think could move us along in the best possible way?
Dr Hillmansen: To expand upon that a bit,
the
Q274 Dr Whitehead: You mention that the penetration of new technology could take a long time because of the expected lifespan, for example, of rolling stock.
Dr Hillmansen: Yes.
Q275 Dr Whitehead: You say it would be a bad idea to decommission existing rolling stock. Why would it be a bad idea? Should there not be a scrappage scheme for rolling stock on the railways?
Dr Hillmansen: I think it would be a very expensive scrappage scheme.
Q276 Dr Whitehead: Or even a conversion scheme?
Dr Hillmansen: Again, the idea of retrofitting railway vehicles has been mentioned and it is something that is achievable. However, partly because there are low volumes of vehicles in the industry, it is very expensive to do major modifications to traction systems and, if you look across the spectrum of rolling stock, we have got the stuff which is quite inefficient all the way up to something which is very efficient in terms of taking electricity from the overhead and delivering it to the wheels, so there is a range of efficiencies in the industry at the moment, but I do not think, based on a marginal improvement in energy consumption, that you would be able to justify scrapping vehicles that still had ten or 15 years' worth of life. It is only really a minority of vehicles which, I think, are nearing the end of their lives at the moment which could be used on the lightly used parts of the network, so it is not a huge issue and it is nothing really to worry about in the same way as it is for the automotive sector.
Q277 Dr Whitehead: When you say that parts of the network are not electrified, that is, is it not, a relative term inasmuch as it is true that the majority of the passenger kilometres are electrified, so only a minority of the rail network itself is actually electrified?
Dr Hillmansen: Yes, that is right.
Q278 Dr Whitehead: So is the Government being ambitious enough? You mentioned the electrification scheme for London to Swansea, but should there be further ambitions in this respect, and do you think there also comes a point, however, when the cost-effectiveness of this comes to a balance and at what point might that balance be achieved in terms of ambitions in terms of the electrification of the network as a whole?
Dr Hillmansen: Well, what I would like to
see in the current electrification plans is a sustained programme of
electrification. If you look at what we
have done in the past, there have been bursts of electrification on the East
Coast/West Coast Mainlines and, after each burst, everything stops and you have
to think what happens to the skills and the people who are doing it. Although railway procurement is global and
you can have international suppliers and so on, it seems sensible to say that
we would like an electrification programme that will span over the next 20
years or so, so Great Western, I believe, is going to take eight years from now
and the
Q279 Dr Whitehead: Are we not over-engineering some of the suggestions on electrification for lesser-used lines? I remember well going to school on a trolleybus which is a rather more low-tech version of electrification, is it not?
Dr Hillmansen: Yes, I think those sorts of technologies should be looked at in some detail. The standard mainline electrification can deliver huge power to railway vehicles and propel them along at very, very high speed, but for the lightly used parts of the network maybe some lower grade of technology is something that we should seriously look at and look at ways of installing it on a cost-effective basis. I agree, I think it is something we should definitely look at.
Q280 John
Robertson: Could I talk about the skills. Unite, the union, have suggested that the
Government introduce a
Dr Hillmansen: Speaking from a university perspective, we certainly at the University of Birmingham encourage many of our graduates to go into the railway industry, and we use the railway as an example in many of the lectures, so in terms of graduate recruitment into businesses, we are certainly promoting that, and I think there has been a change in how the railway industry is viewed as now a high-technology industry and attractive for them. However, at different levels I think there are other issues that need to be addressed, and certainly apprentice schemes and so on could be used to encourage people in.
Q281 John Robertson: Do you talk with other universities and do you talk with the various companies and Network Rail on a regular basis?
Dr Hillmansen: I am actually part of a
research organisation, Rail Research
Q282 John Robertson: So it would be fair to say then that you are well behind the nuclear industry in this where they have various connections with education, et cetera, and also they have degrees that are tailored for their needs. Do you not feel that maybe the others would feel the same would apply to them, that you need to tailor degrees that are going to be fit for purpose in the future?
Dr Hillmansen: I know that some universities have tried specific railway engineering-type degrees. However, I think the view that we have at Birmingham is that we should concentrate on the core disciplines of electrical engineering, mechanical, civil and so on, but in the course of a degree programme use railways as learning examples and then you have somebody who is equipped in a discipline and can see how that could fit into the industry. However, I would say that we do offer at Birmingham a Masters programme in railway systems engineering and integration which is mainly attended by people from the industry who are looking to understand a little bit more about the whole system. Railways systems are very, very complex and they have lots of different technologies in them, a whole host of different areas, so understanding how they integrate together is really the core focus of that Masters programme, so I would not say we are too far behind other industries in terms of what universities can provide towards equipping skills in these kinds of organisations.
