Transport Committee - Plug-in vehicles, plugged in policy?Written evidence from the Renewable Energy Association

Summary

The enquiry should include a consideration of the role of low carbon liquid and gaseous fuels as contributing to low carbon vehicles.

Reducing carbon in the transport sector is urgent and should start with carbon reduction in internal combustion engine (ICE) vehicles as a transition to electrification.

The mandatory sustainability rules, including minimum required carbon saving levels for biofuels, in the Renewable Energy Directive (June 2009) were only transposed into UK law in December 2011 in the Renewable Transport Fuels Obligation Order 2011.

UK-produced biofuels deliver c. 70% carbon saving compared with fossil fuels.

Concerns about indirect land use change should spur Governments to improve global agricultural practices and encourage the production of good biofuels rather than abandoning biofuels altogether when they can deliver carbon saving in liquid transport fuels.

More Government support is needed to develop and commercialise advanced “second generation” biofuels made from non-food plant material.

The Committee on Climate Change has said that there will be a continuing need for sustainable biofuels in the road transport sector until at least 2030. The Government should therefore urgently set out a clear trajectory to the Renewable Energy Directive 10% renewable transport target to 2020 and beyond.

Electrification in the road transport sector should take place gradually as market demand and the availability of low carbon electricity increases. It should proceed at a pace that can be serviced by the electricity industry.

Plug-in hybrids vehicles are a useful transition between ICE vehicles and full electrification.

Consumers should retain choice in their low carbon mobility.

Introduction

1. The REA represents a wide variety of organisations across the power, heat and transport sectors, including generators, project developers, fuel and power suppliers, investors, equipment producers and service providers. Members range in size from major multinationals to sole traders. There are over 950 corporate members of the REA, making it the largest renewable energy trade association in the UK. The REA’s main objective is to secure the best legislative and regulatory framework for expanding renewable energy deployment in the UK, enabling the UK to meet both the UK’s own targets under the Climate Change Act and our commitments under the EU Renewable Energy Directive.

The Terms of Reference for the Enquiry

2. For this enquiry the Transport Committee has expressed a specific interest in the contribution that low carbon vehicles, in particular plug-in vehicles, can make to decarbonising road transport. However, the road transport sector, in terms of both vehicles and re-fuelling infrastructure, is currently almost 100% based on the internal combustion engine (ICE) and liquid fuels. While plug-in vehicles, in both their hybrid and battery only forms, will have a role to play over time and in particular circumstances (such as urban mobility), there is unlikely to be an overnight shift to electric vehicles. Much more likely is a gradual transition to low carbon vehicles, starting with the use of low carbon renewable liquid fuels in ICE vehicles. The Committee’s enquiry should therefore include a consideration of the role that these fuels could play in decarbonising the road transport sector. By the same token, the Committee should look at the role that biomethane powered vehicles could play, once appropriate Government policy is put in place.

Carbon Emissions in the Road Transport Sector

3. The Committee rightly points out that 90% of the UK’s domestic transport emissions come from road transport. In addition, the transport sector accounts for nearly a quarter of the UK’s overall carbon emissions. In contrast to the power and heat sectors, emissions from transport continued to rise between 1990 and 2007 and have only fallen in recent years as a consequence of recession and rising fuel prices.1 While fuel consumption has fallen as a result of improving efficiency in ICE vehicles, the transport sector still bears a particular responsibility to make additional efforts to decarbonise.

4. Furthermore, as has been pointed out by the Oxford Institute for Energy Studies2 the sooner carbon emissions can be made to fall, the greater the overall effect will be on avoiding dangerous climate change in the future. A policy of waiting until the “right” decarbonising technology is discovered and implemented is a policy which will make decarbonisation much harder to achieve in the long run. It is highly unlikely that there will be such a “silver bullet” and policy makers should accept that decarbonising the transport sector will require a range of low carbon solutions to make a real impact.

The Transition from Liquid Fuels to Electricity in Road Transport

Phase 1—Low carbon renewable liquid fuels

5. At present, with a largely liquid fuels road transport sector, the only way to decarbonise in the short to medium term is to use low carbon renewable fuels. These can only rarely be a full substitute for fossil fuels, but when blended into standard petrol and diesel, they can make a significant contribution to reducing carbon emissions. The Renewable Transport Fuels Obligation Order 2011 (RTFO) lays down mandatory carbon savings and sustainability rules that biofuel producers and suppliers must abide by. These set minimum carbon saving levels of 35% rising to 50% by 2017 and all figures have to be independently verified. According to the latest verified figures from the Department for Transport, these fuels reduced carbon emissions in 2010–11 by 57% compared to their fossil fuel equivalent. For UK produced biofuels the figure is nearer 70%, reflecting the considerable efforts that the UK industry has put into delivering sustainable fuel. In absolute terms biofuels reduced emissions from road transport in the UK by c. 3 million tonnes CO₂ e in 2009 as shown by DfT analysis.3

6. It is important to note that there is a fully functional liquid fuel distribution infrastructure already in place so decarbonisation with sustainable biofuels can proceed without further costly investment from either Government or industry. The RTFO imposes an obligation on fuel suppliers to supply renewable transport fuels which gives the necessary market demand to make investment in sustainable biofuels viable. Beyond this there are no subsidies for biofuels.

