Draft Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011

The Committee consisted of the following Members:

Chair: †Mr Peter Bone 

† Anderson, Mr David (Blaydon) (Lab) 

† Blackman, Bob (Harrow East) (Con) 

† Burt, Lorely (Solihull) (LD) 

Clarke, Mr Tom (Coatbridge, Chryston and Bellshill) (Lab) 

† Dobbin, Jim (Heywood and Middleton) (Lab/Co-op) 

Donaldson, Mr Jeffrey M. (Lagan Valley) (DUP) 

† George, Andrew (St Ives) (LD) 

† Hendry, Charles (Minister of State, Department of Energy and Climate Change)  

† Irranca-Davies, Huw (Ogmore) (Lab) 

† James, Mrs Siân C. (Swansea East) (Lab) 

† Menzies, Mark (Fylde) (Con) 

† Opperman, Guy (Hexham) (Con) 

† Redwood, Mr John (Wokingham) (Con) 

Roy, Lindsay (Glenrothes) (Lab) 

† Stuart, Ms Gisela (Birmingham, Edgbaston) (Lab) 

† Wharton, James (Stockton South) (Con) 

† White, Chris (Warwick and Leamington) (Con) 

† Wiggin, Bill (North Herefordshire) (Con) 

Mark Oxborough, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee 

Thursday 8 September 2011  

[Mr Peter Bone in the Chair] 

Draft Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011 

8.55 am 

The Minister of State, Department of Energy and Climate Change (Charles Hendry):  I beg to move, 

That the Committee has considered the Draft Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011. 

It is a pleasure to serve under your chairmanship this morning, Mr Bone. 

The regulations are one of a number of steps that the Government have taken to underpin our ambitious carbon capture and storage demonstration programme. They are intended to create the right regulatory framework to encourage the efficient development and utilisation of carbon dioxide pipelines and storage sites. They are also one of a number of steps that we must take to transpose the EU directive on the geological storage of carbon dioxide into UK law. The regulations apply in Scotland as well as in England and Wales and are being made with the agreement of Scottish Ministers. 

In addition to setting out arrangements for the environmental permitting of carbon dioxide storage sites, the CCS directive requires member states to introduce arrangements that enable third parties to access pipelines and storage sites on a fair and transparent basis. The detail of implementation is left to member states, but the directive requires our arrangements to meet certain requirements: for example, we are obliged to ensure that if access is refused on grounds of lack of capacity or lack of connection, the owner of the infrastructure makes the necessary enhancements when a potential customer is willing to pay for them, providing that doing so does not have a detrimental impact on the pipeline or storage site. 

The directive also provides for access to be refused where there is incompatibility in technical specifications that cannot reasonably be overcome, or where there is insufficient current or likely future capacity, so that must also be a feature of our arrangements. Finally, we must set up independent arrangements to resolve disputes about access, should they arise. 

In December 2010, we consulted on how to implement the directive’s requirements most effectively. The UK already has a comprehensive regime for avoiding the unnecessary construction of pipelines and for facilitating access to existing pipelines where there is available capacity. Those arrangements are set out in the Pipe-lines Act 1962 and the Petroleum Act 1998, and they apply to pipelines carrying carbon dioxide in the same way as to pipelines conveying other fluids. They are the basis on which the development and utilisation of offshore oil and gas pipelines have taken place for many years. 

The existing arrangements are based on the principle of negotiated access, so the onus is on the parties that are directly involved to reach agreement, but that is underpinned by the ability to appeal to an independent authority in the event that those negotiations fail. Where

the authority intervenes, it is able to determine, among other things, whether modification or access should take place and, if so, the financial arrangements for the imposed settlement. The majority of those responding to the consultation agreed that that was a natural starting point for our national arrangements for implementing the directive. 

The draft regulations therefore take the arrangements that already apply to carbon dioxide pipelines, adapt them slightly for consistency with the requirements of the directive and extend them to cover storage sites. They also consolidate those arrangements into a single piece of legislation that is specific to the transport and storage of carbon dioxide. The regulations have effect at the time that approval is given to construct a new pipeline or storage sites or to the modification of existing infrastructure, and in circumstances where a third party is seeking to secure access to existing infrastructure. 