Q283 Paddy Tipping: Politicians have real difficulties with things like congestion charging, road pricing and, dare I say it, reducing the speed limits on roads. Those are all initiatives that we are going to have to take, are we not?
Professor King: One thing I was going to say when Stuart was saying that we should not really be too worried about actually decarbonising some of the branch lines is that I think we should recollect that, if we were to enforce the 70 mile per hour speed limit on motorways, we would save 1.4 megatonnes of CO2 per year. If we were to reduce it to 60 and to enforce that, we would save another 1.5 megatonnes of CO2 per year. That is over five per cent of the transport CO2 emissions. That is more than the whole of the railways and you might say that costs us nothing, but it is a jolly difficult thing for politicians to decide that they have to do. I do think that we have a communication challenge still that needs to start everywhere, but also very much in our schools that says that we have to get a population that understands that some of these measures are going to be key and are actually very painless ways of reducing our CO2 and indeed, in that case, of improving our road safety.
Mr Archer: Some very good EU work shows that, unless we start to reduce demand for travel because transport demand is linked to GDP at the present time, by 2050 transport will occupy almost our entire EU CO2 cap even if we have got something like 20 per cent second generation biofuels, 30 per cent EVs and 30 per cent fuel cell vehicles, so we have to reduce demand for travel alongside introducing these technologies. We cannot expect that technology is going to be the whole solution here, and at the moment I feel that there is an expectation being placed upon the technologies which is not wholly realistic and that we have to have much more application of measures which reduce the need for travel, encourage people to choose those low-carbon modes and particularly to get businesses responsible for their transport emissions in the same way that they are responsible for their electricity or process emissions, and that is a step that has not been taken at all at the moment and needs to be started.
Paddy Tipping: Well, on that very challenging point, could we leave it there. Can I thank all three of you. You will notice from the discussion that the Committee would have liked to have talked more, and I am conscious that there are points that you wanted to raise and you have not had the opportunity to, so, as you are going back home or back to work on your environmentally friendly mode of transport, if there are things where you think, "I should have told them that", will you just drop us a note. Thank you all very much indeed. That was really helpful.
Memorandum submitted by Sustainable Aviation
Examination of Witnesses
Witnesses: Mr Roger Wiltshire, Secretary General, British Air Transport Association, Professor Ric Parker, Director of Research and Technology, Rolls-Royce plc, and Mr Ian Jopson, Head of Environmental and Community Affairs, NATS, Sustainable Aviation; and Mr Mark Brownrigg, Director General, and Mr Robert Ashdown, Head of Technical Affairs, Chamber of Shipping, gave evidence.
Q284 Paddy Tipping: You have heard some of the discussion and I think you will know some of the things we are going to pursue with you, but we have limited time. Perhaps I could start by saying that the aviation sector and the shipping sector have been perhaps, if I can put it like this, whipping boys for the darker, stronger green lobby. Is that a fair criticism?
Mr Wiltshire: Good morning and thank you very much indeed for inviting us. I am Roger Wiltshire from the British Air Transport Association, but here with colleagues from the Sustainable Aviation coalition. Yes, I think it is true that we have been unfairly criticised. I believe we have a reasonably good, in fact I believe we have a very proud record of improving our fuel efficiency over the last 40 years with some 70 per cent improvement in fuel efficiency over the last 40 years and we intend to continue that into the future. I hope today we can explain, or that we have done with our written submission, how we are going to go about doing that through technology and other means, and I believe we can make a very full contribution to the need to reduce climate impacts and improve the efficiency of transport without at the same time undermining the nations and the international ability for people to travel by air.
Q285 Paddy Tipping: And the shipping sector - an opening headline statement?
Mr Brownrigg: We acknowledge that we are emitters, strong emitters, albeit in proportion, and that we have to respond. We believe that we too have made significant progress over the years in terms of fuel efficiencies for good commercial reasons as well as other reasons and, as I say, we are prepared to look forward and work constructively with all parties.
Q286 Dr Turner: You all know about the Government's Green Stimulus scheme. It did not do much for your industries, did it? What would you have liked to have seen in that stimulus package for your industries?
