The
Committee consisted of the following
Members:
Chair:
Dr
William McCrea
†
Anderson,
Mr David (Blaydon)
(Lab)
†
Bagshawe,
Ms Louise (Corby)
(Con)
Cairns,
David (Inverclyde)
(Lab)
†
Chishti,
Rehman (Gillingham and Rainham)
(Con)
†
Donaldson,
Mr Jeffrey M. (Lagan Valley)
(DUP)
Glindon,
Mrs Mary (North Tyneside)
(Lab)
†
Hemming,
John (Birmingham, Yardley)
(LD)
†
Hendry,
Charles (Minister of State, Department of Energy and Climate
Change)
†
Irranca-Davies,
Huw (Ogmore) (Lab)
†
Jones,
Mr Marcus (Nuneaton)
(Con)
McGovern,
Alison (Wirral South)
(Lab)
†
Menzies,
Mark (Fylde) (Con)
†
Munt,
Tessa (Wells) (LD)
†
Opperman,
Guy (Hexham) (Con)
†
Ruddock,
Joan (Lewisham, Deptford)
(Lab)
†
Sharma,
Mr Virendra (Ealing, Southall)
(Lab)
†
Vara,
Mr Shailesh (North West Cambridgeshire)
(Con)
†
Williamson,
Gavin (South Staffordshire)
(Con)
Alison Groves, Committee
Clerk
† attended the
Committee
Fifth
Delegated Legislation
Committee
Wednesday 16
March
2011
[Dr
William McCrea
in the
Chair]
Draft
Renewables Obligation (Amendment) Order
2011
2.30
pm
The
Minister of State, Department of Energy and Climate Change (Charles
Hendry):
I beg to
move,
That
the Committee has considered the draft Renewables Obligation
(Amendment) Order
2011.
It
is a great pleasure to serve under your chairmanship, Dr McCrea. The
renewables obligation is the Government’s main mechanism for
supporting renewable electricity generation in the United Kingdom. The
obligation has previously been the subject of significant
change—in particular, with the introduction of banding of
support for different technologies in 2009. The changes that I am
putting before the Committee today are less radical. They are about
ensuring that the RO continues to drive forward renewable electricity
deployment through changes to introduce phased support for offshore
wind. They are also intended to protect the environment and ensure that
our fuels come from sustainable sources. We propose to do that by
introducing minimum sustainability requirements for bioliquids in line
with the 2009 European renewable energy directive. We are also building
on existing voluntary sustainability criteria for biomass by
introducing mandatory reporting in April
2011.
The
changes to the RO are being made in the context of the
Government’s wider electricity market reform, which is intended
to put in place the right framework to support the delivery of a
secure, low-carbon, affordable electricity mix for the 2020s and
beyond. Reform of the market is aimed at putting in place the right
long-term signals to facilitate cost-effective investment in all forms
of low-carbon generation, while maintaining security of supply. We are
looking right across the electricity market. That includes reviewing
the roles that a carbon price, an emissions performance standard, a
revised RO, feed-in tariffs, capacity mechanisms and other
interventions should play in achieving our goals. The 12-week
consultation closed on 10 March, and final recommendations will be made
in a White Paper later this
year.
In
the context of those longer-term plans for change, we are committed to
protecting existing investments currently benefiting from the RO and we
will seek to ensure that the RO works as efficiently as possible to
minimise costs to consumers and to increase deployment of renewable
energy
technologies.
The
order introduces changes in three main areas: first, the introduction
of arrangements for phased support for offshore wind; secondly, the
implementation of mandatory European standards for bioliquid
sustainability; and thirdly, the introduction of mandatory domestic
requirements for biomass sustainability reporting.
Since
introducing the maximum 20-year limit on support under the RO, we have
become aware that offshore wind projects face particular disadvantages
in accessing the intended maximum 20 years of support due to the large
size of projects and the long construction periods that can be subject
to seasonal restrictions. The intended 20-year support limit currently
begins at the point of accreditation of a project. However, that
disadvantages large offshore wind projects that may wish to accredit
when the first turbines are installed in order to secure a renewables
obligation certificate income stream. If, for example, construction
takes place over three years, the last turbines installed may receive a
maximum of only 17 years’ support, subject to the 2037 end-date
of the
RO.