Where a new pipeline or a storage site is being constructed, the regulations provide for the relevant authority—the Secretary of State, or Scottish Ministers for infrastructure that is located in Scotland—to impose conditions when granting consent for the construction of a new pipeline or when permitting a storage site. They may require, for example, the pipeline or storage site to be constructed or permitted to a greater capacity or, in the case of a pipeline, to follow a modified route. The intention of the power is to avoid the construction of unnecessary pipelines or storage sites. In most circumstances, it is likely to be in the beneficial interest of developers to co-operate on such projects. 

The authority will be able to exercise those powers only if it is satisfied that there is evidence of demand or likely demand for further infrastructure. It will also have to be satisfied that the conditions it imposes will not compromise the safety and environmental integrity of the infrastructure or its efficient operation. We are in the process of developing guidance on the principles the authority will use in coming to such a decision on that power and other powers available in the regulations; we will consult extensively before the guidance is finalised. 

Mr John Redwood (Wokingham) (Con):  In the assessment of the impact the cost estimate is given as £15,000, but further reading reveals that that is for only one possible intervention against one possible owner of a facility. Presumably, the idea is that the provision will be much more widely used. Does the Minister have any other more realistic cost assessments? 

Charles Hendry:  In the latest cost assessment, we think that the power will be used relatively few times. By its nature, it requires that, rather than a pipeline being installed and used for only one facility, other facilities will be able to join in; those who providing the pipeline will therefore gain significant additional revenue from more CO

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passing through it or more use of their CO

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storage facility. It is difficult to assess the precise number, but approximately five locations in the United Kingdom are likely to be appropriate for such developments: Thames, Humber, Teesside, Scotland on the Forth, and Liverpool. That is of a limited nature, but if my right hon. Friend would like me to write to him with additional detail, I am happy to do so. 

The regulations also provide for third parties to access or to seek modification to existing transport and storage infrastructure. Again, those seeking access must first

negotiate an agreement with the owner of the infrastructure; if they cannot reach agreement, the applicant can apply to the authority for a notice granting access rights. Before considering an application, the authority must be satisfied that the applicant and the owner have a reasonable time in which to reach agreement. If the application is considered further, in reaching a determination it must take account of a number of factors including: the interests of the users and owners of the relevant infrastructure; the available capacity and the reasonable needs of the owner; technical compatibility; and any potential negative impact on the environmental security of the infrastructure. If the authority is considering an application from a third party for access rights, it also has the power to require modifications to the infrastructure in question: for example, to increase its capacity or to provide junctions in order to permit connection to another pipeline carrying carbon dioxide. 

If the authority grants access rights and requires modifications, it will also have the power to determine the charges to be made for access and the cost of modifications. Any such determination will be made on its merits. The principles to be followed are subject to the consultation I mentioned, but in most cases we expect the terms to be in line with those that would be offered by infrastructure owners were they to face effective competition from other infrastructure owners with sufficient capacity to accommodate the CO

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. 

The regulations create an offence of providing false information to the authority in discharging its functions under the legislation. They also provide for the parties to enforce a determination through the civil courts in the same way as if they had reached a negotiated agreement and entered into a contract that they had subsequently not honoured. Both measures are in line with reforms to the arrangements for oil and gas pipelines in the Energy Bill. 

The directive also requires our third party access requirements to be transparent, which the regulations achieve by requiring information about available spare capacity to be published. In determining available capacity, infrastructure owners can take account of their reasonably foreseeable needs and, in the case of a storage site, against a baseline of the site’s authorised capacity. Such information must be published within a year of the permit’s issue and whenever there is a substantial change in the available capacity. If there is available capacity, details of technical specifications such as dryness and impurities must also be published. 

I hope that the Committee will agree that the regulations represent an important step in creating a regulatory environment that encourages the joint development and use of carbon dioxide pipelines and storage sites. 

Mr Redwood:  The main worry of many electors and businesses is the price of energy. Can the Minister provide some guidance on how much dearer electricity generated with carbon storage is than that generated from gas? 