Professor Parker: We did actually get some benefit from that. Lord Mandelson, at the beginning of the summer, announced a scheme for Rolls-Royce, Silhouette, which was £45 million towards research for low-emission engine technology. We would obviously like to see not just a one-off stimulus scheme, but a continued investment in the technology we need for the future to be able to deliver lower-carbon air transport, and there has been a significant increase in that since the Aerospace Innovation and Growth Team first reported in 2003. I should say I am also Chairman of the Aerospace Technology Steering Group that came out of that Aerospace Innovation and Growth Team. In those days, the Government's funding was limited to a scheme called CARAT, it was only £20 million a year and we are now up to about £70-80 million a year of support for industry to pull through these key technologies, but it does need to be still more. Whether that is under the heading of a low-carbon stimulus scheme, I actually hope it will be a more lasting and sustained investment in the UK industry over the next 20 years, not just a flash reaction to a recession.
Q287 Dr Turner: Mr Brownrigg, what is your answer from the point of view of the shipping industry? After all, shipping has only relatively recently started to come under the spotlight for its emissions and technologically, it seems, it is starting from a long way back compared with the aviation industry and aviation engines. What would you have liked to have seen done to promote greener shipping?
Mr Brownrigg: That is a different question from Green Stimulus packages; it is a broader question.
Q288 Paddy Tipping: Answer them both then.
Mr Brownrigg: No problem. I do not think we would accept your point about technology, and we can come on to that in whatever detail you wish, but fuel costs are in the order of 30-plus per cent of an operation for a shipping company and you can be sure that that, for very good, as I said earlier, commercial reasons, has been focused upon the importance of fuel efficiencies and reducing that bunker fuel budget cost line, so that is the starting point. In terms of the Green Stimulus packages themselves, as we understand it, that is essentially a national focus. We are not manufacturing, as you will have realised, we are shipping companies, so I can only speak from our viewpoint. We understand that that should have been a national focus and accept it. We do see a need for increased input into R&D for the future, but how that ties in between a balance of national and international engagement, I think, we have yet to bottom out.
Q289 Dr Turner: You also have the problem of poor air quality contributions from the shipping industry in the WHO Report. What are you doing to address that because there does not seem to have been that much progress?
Mr Brownrigg: Can I separate that out completely because I think one can talk about various pollutants as opposed to carbon emissions, and the IMO has adopted a very strong and firm timetable for the strong reduction of levels of sulphur and other pollutants from shipping emissions into the future.
Q290 Dr Turner: Yes, but so far there is very little impact given that, if you just take my own county, shipping emissions probably account for about 10,000 deaths a year because of respiratory illnesses related to shipping pollution because the world's busiest shipping lane is ten miles off the coast, so is there not a need for some urgency here?
Mr Brownrigg: I entirely accept that there is an urgent need to reduce pollutants, and I would remind you again that it is pollutants and not carbon, but in that context I think it is extremely difficult to separate out what comes from land-based sources and what comes from the sea. Leaving that to one side, as I say, the international community has acted strongly on this and there is a very firm timetable to reduce sulphur emissions both in the EU territories and also more broadly.
Q291 Dr Turner: What is the future of marine propulsion technology? Is the shipping industry going to continue to use the ultimate leavings of the refinery process which bunker fuel represents, or are you going to look for something cleaner?
Mr Ashdown: Our approach is to adopt a way forward which delivers the best net environmental benefit and, in order to do this, we need to balance the issue of pollutants with the issue of carbon. There was a move only two or three years ago when we were negotiating the international convention which deals with air pollution and the question was put very firmly, "Well, why doesn't the industry move to distillate fuels?", and a lot of research was done and the conclusion was that, by moving an individual ship to distillate fuels, it would improve its carbon burn by about three to four per cent, so there is a very minor improvement in carbon by burning distillate fuels as opposed to residual fuels. However, in order to deliver the additional distillate fuel stock needed for the global industry, they would now require a much greater refining intensity at the refineries with the result that the net carbon emissions would rise by about 10 to 15 per cent, so it was decided that an overnight move to distillate fuels would not strike the appropriate balance between the need to reduce pollutants and the need to reduce carbon.
Q292 Dr Turner: As a general question to both sectors, how do you see your role in a future low-carbon economy?
Mr Wiltshire: From the aviation point of view, we think it is very important that the role of aviation or the role of international air transport or international transport links is maintained, but the industry has to address its environmental impact and it has to do so responsibly. We recognised this some five years ago when we put Sustainable Aviation together and brought together all the good work that is going on in the industry and tried to promote not only that work, but also, going forward, what needs to be done, hence the support for a global sectoral arrangement for aviation as part of a post-Kyoto deal subsequent to the Copenhagen Summit, so we believe it is important not only for the technology that is developed, but for the economic and fiscal framework, if you like, to be right to encourage that technology to be brought through.