We
therefore intend to introduce phased support for offshore wind
generators accrediting after 31 March 2011. Offshore wind
generators will be able to register up to five phases of turbines over
a maximum of five years. At least 20% of the total capacity of the
generating station will be required to be registered in the first
phase. Introduction of phased support for offshore wind will ensure
that those projects have the opportunity to access support for up to
the maximum of 20
years.
The
other changes that we are making are about ensuring that bioliquid and
biomass fuels used in our renewable electricity production come from
sustainable sources. We are introducing minimum sustainability
standards for bioliquids in line with our obligation to transpose
mandatory sustainability standards for bioliquids in the 2009 European
renewable energy directive. Eligibility for receipt of ROCs for
electricity generated from bioliquids will depend on a demonstration
that the sustainability criteria set out in the directive have been
met.
We
will open up the RO to bioliquids partially derived from fossil fuel
such as fatty acid methyl ester—known as FAME—as required
by the directive. ROCs will be awarded on the biomass portion of its
energy content. The new rules will require generators using bioliquids
to provide evidence to Ofgem demonstrating that the bioliquid complies
with sustainability criteria when applying for ROCs. An independent
audit report to be provided to Ofgem by 31 May following the obligation
period will verify
that.
The
Government recognise the important role that biomass fuel will play in
the UK meeting its renewable energy directive target of 15% renewables
by 2020. About 30% of our overall target could come from biomass power
and heat, which means that it is essential that we take action to
ensure the biomass we use is sustainable. Therefore, we are introducing
the following sustainability criteria for the use of solid biomass and
biogas for electricity generation: first, a minimum 60%
greenhouse gas emission saving for electricity generation using solid
biomass or biogas relative to fossil fuel; and, secondly, general
restrictions on using materials sourced from land with high
biodiversity value or high carbon
stock.
Mandatory
reporting against the sustainability criteria will start in April 2011
for generators over 50 kW. In April 2013, eligibility for biomass and
biogas to receive support under the RO will be linked to meeting the
criteria, following a transition period. The transition period allows
generators two years to familiarise themselves with the sustainability
criteria and reporting process before the criteria are directly linked
to the award of
ROCs. In addition, to ensure the scheme is efficient and effective, and
does not introduce unnecessary administrative burdens, generators below
1 MWe will be excluded from the scope of the full scheme and the
sustainability criteria will not apply to the use of biomass or biogas
made from waste, landfill gas or sewage
gas.
The
changes that I have set out today apply to the RO for England
and Wales. There are separate but complimentary obligations for
Scotland and Northern Ireland. RO policy in Scotland and Northern
Ireland is devolved, but colleagues there have advised that they intend
to make changes to their obligations similar to those I have set out
today.
I
can confirm that the changes before the Committee have been through the
European state aids approval process, and I am pleased to say that
clearance was given in early February. I hope that my hon. Friends and
Opposition Members agree that the changes we introduce today to phase
support for offshore wind and on sustainability criteria for biofuels
are necessary, and are an important progression in the effectiveness of
the RO. They will allow us to increase our renewables generation while
ensuring that our environment is
protected.
2.37
pm
Huw
Irranca-Davies (Ogmore) (Lab):
I also regard it as a
pleasure to serve under your stewardship this afternoon, Dr McCrea, and
also to serve on a Committee with members with such considerable
expertise. That includes not only the hon. Member for Wealden in his
capacity as Minister, but my right hon. Friend the Member for Lewisham,
Deptford, with her background as a Minister in the Departments for
Environment, Food and Rural Affairs and of Energy and Climate Change. I
have also had the privilege of being a DEFRA Minister, so I feel a
little like poacher turned gamekeeper. However, I hope to bring my
experience as shadow Minister for energy and as the Minister with
responsibility for the natural environment to bear on the
order.