Charles Hendry:  It is significantly more expensive. The planned plant itself is extremely expensive. In our negotiations with ScottishPower, we are considering what £1 billion can achieve in the development of carbon capture and storage capacity. It is also the case that a proportion of the plant’s output—about a quarter or a third—is required to run the CCS facility, so it is

less efficient. Overall, the cost impact is significant, but CCS allows us to continue to use fossil fuels in the energy mix in a way that otherwise might not be possible. 

We believe that the regulations strike the right balance between facilitating access to and joint development of CCS infrastructure, while protecting the legitimate interests of the facilities’ owners. They also have the benefit of being based on arrangements widely understood within the oil and gas sector and are therefore familiar to many of those interested in such developments. As such, they are an appropriate response to the transposition of the relevant aspects of the CCS directive and I commend them to the Committee. 

9.6 am 

Huw Irranca-Davies (Ogmore) (Lab):  Thank you, Mr Bone. It is a pleasure to serve under your stewardship today. I also thank the Minister for his opening remarks and detailed explanation of the instrument. 

Let me make it clear at the outset that Her Majesty’s loyal Opposition support the regulations, because delivering CCS at the scale required to meet UK CO

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reduction targets will require the efficient development and operation of CO

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transportation and

storage infrastructure. The provision of infrastructure will enable numerous sources of CO

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to transport and store CO

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in the most cost-effective

way possible. The development of a third party access regime to enable potential users to access the CCS infrastructure is welcome, particularly in a manner that is fair and non-discriminatory for all parties involved, and, where possible, encourages co-operation to develop common infrastructure. However, during discussions with industry and representative bodies in preparation for today’s Committee, I was made aware of some concerns that they still have which, if not addressed, could disincentivise investment in CCS and become a barrier to the deployment of CCS in the UK. It is clear, however, that there is no desire to see any hold-up in the progress and acceptance of the regulations. 

The industry’s concerns will not be wholly new to the Minister, and I am sure that he will be able to provide detailed responses. With support from industry and Labour Members, therefore, and bearing in mind the concerns of industry and representative bodies, in responding to my queries, I hope that the Minister can reassure the industry and, more important today, the Committee. 

First, industry and CCS representative bodies state that there are fundamental and very significant differences between CO

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pipeline and CO

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storage sites, in terms of the regulatory regime under which they operate and our technical understanding of such technologies. The Carbon Capture and Storage Association believes that that calls into question the assumption that third party access principles governing CO

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transportation pipelines can be applied to CO

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storage sites. The CCSA believes that separate third party access arrangements governing access to each of these parts of the CCS chain are needed to deal satisfactorily with the considerable differences between CO

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transportation and CO

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storage infrastructure. What are the Minister’s views, and what progress has he had in discussions with the CCSA on that matter? 

Secondly, although identifying spare capacity in the CO

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transportation pipelines is relatively easy, and where additional capacity is available it can be utilised by a third party with little or no impact on others in the pipeline, the same cannot be said of identifying spare storage capacity in a geological store. There is concern that the regulations fail to recognise the technical and financial challenges involved in identifying and increasing geological storage capacity. The CCSA believes that the natural variability of CO

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stores also means that the commercial arrangements of governing third party access will vary significantly and be dependent on the individual characteristics of each store under consideration. As such, the CCSA believes that there is unlikely to be significant quantities of spare, available geological storage and pipeline capacity. 

For example, I am aware that it is likely that no source of CO

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will commit large capital sums to install capture facilities without first having identified and contracted a site for CO

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storage. I am sure that the Minister agrees. Similarly, developers and operators of storage sites are unlikely to develop a storage site without having identified and agreed terms with sufficient CO

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sources to fill the store, thus spreading the development costs over the total tonnage of CO

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stored. As an aside, questions remain about what effect additional tranches of CO

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from a third party will have on the profile of a CO

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store. I know the Minister has been wrestling with those immensely difficult technical questions, but if the regulations are to work, they require satisfactory answers about how we reconcile them. 

The CCSA notes that, unlike natural gas production and transmission, the CO

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production profile is likely to be constant throughout the contracted period. As a consequence, spare capacity available to third parties is unlikely to be significant. In the light of the discussions that he has had and the work undertaken by his Department, what spare capacity in pipelines and at storage sites does the Minister expect? 