Mr Brownrigg: Our challenge is of course that shipping worldwide carries something like 80-plus per cent of world trade and it also, into this country and out of this country, carries something like 92 per cent, so, if you like, our ability to respond is very much linked to society's demands in terms of what it wants to see on its high street and what energy supplies it wishes to deliver to this country, so our starting point is that it is important that any legislator takes this into account and bears in mind the role that we play for the small amount that we emit, which is, according to the IMO's latest figures, between 2.7 and 3 per cent of manmade emissions, so you have got to put those figures together to see the challenge. What I would say is that, as we read it, we are by far, by a long way, the least carbon-emitting transport mode, ten times less than road and significantly less than our friends on my left, so we are willing to play our full part and we have engaged, as you have seen from our discussion paper, in a real way to address this issue, but it is important that we do not find that solutions that we face lead to transfer to other transport modes which would then turn the equation in the other direction.
Paddy Tipping: We will pursue those issues in a little while, Mr Brownrigg.
Q293 Mr Anderson: This is a social question. We have talked mainly about ships and planes, but what about the associate things? Is there any work being done in airports and ports and are you involved in that, about reducing their emissions and their pollutants?
Mr Ashdown: From the shipping side, obviously the ship-to-shore interface is an important part and yes, work is going on. A lot of our member companies are involved in something called 'virtual arrival' which changes the way that ships are forced to arrive in port in order to meet their charterer's requirements, so it allows you to set a virtual arrival time rather than a specific arrival time. This reduces port congestion and it also reduces the ship's speed en route to that port, all of which have a beneficial environmental impact. There are other opportunities out there, for instance, increasing port capacity in this country would reduce port congestion, again speeding up port turnaround times. That would be helpful and it would avoid wasted hours in the fairways to ports where of course ships are still burning their engines because they are effectively still out at sea, although waiting to come into port, so yes, the relationship between the port and the ship is an important element of reducing overall emissions.
Mr Brownrigg: Perhaps I could just add briefly to that to say that we are currently beginning to work in much greater closeness with the port sectors on a whole range of issues under a maritime services cluster, Maritime UK, and the environment, including emissions, is clearly one area of focus, but it is rather early days for that yet.
Mr Wiltshire: Aviation came together, as we did, five years ago, recognising the fact that airports, air traffic control and airlines need to work closely together, and perhaps, Ian, you can update us on that.
Mr Jopson: NATS, the
Q294 John
Robertson: Shipbuilding has a particularly bad name, and
I am sorry about that as it is the main employer in my constituency. They have a reputation of dumping at sea and
cleaning their oil tanks out at sea and basically large pollution, but
companies also register in tax havens to avoid, one, paying tax and, two, the
rules that we set them in the
Mr Brownrigg: I think there are a number of questions there. Firstly, there are strong international rules, and I do not acknowledge the perception that you put forward there; I think it is one that is in the past essentially now. There is a strong rule-set within the International Maritime Organisation which provides both for dumping at sea and for a whole range of standards for ships of all flags on the high seas and entering port, so, from the UK position, not only do we have control over our own fleet, but we have an ever-strong reputation for control as a port state for all ships coming through UK waters, and really I believe that these are standards which are current, constantly updated and are vibrantly implemented.
Q295 John Robertson: And the context internationally?
Mr Brownrigg: Well, that is how it
works. Port state control operates not
just in one country, but actually across the whole of
Q296 John
Robertson: Moving on to our colleagues on the aviation
side, as somebody who regularly flies from
Mr Wiltshire: An airport like Heathrow is so full that it effectively is having on the ground and in the air some congestion, especially at peak times, in order to make maximum use of very limited runways.
Q297 John Robertson: Excuse me, but this is not a motorway, this is in the air, and the pollutants are coming out of these planes all the time. I have got to say, you know this is going to happen and you can plan for it because it happens every single day, so why do you allow it to happen?
Mr Wiltshire: Perhaps Ian can explain why that is necessary in order to make maximum use of the two runways.
Mr Jopson: The practice that you refer to of stacking is airborne holding which, in particular, in this example of Heathrow, as Roger pointed out, is because the runways are operating at maximum capacity and we need to have a reservoir of aircraft to ensure that we service those runways in the most safe and efficient way to get as many movements on to the runways as possible, but we do realise that there are significant inefficiencies in that method of operation.
Q298 Paddy Tipping: And carbon emissions.
Mr Jopson: Absolutely, and we are able now to quantify those because we have developed tools to quantify the strength of those emissions in our system, so we are aware of that and we are putting tools in place to try and reduce the amount of stacking. We currently have, what we call, an 'inbound speed trial' which is really trying to slow aircraft en route to the hold, to slow them down so that we can reduce the time they spend in the hold. We have also recently introduced an aircraft control tool called 'A-man', an arrivals manager, which allows us to better sequence the aircraft in order to get them through that holding situation and on to the ground as safely and as efficiently as possible and, as a result, reduce carbon emissions.