We
are broadly in agreement on the order. I have to say that at the outset
to give the Minister some comfort before we begin on the details. It is
worth saying that the provisions in the order on offshore wind are
eminently sensible and are to be commended. Those who bring forward
phased development of offshore wind generation, building on
Labour’s great legacy in laying the foundations, which the new
Government are taking forward—well done—should be able
ensure that the ROCs cover the whole lifespan of the project, including
those with a phased approach. In that respect, does the Minister
foresee a time when we will need a similar order or part of an order
applying the same criteria to marine, wave and tidal
generation?
The
Minister is aware, as I am, that there are many emergent energy
generators, none of which are at full industrial capacity as yet.
Although he shares my ambition to see them up and running, that is a
debate for another day. They will also phase their development from,
perhaps, an initial array of a dozen or 15 turbines or tidal stream
generators in one area to 30, 40, 50 or more. Logic dictates that a
similar provision would be brought forward in subsequent orders when
the generators are up to the scale that we know can be driven forward.
Some marine, wave and tidal consortia in Scotland are on the cusp of
doing that, and perhaps the Minister will enlighten us about
that.
Let
me turn to the meat of the provision, which I consider to be the
sustainability criteria for biomass and bioliquids. My right hon.
Friend and I often deliberated on such matters during our time in the
Department for Environment, Food and Rural Affairs, alongside Ministers
from the Department of Energy and Climate Change, and there was great
interplay between the two Departments. Will the Minister tell the
Committee what discussions have taken place at both official and
ministerial levels to ensure that the sustainability
criteria—both those being transposed directly concerning
bioliquids from the EU directive, and those discussed today regarding
biomass—have achieved the right balance?
For the
record, I will put that in the context of the way that the European
Council describes its sustainability objectives. It
states:
“The
general policy objective is to guarantee a sustainable use of biomass
for energy purposes. The specific objectives are to ensure that heat
and power uses of biomass leads to (1) sustainable production, (2) high
greenhouse gas (GHG) performance compared to fossil fuels and (3)
efficient energy conversion of biomass into electricity and heating and
cooling.”
So
far so good. It goes on:
“The
operational objective is to establish sustainability requirements for
solid and gaseous forms of biomass used in electricity and heating, as
long as they are…effective in dealing with problems of
sustainable biomass
use”.
Again,
so far so good, but those requirements must also
be
“cost-efficient
in meeting the objectives and…consistent with existing
policies.”
That
is the conundrum with which we are dealing. It is about the balance
based on the impact assessments that accompany the order and the
explanatory memorandum, and whether we have got that balance right in
defining the sustainability criteria. We must ensure that we do not
produce negative adverse implications for land use management, or for
the transfer from food production into biofuels or biomass oil, and
that must be the case both domestically in the UK and internationally.
There are several options for the Minister to consider when looking at
how to achieve that, and the question for the Committee to consider is
whether we have that balance right.
The issue of
cost-efficiency is key. As the Minister will know from discussions with
DEFRA colleagues—about which I am sure he will illuminate
us—the provisions will not satisfy everybody. Some organisations
such as the Royal Society for the Protection of Birds, Friends of the
Earth, and others, will say that we must go much further and put the
sustainability criteria at a higher standard. Of course, that will have
implications, and not only for the UK. If all we do is transfer the
problem to other EU nations, that will simply drive our greenhouse gas
problems abroad. I hope that the Minister will elaborate a
little on the representations that he has heard during the 12-week
consultation, both within DECC and in discussions with DEFRA Ministers
and other organisations. Will he tell us who is broadly content with
the proposals and who thinks that they go too far? Who thinks that the
burdens are too great, and who thinks that the measures do not go far
enough? That will help us to decide whether we have the balance
right.
As I have
said, the aspects of the legislation that deal with offshore wind
generation are eminently sensible, and I would like to hear what the
Minister thinks about how that could apply to marine, wave and tidal
energy
in the future. I compliment the officials on the
explanatory memorandum; it is one of the best such memorandums that I
have seen. I have some queries about the impact assessment, however,
which I will return to in a moment. I am sure those matters are
inadvertent, but the explanatory memorandum is very good.