7. Concern has been expressed that the true carbon effects of biofuels has been under-estimated because indirect land use change has not been taken into account. The science of this potential indirect effect is immature, but the UK and EU have led the way in demonstrating that low carbon biofuels can be produced. In the future, these rules and the good agricultural practices that go with them, should be transferred to all end products from the land—be they food, fuel, fibre, pharmaceuticals or forestry. Concerns about indirect land use change effects should spur Governments to transfer good practice globally and not to abandon valuable low carbon liquid fuel options. It should also be noted that the production of a number of biofuels (for example wheat-based bioethanol) delivers a high protein animal feed which can contribute to food security and provide a substitute for imported soybean meal.

8. The development of a market for sustainable biofuels through the RTFO should bring on investment in so-called “second generation” biofuels, which will be made from non-food plant material such as agricultural and forestry residues and municipal waste, using advanced biological or thermo-chemical technologies. However, the RTFO is currently capped at a target of 3.5% with no clarity as to how the UK will reach the 10% renewable transport target by 2020 that it is committed to in the Renewable Energy Directive. In these circumstances, there is little or no investment in the UK into these promising technologies and very little Government support is available. UK companies are investing overseas in countries like the USA and Brazil where there is a clear policy to decarbonise road transport fuels alongside the development of electric vehicles.

9. In their “Bioenergy Review”4 of December 2011, the Committee on Climate Change has indicated (page 78) that there will be an increasing need for sustainable biofuels in the road transport sector until at least 2030. Thereafter, if transition to electrification proceeds as envisaged, there will still be a requirement for sustainable biofuels in the aviation and shipping sectors. Therefore, in order to make progress in decarbonising the road transport sector, the Government should set out a clear trajectory to the 2020 10% target and beyond. This would give investors the confidence that there will be a return for investing in low carbon transport fuels which will be required for at least the next 25 years.

10. As noted above, the role of biomethane could be much greater than it is at present, but this technology option is currently used more in the power and heat sectors and specific policy would have to be introduced to make it attractive for the transport sector.

Phase 2—The use of plug-in hybrid vehicles

11. The REA is concerned that the process of electrification must keep pace with:

The availability of low carbon electricity. Currently, only 9.5%5 is renewable.

The capacity of the electricity industry, in terms of generation, transmission and distribution, to service the transport sector as well as the power and heat sectors.

The availability of an adequate re-charging infrastructure to give consumers confidence to invest in electric vehicles.

12. We believe that, if sufficient low carbon electricity is available without threatening other sectors of the economy, there could be a gradual transition to electrification via the use of plug-in hybrid vehicles. These vehicles should be able to depend not only on a low carbon electricity supply but also on the availability of low carbon liquid fuels. In this way consumers will be able to retain choice in their mode of low carbon mobility while technologies continue to be developed in the low carbon power and liquid fuel markets as well as in the manufacture of electric vehicles and batteries.

Phase 3—Full electrification

13. With today’s technologies a transition to full electrification cannot be taken for granted. For example, from the point of view of low carbon electricity, the “Bioenergy Review” of the Climate Change Committee suggests that a wholesale shift to electric vehicles would require fully operational nuclear and Carbon Capture Storage programmes. Neither of these is a foregone conclusion in today’s economic climate. There also remain significant uncertainties around support available to renewable power generation. In addition, little attention appears to have been paid to the embedded carbon and resource availability (in particular rare earths) effects of electric vehicles and their associated battery technology. With so many unknowns, the REA would recommend that policy supports all forms of low carbon mobility so that consumers retain choice and the market, rather than Government, picks the winners.

Conclusion

14. There is a pressing need to decarbonise the UK’s road transport sector which is such a significant emitter of carbon. However, this cannot be achieved by moving overnight to electric vehicles which would be prohibitively expensive in terms of both vehicle and infrastructure.

15. The REA would like to make the following recommendations:

As the road transport market is a liquid fuels market and will be for many years, greater effort should be made to decarbonise liquid fuels.

The Government has been unnecessarily paralysed by adverse publicity directed at some very bad examples of biofuels. It should concentrate on policy that promotes good biofuels, such as those produced in the UK, and set a clear trajectory for renewable transport fuels under the RTFO to 2020 and beyond.

Government should give further support for advanced biofuels, particularly for R&D and commercialisation.

Plug-in vehicles have a role to play, provided there is sufficient low carbon electricity to service this new market demand.

Consumers should continue to have choice in their low carbon mobility.

April 2012