Paddy Tipping: What we are going to do is focus a little bit on aviation, then on shipping and then in the final session we will talk about international agreements and international frameworks.
Q299 Charles
Hendry: I am still trying to get my head round the
concept of a reservoir of aircraft! How
many domestic flights are there within the
Mr Wiltshire: I don't have anything
absolutely, but I know that domestic flights amount to something well less than
ten per cent of the total emissions from so-called
Q300 Charles Hendry: Would a figure of 100,000 be reasonable?
Mr Wiltshire: That may be the figure, yes. We know that, of the routings within the UK, some 80 per cent are either over water or to places the high-speed rail is not due to touch or that the high-speed rail plan touches, and that accounts for 60 per cent of the passengers on domestic routes, so some 40 per cent, if you like, of passengers on domestic flights are exposed to the possibility of an alternative through high-speed rail. Having said that, there are certain routes, high-density domestic routes, such as Manchester to Heathrow and Glasgow, Edinburgh and others, where a large percentage of those passengers are actually wishing to travel somewhere else not in the UK and their objective is not London, it is to some other part of the world and they are changing planes at Heathrow, and these passengers, in order to move to rail, would require a well-integrated, smooth operation of the rail service into the airport. Now, we support a good, integrated transport system in the UK which could include rail and bring air and rail together, and we very much support that, but we do recognise the limited amount of substitutability areas between rail and air into the future, and we note that in many other countries of the world which have very good high-speed rail systems, such as Japan, Germany and France, they still retain strong domestic air routes between their major cities.
Q301 Sir Robert Smith: But, if you fly Lufthansa, the inflight map includes the rail high-speed network as part of the network.
Mr Wiltshire: That is a classic example of, what I call, 'integrated transport' where that could be an opportunity if the rail and the air services are brought together so that you have a railway system underneath the airport. Now, at Heathrow we already have tunnels underneath Heathrow delivering rail services, albeit limited numbers of rail services, just to central London and there is an opportunity to go and cover a greater swathe of the South East very soon if people support the air traffic proposal, and we would support the integration of the rail network to a much larger part of the UK from Heathrow.
Q302 Charles Hendry: Is it true that there are some planes, some flights which take off with either no passengers or virtually no passengers on board simply to preserve landing slots, and is it an absurdity that we have a system which allows that?
Mr Wiltshire: If there are, then I know of none at the moment. If there are, then it is perverse and it is wrong. It points to the need for greater capacity, I think, in airports in the South East if airlines are doing that. As far as I know, that is not taking place at the moment, but there are other inefficiencies on the ground caused by a lack of runway capacity which we are addressing in the absence of mixed mode which at Heathrow would have allowed us the opportunity to significantly reduce the airborne holding that Ian has talked about and it would significantly reduce the congestion on the ground.
Mr Jopson: Just to come back on your question about domestic air traffic, our calculations show that domestic air traffic represents around about a fifth of the 2.4 or so million movements that we handle as NATS in the UK every year, but that actually only accounts for 14 per cent of the CO2 emitted in the system, so those flights are operated by relatively efficient twin-engine aircraft, so their emissions are less than the proportion of the traffic, if you see what I mean.
Q303 Charles Hendry: They are shorter, so would you not expect the emissions to be less?
Mr Jopson: To some extent, yes.
Q304 Sir Robert Smith: Although take-off and landing, is that not a big part of the emissions?
Mr Jopson: The vertical profiles for the take-off and landing is an important part and, in particular, the departure in fact where 40 per cent of all the emissions in the UK airspace system is emitted by aircraft in departure, so that is why we are looking very closely at how we get those climb profiles as smooth as they possibly can be to reduce those emissions. What we do find in terms of our system performance is that, when we have control of the aircraft throughout their flight, then we can deliver those profiles that are as smooth and as energy-efficient and as CO2-efficient as possible.
Professor Parker: Although it is 14 per cent of CO2 in our local airspace, if you look at the total CO2 impact of flights originating from, and coming to, the UK, it is a minute percentage that is UK domestic travel, much less than five per cent, so it is important to think outside this little UK box and creating a few CO2 molecules around the UK, but it is where these flights finish up and where then does the CO2 finish up.