Paragraph
3.1 of the explanatory memorandum states that although, as the Minister
has explained, there are devolved aspects to the ROCs regime, the
orders, together with those in Northern Ireland and Scotland,
effectively create a UK-wide renewables obligation. That is absolutely
correct. As we consider the legislation, perhaps the Minister will
illuminate the Committee about whether there were any differences of
opinion among the devolved Ministers in terms of input into the
formulation of the sustainability criteria. Were the Welsh, Scottish or
Northern Ireland Ministers in a different position? What was the nature
of the discussions that have brought us to this point today? Or was
there broad consensus from the word go that the right balance was
achieved, between avoiding the imposition of undue burdens on
businesses, the regulatory framework and delivering legally sourced,
sustainable biomass and bioliquid
crops?
Helpfully,
paragraph 3.3 of the explanatory memorandum states that:
“The
European Commission are in the process of assessing this instrument for
the purpose of providing state aids approval. We anticipate that we
will receive this approval before this instrument is
made.”
Perhaps
the Minister could update us on progress on that issue and say whether
he has heard any more from the European Commission.
Regarding
the devolved Administrations, perhaps the Minister could tell us what
the latest information is about when the relevant statutory
instruments, or the equivalent of our orders, are being laid and passed
in those Administrations. Are they being laid today, or within the next
few weeks? What do his and his officials understand about that
process?
Paragraph
4.6 of the explanatory memorandum says that the Commission can adopt
measures relating to sustainability criteria, in terms of amending
annex 5 to the directive. If that happens, we will need to be back here
in Committee again to see how we can amend our instruments to the 2009
order. Has that measure been inserted because we expect that the
Commission will introduce some amendments to the directive in short
order, or is that just a future-proofing measure? It would be good for
the Committee to know if we will be back here before the summer recess
to look at aspects of this measure again, or even in the autumn,
because that would be pretty short order. I know how much you,
Dr McCrea, and I enjoy these Committees, but it would be
good if we got this issue out of the way today.
I will not
detain the Committee too long. The Minister will be quite relieved to
see that I do not have a flow of notes today, as I usually
do.
I mentioned
the issue of marine and tidal power and whether a similar approach can
be adopted. Paragraph 7.6 of the explanatory memorandum says
how that would actually work. I can see the sense in that.
The 50 kW
exemption is eminently sensible. We do not want to drive out new
investors or smaller investors from this potential market. Of course,
many of the
stations that would be developed would be sub-50 kW.
Can the Minister tell us how that exemption applies to Wales? Is there
any difference with regard to Wales? I may be wrong, but my
recollection is that any generation capacity below 50 kW is completely
within the devolved territory of the devolved Administration in Wales
regardless. So has that exemption been written with that in mind? Does
it have any implications? Have discussions taken place already with the
Welsh Minister for Environment, Sustainability and Housing about that
issue? If so, did she raise any concerns about it, or did she express
her
approval?
Paragraph
7.12 of the explanatory memorandum highlights the fact that:
“generators
over 1MW will need to comply with the greenhouse gas emissions criteria
and the land use sustainability criteria from 1st April 2013 in order
to be eligible for ROCs…from solid biomass or
biogas.”
That
is an absolutely sensible move. However, in the intervening time will
the Minister also consult with those industries that are not directly
involved with biomass generation, and so on, but that have an interest
in what happens with the ROCs regime and the development of this
industry? I am particularly thinking of the fact that, as the Minister
is aware, we are considering this order at the same time as there is a
Westminster Hall debate on the wood panel industry, which my hon.
Friend the Member for Liverpool, Wavertree (Luciana Berger) will be
responding to. If he has not already done so, it would be helpful for
the Minister to speak to his DEFRA colleagues rapidly about the
concern, which I was aware of when I was a Minister, that the drive
towards biomass is not only about sustainability in where we source our
biomass product from internationally, but about domestic
sustainability. The established timber industry and the wood panel
industry in this country are concerned that their products, including
some good quality wood that should not be burnt for biomass but should
be used for other purposes, might be squeezed or priced out of the
markets, and that there might be genuine job implications that do not
appear in the impact assessment. The impact assessment
focuses exclusively on sustainability in land use and the sourcing of
timber. It does not consider the other externalities of the possible
impacts on the wider timber production sector in the UK. Concerns
exist, some of which are being elaborated on at this moment in
Westminster Hall. It would be good to see whether the Minister has had
those discussions and what concerns have been raised. He has the
opportunity up to 2013 to discuss with associated industries what the
impact might be on them.