Thirdly, there will undoubtedly be costs to the storage operator when identifying spare capacity. Who will be responsible for those costs, particularly when no spare capacity is found? Will the cost be borne by the third party that requested the additional capacity, or by the storage operator that was required to try to make the capacity available? I ask that question for two additional reasons, both of which are related to the requirement in the regulations that state that spare capacity is to be reported publicly. First, not knowing what framework under which CCS will operate in the future, the available storage capacity held by a storage operator could be considered to be commercially sensitive information, as the capacity of the store available to the operator is the key asset that determines the value of the business. Secondly, there are technical challenges to identify accurately the storage capacity of any specific geological storage site. What may be deemed accurate could be incorrect after the commencement or injection of the maximum injection rates, or the maximum injection rates could be lower than expected. All that raises the primary and overriding questions of who carries the risk—the right hon. Member for Wokingham alluded to that—and who will be held liable in the event that the estimated and reported spare capacity is subsequently found to be less than the available capacity? I would appreciate the Minister’s comments on those important matters. 

The legal liability for stored CO

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resides with the operator of the geological store, and my understanding is that the CCS directive permits only one operator for each geological storage site at any one time. Consequently, where a third party are granted access to a CO

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store, the incumbent operator will be required to become the storage operator for the third party and will have, I assume, legal liability for it. Does the Minister share the concern of many in the industry that that liability arrangement may be a significant barrier to CCS deployment? In addition, there is clear interdependence between the storage of CO

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and the CO

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transportation infrastructure. Will a third party be required to demonstrate that it has access to the remaining parts of the CCS chain necessary to deliver the CCS project, and not just to storage? The parts all hang together and are integral to one another. 

I have a question about the authority, whether it will be the Infrastructure Planning Commission, the major infrastructure planning unit, or the Secretary of State, whose role has become even more pivotal with the passage of the Localism Bill through Parliament. Industry confidence in energy policy is clearly paramount at all times, as it will be for third party access arrangements under CCS. In the explanatory memorandum to the regulations, paragraph 9.1 states that the Department of Energy and Climate Change will publish guidance later this year to 

“set out the approach the appropriate authority would take if asked to make a determination over access and the principles against which financial terms would be determined.” 

The industry informs me that it would prefer that the advice received by authority in its decision-making process be independent expert advice. I know that the Minister is aware of these concerns, and I would appreciate his giving us an idea of how the decisions will be taken and whether they will be underpinned by independent expert advice. Industry is urgently seeking answers, as it wants to get on; it is already investigating the next investment steps. 

I have two further questions for the Minister. First, if the regulations are accepted by the Committee, they will come into force tomorrow. Will he assure us that the industry is fully aware of that, particularly as the regulations have the potential to create a criminal offence? I am sure that the industry is aware of that, but I seek his assurance. 

Secondly, the explanatory memorandum states that the preferred option, option 2, involves the minimum transposition of the relevant articles of the CCS directive by June 2011—that is on page 9. If the transposition date was June 2011, why are the regulations in Committee three months later? The articles should already have been transposed. There seems to be a break in the logic of the process, but I am sure that there is an explanation. 

Although I have asked those questions and sought Minister’s assurance on behalf of the industry and the Committee, we will support the regulations, which are necessary to bring forward the CCS industry in the UK. I look forward to the Minister’s response, and to the contributions of other Members. 

9.17 am 

Mr Redwood:  I am somewhat heavy-hearted about the regulations. However, I preface my remarks by saying that we are fortunate to have the Minister present, as I know him to be hard-working, capable and able. 

Of course, this is not really the Minister’s business; it is led by the European Union, and he is doing his best to implement decisions taken elsewhere. I fully support him in wishing to have the minimum additional cost

and complexity in transposition, so I favour the choice of option 2 as set out in the documentation. I am grateful to the Opposition spokesman, the hon. Member for Ogmore, for raising some interesting points about business value and business complexity for those who own the stores, which are worthy of discussion. 

In general, I am happy that we are using a common carrier model. The only way to develop a market like this is through such principles; they work well for oil and gas. They were developed in the United States of America, and are now operating reasonably well in the North sea. We have operating experience, and adapting them for this purpose is fine. 