Q305 Sir Robert Smith: Your own analysis indicates that we can return by 2050 to 2000 levels after reaching a peak at 2020. As you have already indicated, the industry has been driven to be efficient. It is a low-margin industry where fuel is a big part, so, even without any environmental impacts, the incentive has been there to be efficient. Following on from John's question, quite often we sit on the ground in Aberdeen because you know we are not going to be able to land at Heathrow, so you do not let us take off, which obviously becomes a more efficient way. Given all that, what government policy is needed to actually achieve what you think can be achieved by 2050?
Professor Parker: The particular graph in the
pack we have sent you looks at the impact of technologies and the impact of
biofuel over that period, so it does not take into account any impacts of
carbon trading or anything else, but it is purely how much more efficient could
aircraft be over that time. Government
does have a strong role to play in that, as I said earlier. I think that government partnership with
industry both at the European level and at the
Q306 Sir Robert Smith: You may have touched on this in suggesting that your graph is just purely to do with what could happen with engine efficiency because IATA members, of which most of you are members at the moment, are committed to zero emissions by 2050.
Professor Parker: There is a figure of 50 per cent net by 2050 relative to 2000, ie, half of what is on the graph, so half of the benefit on the graph will come from technology and biofuels and, if you want to get below 2020 levels, ie, down to 50 per cent of 2020 levels, then the rest has to come from incentives, such as carbon trading, and it will not come out of pure technology and pure aircraft systems.
Paddy Tipping: Let us focus on the shipping sector now.
Q307 Dr Turner: In recent times, shipping has started to adopt various measures which should help to reduce emissions, like engine improvements, fleet management techniques, cold-ironing and reducing steaming speeds. What level of emissions reduction do you think these can achieve when they are fully operated?
Mr Ashdown: I think the first point to make here is that all of these technologies that you have alluded to do exist and can be implemented, but the nature of the industry means quite often that the person who has control over the application of those methods might not necessarily be the shipowner, it could well be the charterer, so, for instance, steaming speed, route, et cetera, is entirely in the hands of the charterer rather than the shipowner, and that is an important point about the motivational factors which would drive companies to use these technologies. To answer the question directly, industry assessment is that these existing technologies rolled out to their maximum might yield an improvement generally of between about 15 and 25 per cent. Of course, it depends what you take as your baseline ship and that will not be on a ship built last year, but on a ship, say, delivered in the mid-1990s that would be the percentage that we would see.
Q308 Sir Robert Smith: That is a saving well worth having.
Mr Ashdown: Indeed.
Q309 Sir Robert Smith: How effective are the means of cajoling or enforcement of the use of these technologies? Is there anything more we can do by way of regulation, for instance, to insist that these technologies might be used to the maximum?
Mr Ashdown: Yes, I think that the International Maritime Organisation is doing some very useful work here in this area because another difficulty with delivering these new technologies for new ships, especially when the economy is growing strongly, is that shipowners find it very difficult to go and buy the most efficient ships because the shipyards hold the whip-hand and they will build a ship which is most convenient for their production platforms, so you may be allowed to choose the colour, but little else, so it is very important that we incentivise the shipbuilders to deliver the most efficient ships. The way that the IMO is addressing this is through something called the 'energy efficiency design index' which is mandating new standards for every new ship to be built to. We were very much hoping, from an industry perspective, that that would be a mandatory requirement, but at present, because of the sensitivity of international negotiations around carbon, some of the nation states of the IMO have held that back and it is just voluntary at the moment, but I would not be surprised if that was made mandatory within the next sort of six to 12 months.
Q310 Sir Robert Smith: What scope do you see for the future application of other technologies, and wind power is a particularly promising one for routes going through the trade winds and so on, and other forms of power, nuclear possibly, hydrogen, electric propulsion and so?
Mr Ashdown: Well, all of these technologies are at a prototype stage for land-based sources, let alone ships, and I think it is fair to say that in almost all of these instances these should be viewed upon as supplementary power sources rather than as the prime power mover. I do not think that you would ever wish to go back to a situation where you had a VLCC powered solely by the wind and we are always going to need the main engine there for when the wind stops blowing or for when it blows in the wrong direction perhaps, so these are very much supplementary power sources and the question is: how can they be used most efficiently? We have seen some interesting trials of sea kites, and the difficulty there is again they are fairly useful where the trade winds can blow, and we have seen some interesting research being done, but they are less useful in congested traffic zones certainly around northern European waters because of course the ship needs a degree of manoeuvrability. I think the point with all of these technologies is that we welcome them, we are looking at them, but they need to be proven and robust before they are likely to be rolled out across the fleet.
Q311 Sir Robert Smith: I have a company that does ship-routing from my constituency and it does seem that efficient routing of a ship does offer quite a lot of improvements in weather management and that sort of thing, but yet there seemed to be some frustration that people even now are still not fully sold on the benefits.