I genuinely
struggled to come to terms with this point, although I know that there
is a simple explanation, and I am sure that my right hon. Friend knows
the reason for this. What is the rationale for including fossil fuel
derivatives in the bioliquids in the eligibility for ROCs? To a lay
person it seems counter-intuitive. Why would one include
fossil-fuel derived products in biofuels and reward them with ROCs?
There must be a darned good reason, but I cannot fathom it. Am
I misunderstanding it? I am sure that the Minister will have a good and
clear reason and rationale for the
Committee.
What
has happened to the coalition agreement, and the Conservative party
commitment in the run-up to the general election, unilaterally to
impose, on a UK basis, a ban on imported timber? That is directly
relevant
to our discussion today about the sustainability of
timber products, particularly for biomass. The Conservative party was
clearly and explicitly committed in its manifesto to a UK unilateral
ban. All sorts of difficulties were involved, such as the additional
burdens that it would impose on UK businesses and the fact that our
certification scheme in the UK regarding where we source timber from
was already strong, but it seems to have disappeared into the ether.
Many green groups praised the Conservatives for putting that into the
manifesto, but we have heard nothing about it since. If that comes
forward—perhaps the Minister can enlighten me today or write to
me subsequently—it will have a significant impact on the
questions of sustainability that we are discussing today. If it has
gone, tell us so, but that changes the whole ball game
somewhat.
The impact
of the regulatory requirements on Ofgem, in terms both of funding and
of staff resources, is referred to in the impact assessment and
elsewhere. Has allowance been made and money put aside for that, or is
Ofgem expected to do this using its existing pocket of funds? It may
incur initial IT and staff costs of about £1 million;
the ongoing staff requirement is estimated to be approximately
£75,000 a year, increasing to £125,000 a year; and
offshore wind support might add marginally to Ofgem’s
administration costs. That is not a massive amount, but bearing in mind
the restrictions on all regulatory bodies, which are all currently
sharing the burden of pain, has some additional funding been acquired
from the Treasury?
Finally, I
would like clarification on an anomaly in the impact assessment, which
I believe to be a genuine mistake. The summary of interventions and
options on the front page—with which we are familiar as former
Ministers—deals entirely with biomass and nothing else. Further
down, under the policy options that are being considered, bioliquids
rear their lovely head. The two are not the same, and they do not
overlap. In fact, the early paragraphs refer entirely to biomass. It
confused me a little, and I assume that it is something that has been
overlooked and that requires some rewriting. It certainly does not
dilute the subsequent analysis in the impact assessment, but it does
seem
odd.
Finally,
I want to get to the core of the matter. As I said, one can park the
issue of offshore wind and accept that as a sensible way forward. In
the light of all my points, comments and questions, I am asking the
Minister to reassure the Committee that, when he looks at the various
options for biomass, in particular, as well as bioliquids, the
preferred option will be the one that delivers certainty around
sustainability criteria, which people have been seeking for some time
and which the previous Government were working on—the Government
are looking to make good on that. The preferred option should also have
the right balance between the burdens on industry, the light touch and
ensuring that we can hold our heads up high and say that our expansion
in biomass generation, which we all subscribe to, will not be at the
cost of the environment in this country or
elsewhere.
I
have one final point. How does this comply with the one-in, one-out
regulatory
rule?
2.56
pm
John
Hemming (Birmingham, Yardley) (LD):
Unsurprisingly, I am
generally supportive of the draft order. I must declare an interest,
which is in the Register
of Members’ Financial Interests, that I own
some farmland in Devon. I want to ask the Minister about fertiliser.
