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Mr. Willis: My hon. Friend makes an incredibly powerful and important point about the juxtaposition of UK law and European law. In the debate on the Constitutional Reform and Governance Bill earlier this week, the Conservative Front-Bench team proposed an amendment that, following a Conservative Government coming to power in May, any future change in competence in terms of European law would result in a referendum in the UK. That is their position. In that debate I sought a cast-iron guarantee; to be fair, the Conservative spokesman gave a cast-iron guarantee.
The Chairman: Order. I remind you that this is an intervention, not a speech.
Mr. Willis: I apologise, Mr. Atkinson. It is a very important point. Does my hon. Friend agree that in those circumstances, not only may we have a challenge in the European Court over this, which could take three to five years, but we may also have a referendum in the UK, which could put back the whole process for a decade?
Simon Hughes: I agree. Although I was not in the Chamber, I was able to see my hon. Friend’s intervention as I followed that part of the debate. I am keen to persuade the Government of what needs to be done on this issue. We need to amend the Energy Bill, because it is the last opportunity, to include a clause providing for emissions performance standards. That is consistent with the Government view and with what the Under-Secretary indicated might be possible when he replied to my right hon. Friend the Member for Ross, Skye and Lochaber in July. It is consistent with statements made by the Secretary of State and the Minister of State, both in the House and written answers. If we put into the Bill an emissions performance standard amendment or new clause, we would take the initiative and then it would be up to the European Commission if it wanted to take us on. We would get on with that and the matter would be resolved speedily, and not hang over everybody’s head as an unresolved matter in the way that my hon. Friend indicates.
Our view, on these benches, is that new clause 1 is the only new clause exactly in line with what the Committee on Climate Change has recommended. I defer to its wisdom and expertise, as it is the best source of guidance in the UK and was specifically set up, with all-party agreement, to provide that guidance.
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We have an opportunity for the Government to show, not only in Council of Ministers meetings in Spain, as that one was, or elsewhere, but also at home in their legislative programme, that they are determined to do something about carbon emissions. If we want the coal industry to thrive, and to let investors know what to expect in the future and to have a proper lead-time for investment planners, financiers and others to know what they are working towards, we need to tell them the score by the time that the Bill is on the statute book.
I hope that we will continue to take the lead after a disappointing conference in Copenhagen. I know that Ministers want to be in the lead position. Here is an opportunity for us to take political responsibility. If we do not amend the Bill, either in Committee or on Report, and introduce emissions performance standards, I fear that we will once more be accused of letting the public down and ducking a difficult decision. We are happy to work on the wording; we are not precious about it. I know the difficulties. I am clear that if we are in government, or sharing government, after the election, we will be promoting the measure and will come back to the issue with the objective of introducing emissions performance standards. That is our aspiration. However, it is always better to grasp the opportunity when it presents itself. We have a Bill; now is the opportunity and I urge the Government to take it.
Charles Hendry: We should start by recognising that most people in this room are keen to have an emissions performance standard. Some aspects of the hon. Gentleman’s speech were almost seeking to divide us into different categories, but, overwhelmingly, what binds us together is the desire to see an emissions performance standard introduced and formulated in a way that is right for Britain. That is his party’s policy and my party’s policy, and Back Benchers share that desire, as, I suspect from her comments and the campaigns that she has run, does the Minister of State, even if she cannot elucidate those views as openly as she might wish.
The background to the new clauses is that we all recognise that new coal plant must have carbon capture fitted to it from the outset and that if we are to secure the investment that we want in clean coal, investors need to know the framework under which they investing. An emissions performance standard is not only an environmental issue but an investment issue. It sets the framework within which company boards can say, “We understand what is expected of us and what we need to do to meet deadlines to comply with the law”. This, therefore, is a positive measure and will facilitate new investment if formulated in the right way.
Emissions from a coal-fired power station without carbon capture are around 900 grams of CO2 per kilowatt-hour, which is much higher than the emissions from a gas plant. If carbon capture and storage is introduced on one quarter of the plant, it will bring emissions down to 650-700 grams of CO2 per kilowatt-hour and can bring it down dramatically over time.
I am concerned with the absolutist nature of new clause 1. It says that
“new coal fired power stations will produce no carbon emissions from 2020.”
First, there is a debate about what is meant by “new”. Does that mean plant built from 2020 or plant built from when the Bill comes into force, which is what the new clause refers to? There is potentially a retrospective element, which companies might find hard to accommodate.
There is, however, also a practical consideration. The goal of producing no emissions whatever will be almost unattainable. The people with the greatest expertise to whom I have spoken say that a plant with 100 per cent. carbon capture and storage on a post-combustion basis would probably get its emissions down to about 50 grams per kilowatt-hour and perhaps slightly less, but it would certainly not be zero.
There will also be times when the emissions are higher. For example, about a third of the output of a plant will be needed to run the CCS facility. There will be a period when the plant is starting up and it does not have the power available to run the CCS facility. In those opening hours, there will be high levels of emissions until the plant is running at full capacity. Under the proposals made by the hon. Member for North Southwark and Bermondsey that would be illegal.
There will also be periods when, because of a very tight winter situation, we will need every element of our generating capacity to work at full tilt. For that period, and looking at the issue in terms of trying to control emissions on an annual basis, there would be a case for saying, “We don’t want you to run your CCS for a few hours, because we need the extra capacity to keep the lights on.” Under the new clause, however, that would be illegal, and the lights would have to go off, because the CCS facilities would have to be working at all times to capture 100 per cent. of emissions.