Mr Brownrigg: Well, again this will come through to the bottom line of bunker consumption ultimately, so, if you are in control of those elements of the operation, and Robert has already mentioned that you may not be because it may be the charterer who is, if you are, then you will be maximising what you can, but there is significant scope for improving.
Q312 Sir Robert Smith: We do a lot of freight transfer north-south in this country, so is there more scope or are there any incentives or anything holding back using more coastal routes of shipping which actually reduces the emissions from road transport?
Mr Brownrigg: Only the commercial viability of this. There are initiatives which promote shipping on the short sea routes, whether it be around our coast or indeed from the near continent, to take cargoes off the road in particular, and we entirely support those and we would hope that the Government would continue to do so.
Q313 Dr
Whitehead: Firstly to Mark Brownrigg and Robert Ashdown,
you have mentioned in your report on capping and trading to reduce carbon emissions
from international shipping that the most important outcome of
Mr Brownrigg: I think we have to be
realistic as to how much airtime shipping is going to have in
Q314 Dr
Whitehead: Although certainly the amount of airtime, as
you say, will not be enormous, nevertheless, assuming there is a reasonable
deal at
Mr Brownrigg: Well, we entirely, as I said, accept that shipping should be in certainly for measurement purposes from now on. How prepared are we? I think the IMO is beginning to put itself in a position to carry this work forward with despatch and with depth of consideration. It has set itself a programme of work, if that is allowed by the UNFCCC decisions, which will take it through next year to a decision in 2011 on the precise way forward, but, in order for that to be achieved, it is intending to look at the various options for economic or market-based solutions as from March through the middle of next year, so I think both the industry and the IMO, as the regulatory body, are prepared for this debate and increasingly so. Of course, we do have alongside that process the position of the EU. The EU is being very responsible and awaiting the outcome at the worldwide international level, which is quite correct, but it will require the IMO and the industry to have met that timetable of 2011 if the EU is not to go it alone.
Mr Wiltshire: From an aviation point of view, we sent you this week the joint industry submission to the International Civil Aviation Organisation's high-level meeting a week or so ago, which was a fairly detailed proposal for the way in which aviation should be dealt with, a global sectoral arrangement for aviation to ensure it is part of the post-Kyoto structure. That proposal was not accepted in full by the ICAO, which, as you know, is a state-representative organisation. The developing world, in particular, objected to them being dragged into a detailed proposal for aviation in advance of the discussions at Copenhagen, and I think I agree very much with what Mark has just said, that both maritime and aviation will probably not get much airtime at Copenhagen. It is pretty clear to us that the world needs to decide what the global structure is for climate change, full stop, to start with and then we believe in aviation that we have a readymade proposal from the industry ready for the ICAO to take its responsibilities in this area, but, first of all, we need a global, if you like, deal on climate change itself.
Q315 Dr Whitehead: Assuming that those two events happen and that your industries are both reasonably geared up to react positively, what do you think the impact on prices is then going to be in terms of passenger travel and, in the case of the shipping industry, in terms of box costs, bulk transport costs and what-have-you?
Mr Wiltshire: Aviation, as you know already, we are due to be part of the European Emissions Trading Scheme from 2012 and we are already aware of these issues. We know that there will be a carbon premium added to the price of the fuel that actually we are burning and that adds greater emphasis to the need for more fuel efficiency. What impact it will have on prices will obviously depend on the carbon price and on the way in which we can improve efficiency within the industry. It is a very competitive industry that we operate in and others will be trying to make themselves more efficient both in terms of fuel use and in terms of the carbon premium that they recognise they will be paying in the future.
Mr Brownrigg: Perhaps I may just say that we too in the maritime context have felt the winds of politics quite strongly within the IMO in the last year when we have been discussing this because of Copenhagen lying ahead, so the major emerging economies have not been willing to enter the debate at all during that period, so the IMO timetable is distinctly predicated on that being loosened. In terms of costing, this is very difficult to know because there are two systems that are being considered and basically one is a straight tax arrangement, and no one knows at what level that might be set, and the other one is cap and trade, which no doubt we will come on to look at in more detail. Equally, no one knows, if we go down cap and trade, how an individual company will react to that and the degree to which they will be able to manage their own costs. We have done some initial work on costs, and I will ask Robert to explain that.
Mr Ashdown: If you look at today's figures where a tonne of carbon is roughly €13.5 and where bulk prices are $450 per tonne and if you took a mythical shipping company running, say, five very large crude carriers, then there would be about a 6.5 per cent increase on the fuel costs to pay the carbon, so that gives you some indication. Of course, going forward, we expect the fuel price to rise into the future and we also expect the carbon price to rise, and the degree to which they rise in parallel will determine the percentage increase on the cost of the fuel.