Most fertiliser is derived from fossil fuels. Does that mean that any
bioliquids suddenly become fossil-derived bioliquids? How will the
assessment of the fossil fuel impact in fertiliser come through in the
calculations? It is there for maize at the end, but nothing else seems
to take that into
account.
2.57
pm
Charles
Hendry:
It has been a fascinating discussion, and I
congratulate the hon. Member for Ogmore on finding so much detail to
introduce during the course of his remarks. I join him in his generous
comments towards not only the right hon. Member for Lewisham, Deptford,
who performed with such distinction in both Departments when her party
was in Government, but also the officials at DECC, who are worthy of
the praise that he has given. I was intrigued that the hon. Gentleman
likened his move to poacher turned gamekeeper. I would have thought
that moving from Government to Opposition was gamekeeper turned
poacher, but that is an interesting view of his relationship with his
Government.
The
measures on offshore wind have been brought forward, because we need to
recognise the huge scale of the change that is happening. Dogger Bank,
which would be the largest offshore wind facility and which Norwegian
companies are looking at developing, would produce 9 GW. If that was
around 5 MW turbines, we are looking at some 2,000 turbines. The scale
of the development requires us to look at the phasing of it in this
way. For marine energy, that will be some significant way off, but we
will keep the window open in such areas, so that if there is a need to
make further changes, we
can.
The
hon. Member for Ogmore understandably asked about the sustainability
criteria and the responses that we have had from other groups. Some
people would, of course, have liked us to go further, and he is right
that, in such areas, one must make choices about what is realistic. On
the bioliquids side, we are required to implement what the European
directive says, and that is exactly what we have done, but we have
greater flexibility on biomass. That is the reason why the impact
assessment differs. On bioliquids, we have no choice; on biomass, we
do. Therefore, there was a difference in the way that they needed to be
interpreted.
We
had some representations that said that the 60% minimum
target would not be ambitious enough. We hope that, while we have set a
minimum level, companies would go beyond it in most cases, but, as a
starting point, we are in no doubt that it is moving us strongly in the
right direction. There were some concerns from the non-governmental
organisations about the lack of indirect land use change, and we will
consider any proposals to address that issue, which is also being
considered by the European Commission, to see how they could be applied
to biomass and biogas. We consulted broadly with the NGOs and the
devolved Administrations, and we have struck the right
balance.
The
hon. Gentleman asked about the 50 kW exemption and I am grateful for
his support for that. One of the reasons for that is that anything
below 50 kW would be likely to be a domestic installation. To require
people who have put a domestic installation in place in their own homes
to be absolutely certain in all circumstances
that they have met the sustainability criteria would be a significant
burden. We therefore thought it appropriate to exempt those that are
truly microgeneration facilities. But on his question about Wales, as
this is a matter relating to the renewable obligation and those powers
are retained with regard to Wales, all of these issues will be decided
through the policies that we are putting in place today. But we have,
of course, actively engaged with the Environment Minister for Wales and
her colleagues to see how we can address those issues more
generally.
Huw
Irranca-Davies:
The Minister mentioned ROCs and I ask this
question with no foreknowledge of what the opinion of the Environment
Minister for Wales would be on this. Has he had any approach from her
as to whether she would like to have the same capacity to modify ROCs
within Wales, particularly in light of the Environment
Minister’s statement on marine wave and tidal earlier this week,
as her Scottish colleagues have to modify ROCs in Scotland? Has he had
any representations like that and would he be minded to consider
them?
Charles
Hendry:
We have certainly had representations from various
sections of the Welsh community about the threshold at which decisions
are made by different organisations. We have taken the view that it is
better that those decisions are fundamentally still made by UK
Ministers on behalf of developments coming forward in Wales and that we
see a distinction between the situation in Wales and the situation that
has existed in Scotland. Our external investors sometimes find it
confusing: if they stray a little bit north of the border there is a
different degree of ROC support. But that is part of the respect
agenda: we understand the Scottish Government can reach their own
conclusions in those areas. As we will undertake a fundamental review
of ROCs this year, which we have brought forward by an entire year,
those are clearly issues that can be addressed in that
format.