There are therefore practical issues that create a fundamental flaw, even though I agree with the direction of travel. One has to imagine what will happen in boardrooms in Essen, Spain and elsewhere, when executives sit down to decide whether they want to invest in new clean-coal plant in Britain. They will wonder whether they can, realistically, be absolutely certain that they will be able to capture all the emissions within a decade. They will say, “We don’t believe we can commit to that yet, because the technology is not in place.” When we have an urgent need for new investment in new capacity, the boards of companies based overseas will say that there are better opportunities elsewhere and they will turn their minds away from the UK.
That is why it is better to go for a permissive approach that gives the Secretary of State powers to introduce an emissions performance standard. That should be based on the science and on discussions with business and industry so that we understand what is realistic from their perspective. We do not want to kill the goose that lays the golden eggs.
Our new clause 2 is the best proposal because it is the loosest, and the direction of travel is clear. My colleagues and I have committed ourselves to introducing an emissions performance standard if we are given the chance to do so, but the detail should be finalised based on the science and the industrial evidence. If that is not acceptable, we are willing to look at the new clause tabled by a number of Labour Back Benchers, but for the reasons that I have set out the hon. Gentleman’s new clause for the Liberal Democrats cannot balance our climate change and security of supply objectives.
Mr. Mike Weir (Angus) (SNP): I do not want to repeat what has been said, but I want to make a few brief points. In the Bill, we are setting up the levy, which will put a considerable amount of money into CCS. It will be reasonable for those who pay the bill to know what they are getting for their money and that there will be a reduction in emissions.
The Government’s framework for the development of coal says that they wish to see all new coal-fired plants fitted with 100 per cent. carbon capture and storage by 2025, but they have accepted that measures could be introduced in the 2020s to address the issue of emissions from new coal plants should there be difficulties with the technology. The difficulty is that if we have new coal plants in the meantime that are not fitted with CCS, the Government could come under great pressure to back off from the emissions standard at that time, for the simple reason that we could end up losing those plants and having a gap in electricity supplies. I think we need to be careful of that, and to address that matter now by making it clear that there will be an emissions standard that companies will have to adhere to.
I also draw attention to what I think is a slight disconnect. We talked about the proposals for gas CCS. The provisions of the national planning statement relating to large combustion plants states that any new plant must be carbon capture ready, and the company must be sure of the technical feasibility of retrofitting the chosen carbon capture technology. If not, the Infrastructure Planning Commission must refuse planning permission for that plant. I very much doubt if anyone is going to come forward with a large coal plant until such time as CCS has been proven to work; obviously, that is the reason behind the demonstrations—to show that it will work. It is interesting that although the Government were prepared to grant the new plant, for example, at Kingsnorth, with only 20 per cent. of CCS, E.ON pulled back. As a matter of interest, a similar thing happened at Hunterston with DONG Energy, which is an indication of the potential difficulty. It therefore seems that companies will, in the first instance, be unwilling to commit to building new coal plants until they are sure that CCS is coming online. It also seems that there will be a hiatus in new coal plants as a result. Having said that, it is important that we deal with the matter.
I will support the principle of the ETS. I am also happy enough to support the new clause tabled by the hon. Member for North Southwark and Bermondsey, but I personally prefer new clause 5, which is a more reasonable way to approach the matter and takes into account the science as it develops along the way.
Mr. Willis: I do not want to repeat the points that have been quite excellently made by the hon. Member for Angus, and indeed, by my hon. Friend the Member for North Southwark and Bermondsey in tabling the new clause.
The hon. Member for Wealden makes a very valid point about the new clause. There is clearly room for negotiation on that clause—he is absolutely right in that. Not only in this Committee, but across most of the House, there is a commitment to see an ETS scheme of some sort in the Bill, as a clear statement of intent by this Government to carry forward into the future.
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The Minister of State, Department of Energy and Climate Change (Joan Ruddock): The hon. Gentleman says that there is room for negotiation on the new clause, but he and his colleagues tabled it specifically to state that there should be no emissions. He knows, as I do, that the best technology that we anticipate would enable us to reduce emissions to 90 per cent. of what they would be if there was not carbon capture and storage.
Mr. Willis: I take the rebuke from the hon. Lady, who is passionately committed to much of what we are trying to do. It is the duty of the Opposition, when we are examining and scrutinising a Bill, to take up positions to allow the Committee to debate the extent to which we are able to legislate. That is what we should be doing. The Government do not always get it right. Neither do the Opposition parties, but we are humble enough to accept that, even if the hon. Lady is not. [Interruption.] We are making huge progress; perhaps the Prime Minister will learn from that example—or is that too much to ask?
The hon. Member for Wealden makes the point that having a plant running with zero carbon would open up all sorts of different issues. We accept that point and, in view of the comments that the Minister is about to make, we will be happy if new proposals are brought forward on Report.
I wish to address the issue that the hon. Member for Northampton, South, raised. He will expect me to speak on that subject, as it goes to the heart of the matter. This is the first time that I have been a member of the same Committee as him. He seems to be an incredibly reasonable man; I am rather sad to see him in the climate change denial group.
Mr. Binley: I am not a denier. I am simply saying that we need to be as sure as we can be before we proceed to lock in such regulations. That is all that I am arguing for. That seems eminently sensible to me.
The Chairman: Order. Before the hon. Member for Harrogate and Knaresborough replies to that intervention, may I say that, now that he has made his position clear, we do not want a debate on climate change at this stage? We have a lot of new clauses to get through in a rather short time. I know that it is tempting to comment on the subject, but I would be grateful if the Committee were to stick more closely to the new clause.
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