Q316 Paddy Tipping: Could you just talk to me for a minute about the relationship between price and demand management. It is something that the aviation sector has done some work on, but, in order to have some real effect, you need some fairly steep increases in prices.
Mr Wiltshire: I do not have any figures with me, but I will do research, if you wish, on this. All I can say in general is that people normally travel somewhere to meet somebody or to do something and the actual air journey is a means to an end, so they will be taking, I presume, a price decision based on the total, if you like, trip cost which might include accommodation, meals, et cetera, as well as the actual journey. Certainly, different types of reason for travel have different, what companies call, 'elasticities of demand' and IATA, I know, do have some figures for this and, if you are interested in that, we will provide for you what is available in the public domain.
Q317 Paddy Tipping: That would be very helpful if you could let us have that, but it seems to me that we all are aspirational and we want to travel in many ways and we ought not to restrict people, but clearly we are going to have to reduce carbon emissions and a steep increase in price may be one way of doing it.
Mr Wiltshire: We certainly believe, and we have done ever since we got together as Sustainable Aviation, that the right way forward economically is the measure of cap and trade where the industry's emissions are capped within an international, preferably, and, even more preferably, a global arrangement. You will be paying for carbon and any increase in activity and in demand will require an equal reduction in carbon emissions elsewhere within a capped process, so you are ensuring the environmental outcome, but the price may well go up, but that is one of those things we have to deal with. We accept that that is the best route forward, but we also accept that it is the best route forward not just for our industry, but for the world getting its carbon emissions down in the most cost-effective way, in other words, to ensure that, wherever the carbon is being paid for, we are finding the lowest angle of route at any point in time.
Q318 Paddy Tipping: Mr Whitehead was asking you about the discussions about cap and trade. It is hard to see into the future and, if we could see into the future, we would all be wiser people, but when do you think a robust cap and trade system might be introduced in both sectors? What is your best estimate?
Mr Wiltshire: Well, all we can do is reflect on the European arrangement for aviation in 2012 which is that the cap is at 2004/05 levels, the emissions will be capped at that level, and aviation will be able to have access to some other carbon markets. We believe it is important that aviation and other sectors get full access to all carbon markets around the world to ensure that again we get the most efficient way forward on climate change generally.
Q319 Paddy Tipping: And in shipping?
Mr Brownrigg: We are, as you have seen, an
advocate of cap and trade. We believe it
can work. We have looked particularly at
the experience in the
Q320 Dr Whitehead: I wonder if I could just clarify a little your suggestion on cap and trade. The suggestion, as far as shipping is concerned, as far as I understand it, is that at the point of bunkering essentially a credit would be handed over presumably on a worldwide basis. Would you consider in the shipping industry that it would be relatively easy or possible to remove, shall we say, rogue bunkering around the world, that is, shipping disappearing off to a place which is not regulated and taking on essentially illegal bunkering? Assuming it would be possible, would you be certain that under those circumstances the logistics of actually keeping the ships going around the world could be reliably achieved?
Mr Brownrigg: At the moment there are relatively few bunkering centres. Of course, you can get bunkers anywhere but the major ones are relatively few. There is this system called the bunker delivery note which is already up and running and can be used, and indeed is advocated by all the different options that are under consideration, whether it be a levy/compensation fund or whether it be trading and that is a system that is well-monitored and well-covered. We believe that that is the way to approach it and whether you buy your credits ahead of time or as you go it is an option that is out there for discussion at the present time. As for the nature of rogue bunkers or bunker suppliers or the possibility of displacement to potential rogue centres, I do not know if you have something to say.
Mr Ashdown: This is an area that has given us concern because of course as responsible operators it in no way benefits us to have a system that permits people to gain the system. There are methods by which you can eliminate that risk, certainly for those ships which may trade into countries which are signatory states to any agreement that has been developed. What is less easy to control or perhaps could not be controlled is the very limited trade that takes place between two non‑signatory parties. We would never capture that direct trade and that would have to be let go, but certainly any ship that ever wished to trade into an Annex 1 country or non‑Annex 1 country that had signed up to the agreement would be caught. It is probably worth bearing in mind that once you have the US, Europe and Japan in any scheme then you have captured roughly 80 per cent of world trade.
Paddy Tipping: Thank you for all the information you have given us. Mr Wiltshire, you are going to drop us a note about prices and that will be very helpful. Thank you for keeping us to time. This is a big issue and I did not think we were going to meet our time constraints. Thank you all very much.