The
hon. Gentleman asked a range of other questions that I shall attempt to
go through in detail as well. He asked about alternative uses for
biomass. We have engaged with the wood panel industry in the course of
this process and we will continue to do so. We will continue to liaise
with it. We want to understand the full implications of these policies
and we know that it will engage actively in the course of the
fundamental review of the ROCs.
Huw
Irranca-Davies:
Why is it that within the impact
assessment the associated industries that are not directly involved in
generation are not referred to in terms of the costs that they may
incur, either in terms of lost access to the source material that they
use for their timber products or the impact on jobs? Is there a good
reason why the impact assessment is designed in that way or would that
need to be a separate discussion that he has beyond the impact
assessments that we see here
today?
Charles
Hendry:
The work that we are doing today is narrow in its
focus and very specific in what it is trying to achieve. As I say, we
have the more fundamental review coming forward of how the ROC regime
should work post-2013 and post-2014 for offshore wind. We want that to
give as much long-term clarity to investors
in all sectors as possible and so we think that is the appropriate area
for taking forward those discussions. That is not in any way to suggest
that they are not truly important to the considerations that we should
have, but we think that is a more appropriate place for that to take
place.
The
hon. Gentleman asked about Ofgem. Ofgem can recover its costs for
administering the renewables obligations scheme. There is a fund which
the energy suppliers contribute into, so that will make sure that any
additional costs which Ofgem incurs are covered in that approach. He
asked about the ban on imported biomass which we had spoken about prior
to the election. World Trade Organisation rules mean that we cannot ban
biomass imported from third countries, but initiatives are being
progressed by DEFRA, particularly a ban of illegal wood from Indonesia.
I can write to him about that if he would like some additional
details.
The hon.
Gentleman also asked about the inclusion of the fossil fuel element,
and why that might be happening. We concluded that it is not possible
to exclude partially renewable fuels—such as biodiesel produced
by the FAME process—from the renewable obligation because of
their eligibility under the renewable energy directive. We feel it is
right that those bioliquids should be included if they meet the
sustainability
criteria.
The
hon. Gentleman spoke about the phasing for other technologies, which
goes back to the onshore wind aspect, and I hope I have answered his
concerns with respect to the marine and tidal sectors. He asks about
how it ties in with the one in, one out aspect. The renewables
obligation is treated as a tax and spend commitment rather than a
regulation as such, but there is a very clear steer within the
Department. If we want to introduce a new regulation—and even
with our wish to avoid overregulation we are not exempt from
that—there is a robust mechanism that ensures we find and remove
something else that is at least as burdensome on
business.
Huw
Irranca-Davies:
Will the Minister write to me to explain
that please? I am unusually—or perhaps typically—dense
this afternoon, and I do not quite understand the difference. Even
though this is essentially a tax and spend issue as he described, it
does impose regulatory impacts, not only on those involved directly in
generation but also on associated industries that rely on access to
biomass or bioliquid sources for their own use. I would appreciate it
if either the Minister or one of his colleagues from the Treasury could
write to me to explain why this particular measure does not count
against the one in, one out rule the Government seem to be complying
with. Otherwise, I suspect that we might see a lot of measures defined
as simply tax and spend, and not
regulatory.
Charles
Hendry:
I am more than happy to write to the hon.
Gentleman. I can see the definition and clarity that he seeks, so if he
is happy for me to write to him to set that out in more detail I
will.
My
hon. Friend the Member for Birmingham, Yardley also asked about the
treatment of fertiliser. Fertiliser input is taken into consideration
in the life cycle greenhouse gas calculation under annex 5 of the
renewable energy directive. Ofgem will provide detailed guidance once
it has finished its consultation process.
This has been
an extremely detailed discussion, and if there are any areas raised by
the hon. Member for Ogmore that I have not fully responded to I will of
course respond in writing, but I hope that it will now be appropriate
for the Committee to approve the orders, having had the chance to
discuss them in detail.
Question
put and agreed
to.
Resolved,
That
the Committee has considered the draft Renewables Obligation
(Amendment) Order
2011.
3.7
pm
Committee
rose.