If I am heavy-hearted, it is about the overall aim. Carbon dioxide is a harmless, colourless, odourless and friendly gas. It is the basis of plant life on the planet. If there were a little more of it in the air, we would probably have more fertile agriculture and be a bit closer to solving the world’s food problems. I understand the great concern that, rather uniquely, it is the cause of global warming. I receive a large number of letters from people who think that there has not been any global warming in the last 10 years, that it may have been caused by sunspots and solar action, or that it may have been caused by excess water vapour or changes in cloud formation and wind and other possibilities. 

This is not the time or place to go into such matters, but I refer to the fact that there is uncertainty, certainly among the electorate if not among the scientists on the payroll, and it is causing a political problem for Governments who say that it is an agreed science. There are all sorts of implications. 

I am happy to build bridges with the Government, and particularly with the Minister, because there is a case to be made for doing things to promote energy efficiency and lessening fuel-burn. There are all sorts of good reasons; it will raise living standards and improve the economy, and there is a lot to be said for taking action to improve security of supply. Those factors often marry nicely with the aims of those who think that the sole aim of such a policy should be to cut carbon dioxide output from energy generation and for other purposes. 

My worry—it was the reason for my second intervention on the Minister—is that the United Kingdom should not go it alone to the point where we have dear energy, as jobs will be diverted from Britain. For people running a process industry, making glass, cement or steel, firing ceramics or doing other such things, the energy content of their business is an extremely high proportion of their costs. If the whole purpose of British energy policy is to increase the energy cost too much, we will cut against the Government’s excellent policy—supported by the Opposition—that we need an industrial renaissance in Britain that will entail burning more energy. 

Within the strict limits of the regulations, I would ask whether we can be sure that driving the measures forward as we seem to be doing will not lead to problems with our industrial strategy, because that would be an own goal. I am very happy for us to lead the world in new and exciting technology and to see business opportunities, but does the Minister have any reassurance for us about the work being done by the Secretary of State for Business, Innovation and Skills to provide relief from super-high energy prices in Britain so that our industry is not sent offshore? 

9.21 am 

Charles Hendry:  We are having a useful and interesting debate, covering the minutiae of the regulations and the broader policy background against which they need to be considered. I will address the points made, but not necessarily in the order in which they were raised. 

First, the hon. Member for Ogmore asked why the regulations were being introduced only now, when the date had been set for June. They were laid on 20 June, which was ahead of the 25 June deadline, but we felt that we had to consult more widely than other countries. Britain is leading the work on CCS in the European Union: there is much more interest here in taking it forward. Of the projects submitted to the new entrant reserve fund, which is run by the European Union, one third of those from all 27 member states come from the United Kingdom, which shows that there is much greater interest here. We have the involvement of a much more active academic community, with many of the world’s learned papers being produced from British institutions. It was therefore appropriate for us to be more thorough in our consultation than countries that perhaps have little interest in dealing with the matter. We have tried to give industry the best opportunity to have its views taken into account. 

Secondly, the hon. Gentleman asked whether people were aware when the measures would come into force. Following the consultation, we have worked closely both directly with the industry and with its representatives through the CCSA on there being no imminent requirement. For our first project—demonstration 1—we are discussing carefully with the operators the detail of how it might work, so no one will be making a request to the Secretary of State about shared access arrangements tomorrow. However, the industry has been pleased by the pace at which we are seeking to move the matter forward. 

The hon. Gentleman also asked about independent advice. It is right that decisions should be taken by Ministers, and it would be inappropriate for the powers to be vested in anyone other than the Secretary of State or Scottish Ministers, as they are the regulators of carbon dioxide storage generally. It is not uncommon for Ministers to have a quasi-judicial function in areas where they also have a policy role, so we can be comfortable that we have got the right balance. 

Huw Irranca-Davies:  I concur fully with the Minister that it is right and proper for the Secretary of State or other Ministers to take such quasi-judicial decisions and to keep the democratic and political levers in control. However, independent expert advice is often sought to underpin quasi-judicial decisions, because the Secretary of State or a Minister can either concur with the advice or can explain to a Committee such as this why that advice should be rejected. What substantive advice will the Minister seek to give him the confidence that the Secretary of State’s quasi-judicial decision is right? 

Charles Hendry:  There can be no blanket rule. Individual applications that are made to the Secretary of State will all be different, and it is right that we should view each case on its merit. We will always be conscious that any decision made by the Secretary of State may be subject to legal challenge. Therefore, it will be relevant to have greater independent advice to support ministerial decision making in more complicated cases. However, some will

be much more straightforward and easy to resolve; indeed, we hope that many will be resolved without the need to come to Ministers in the first place. 

The hon. Gentleman’s first question was about the difference between the CO

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pipelines and storage sites, and that was the essence of his second point, too. We discussed this carefully with the industry and reformed the draft regulations to take account of its concerns, so the provisions now treat pipelines differently from storage sites. However, the hon. Gentleman is absolutely right that there is a major difference between identifying the capacity of a pipeline, which one can measure with complete accuracy, and identifying that of a storage site. The best measure of the scale of a storage site is knowing how much has come out of it. We know how much oil or gas has been withdrawn from the depleted fields, so that will give some indication of what capacity is there. However, the onus will be on the legal agreements between the different parties. 

The point that the hon. Gentleman moved on to has been at the core of the discussions on demonstration 1. People do not want to build a CCS facility if they do not think there is somewhere for the CO

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to be disposed of in the long term, and they do not want to construct the pipeline and the injection facility necessary to access the disposal site if they do not believe there will be a long-term contract to provide the CO

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that goes into it. That is absolutely at the core of the discussions that have been taking place. These will always be complex matters, but the more different operators can share the load, and the more we make use from the outset of oversized pipelines, which provide spare capacity for others to come on stream, the greater the assurances we can give operators of disposal or sequestration sites in the longer term that there is a long-term source of supply. Inevitably, commercial risks are being taken. At the end of the day, this is a business decision, and the Government will not force it on people. Accordingly, there is some degree of commercial risk, which will be reflected in the pricing arrangements. 

The hon. Gentleman raised concerns that there might not be spare capacity. We believe that that will usually be the case, but there will certainly be circumstances in which excess capacity is present from the outset. Indeed, the Government believe that that is desirable. If we want things to move forward in the way they have the potential to move in the UK, it is much better to have economies of scale from the outset than for each facility that creates CO

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to have its own pipeline to its own storage facility. That is one reason why our most recent consultation talked about a CCS authority that could regulate and manage some of that process to deal with some of those issues. However, we are very willing to be guided by how industry thinks this can best be taken forward. At the moment, the case has not been made for such an authority, and industry’s preference is that things should be done on a case-by-case basis. 

The regulations make it easier to deal with some of those issues by encouraging people from the outset to look at a broader range of users. If they realise that they may be required to do that in due course, it makes commercial sense for them to look at the outset at who else might want to come in and at how they can justify building the larger pipelines that will be necessary. I hope that I can reassure the hon. Gentleman, however,

that we have involved industry every step of the way through the development of the proposals, and it is encouraging that the UK has some of the best and most experienced operators, who could be doing this work. 

My right hon. Friend the Member for Wokingham touched on an issue that is critical for not only CCS but the whole energy debate. There is real concern about extra costs being piled on domestic consumers. Significant price rises are coming through, which will be a great concern this winter. Business users are also affected, which raises the issue of whether everything we are trying to do to make business competitive will be made more complex by rising energy prices. 

We have already done a number of things to minimise that effect. First, the system we inherited meant that the levy for paying for CCS would have been included in industry bills, but we have taken that away. If the Government want these things to be done at the demonstration and pilot stage, they should be funded from general taxation, which is why £1 billion was found from general taxation for the first project, and the levy has been taken off industry bills. Secondly, the renewable heat incentive would also have been on bills, but we have taken it out and funded it out of general taxation. 

At every step along the way, we need to be reassured that, while we are trying to move in a sensible direction in reducing carbon emissions, we are doing so at the least possible cost to consumers. That is why on the feed-in tariffs we took what was an unpopular decision. The major schemes that were coming through would absorb a huge amount of funding, which would come from people’s bills. We said that that should be capped. It was far too generous. It was giving extremely wealthy investors a 15% return on their investment, which was paid for in the household electricity bills of people on low incomes. That did not seem to me to be the right way of funding the measures. 

Lorely Burt (Solihull) (LD):  I understand the reasoning behind the decision made with regard to big providers. However, a number of community, not-for-profit organisations have been involved and been subject to capping, which I do not think was the Minister’s intention. May I test your patience, Mr Bone, and ask the Minister whether he has considered the possibility of extending the measure to not-for-profit, community groups? 

The Chair:  Order. Before the Minister replies, I just wonder whether we are slightly wandering off the subject of carbon dioxide storage. 

Charles Hendry:  Mr Bone, the community rates of feed-in tariff are probably some distance away from CCS, but if I may, I will briefly respond to the question. We have tried to say that we should consider the smaller schemes that the measure was designed to encourage—household schemes, community schemes and church schemes—and give a more advantageous rate to them than we are giving to wider ones. 

Huw Irranca-Davies:  On a point of order, Mr Bone—it may in fact be a point of information; I am not sure whether we are allowed to make points of information as opposed to points of order—to help the Committee, may I point out that there will be an opportunity to discuss the issue in full next Thursday, when the statutory instrument that Her Majesty’s loyal Opposition have

prayed against gives us an opportunity to expand on the issues. We would support that idea as a way forward on the solar FIT scheme. I say that to help the Minister and the Committee. 

The Chair:  The shadow Minister is right—that was not a point of order. 

Charles Hendry:  I shall seek to bring together the comments and concerns of my right hon. Friend the Member for Wokingham with the specific measures in the regulations. We are trying to put in place a system whereby fossil fuels—coal and, in time, gas—can play a very important role in our future generation. We know that we have hundreds of years of coal supply in this country. We know that gas is plentiful around the world and should be a resource that we look to use. What we are talking about is a way in which we can develop a technology and Britain can have a real leadership role. It is estimated that by the middle of this century there could be 70,000 jobs in CCS in the United Kingdom. We are considering how we can take that forward, while always considering the impact on people’s bills. 

A comprehensive set of measures is being developed by the Treasury, the Department for Business, Innovation and Skills and the Department of Energy and Climate Change, which we will publish towards the end of this year. It considers how we can address these issues, but as I have said, it would be madness to end up with policies that drive companies abroad so that they are emitting CO

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elsewhere—probably under a less constrained regime, so perhaps emitting more CO

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. The jobs would be exported. We would have to import the products. The wealth would be exported. There would be no gain to Britain and no global gain in terms of carbon policy. Therefore, we are determined to introduce these measures in a way that has the least impact on bills for households and businesses, and to put additional measures in place to provide support for our heavy manufacturing industries. 

Huw Irranca-Davies:  My intervention is on that point and related to the regulations before us and the point raised by the right hon. Member for Wokingham. Does

the Minister see a need to create a body similar to the authoritative Committee on Climate Change—the fourth annual carbon budget was recently signed off—to consider the specific issue of affordability, both for Mrs Miggins living in a terraced house at the top of the valleys and in terms of UK plc and competitiveness. If there is consensus among all main parties about our trajectory on decarbonisation of energy, it would be great to have independent, expert and authoritative advice that the Minister was on the right track in relation to affordability and security. If the Minister does not see the need to explore that, how does he see this issue going forward? 

Charles Hendry:  One can create too many bodies. We already have the Committee on Climate Change, which advises on and takes account of the issues mentioned, and Ofgem, which considers the impact on prices of different policies and advises the Government in those areas. The most important point is that at the end of the day, it should be Ministers who make the decisions and take the lead. We are saying that we want Britain to be competitive, and we should not delegate that process to some independent group. It is a core part of Government responsibility to make industry competitive in this country in a way that enables us to meet our carbon objectives. Ministers should be in the driving seat rather than push that responsibility on to some other body. 

I hope that the debate has enabled the Committee to address the issues directly related to these measures—it has enabled hon. Members to address a wide and rather exciting range of other issues as well. I hope with those words that the Committee will be willing to agree to the directive. 

Question put and agreed to.  

Resolved,  

That the Committee has considered the Draft Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011. 

9.35 am 

Committee rose.