Energy and Climate Change CommitteeWritten evidence submitted by the National Farmers’ Union (BIO09)
Summary Points and Introduction
the NFU is confident in the government’s assessments of bioenergy potential;
we are dismayed at the overall slow rate of progress and numerous policy upsets which have undermined investor confidence; and
the government has failed to address barriers to domestic perennial energy crop production.
1. The National Farmers’ Union of England and Wales (NFU) represents 47,000 farm businesses in England and Wales, involving an estimated 155,000 farmers, managers and partners in the industry. We also have about 40,000 members with an interest in farming and the countryside.
2. With 75% of national land area in the agricultural sector, NFU members are well-placed to capture renewable natural energy flows, while maintaining our traditional role in food production as well as the delivery of other environmental and land management services. It is the NFU’s aspiration that every farmer should have the opportunity to become a net exporter of low-carbon energy services.
3. The NFU is already engaged with DECC, Defra, DfT and other government departments and advisers in directing climate change and renewable energy policy into real economic opportunities for rural diversification and job creation. Agriculture and horticulture can help to mitigate climate change, while contributing to both energy security and food security. The NFU works closely with other trade associations and non-government organisations with an interest in renewable energy, including the Renewable Energy Association (of which we are associate members) and RenewableUK (representing the wind power industry) and the Anaerobic Digestion and Biogas Association.
4. Deployment of renewable energy goes way beyond just managing UK carbon emissions: the land-based sector, in particular, will contribute to domestic supply chain development, supporting rural diversification and job creation, and will help with environmentally-sound management and utilisation of organic wastes and co-products (manures, crop discards, agricultural residues, food processing and packing waste).
5. It is only logical that the UK should source a proportion of national energy needs from a domestic resource over which we have a reasonable degree of economic and environmental control—bioenergy. The NFU recognises that bioenergy is expected to deliver the majority of UK renewable energy supply by the end of the decade, just seven years from now, as well as playing a key role in the longer term towards 2050. We welcome the opportunity for farmers to increase bioenergy supply from crops (wheat, oilseeds, sugar beet, maize and grass silage), agricultural residues (eg straw, manures, crop discards), improved management of farm woodlands, and new perennial energy crops like miscanthus and willow.
Questions
What contribution can biomass make towards the UK’s decarbonisation and renewable energy targets? Are the Government’s expectations reasonable in this regard?
6. As stated above, the NFU has confidence in the government’s current and previous assessments of the potential of bioenergy to contribute towards DECC’s policy goals. However, we are dismayed at the overall slow rate of progress, and the uneven balance; between opportunities at different scales of investment, and between electricity generation, heat supply and transport fuels. A range of policy upsets, from the slowing of biofuel targets to the proposed capping of dedicated biomass generation, are threatening systematic failure to attain the considerable potential of bioenergy. Stop-start progress for the ground-breaking Renewable Heat Incentive (RHI) has also resulted in setbacks for many investments, the latest being for large biomass heating boilers over 1 MW, where early adopters (prior to January 2013) could be perversely put at a competitive disadvantage next year if the tariff available is increased.
How well have the Government’s bioenergy principles (set out in the 2012 Bioenergy Strategy) been translated into policy?
7. The government must stop downplaying and apologising for bioenergy—even the Ministerial Foreword to the 2012 Bioenergy Strategy was overly negative: “...used in the wrong ways, bioenergy can actually confound our aims.” Investor confidence is being undermined, with dire consequences for the development of supply chains. This will only result in the under-achievement of DECC’s own policy goals for energy supply and job creation. Furthermore, although the Strategy promised action on “improving the opportunities from domestic supplies”, there has been little follow-up. Defra and DECC proposed to “explore ways of removing barriers to energy crop production and steering growth in ways which enhance the wider environment”, measures that the NFU has been calling for since 2007—yet Defra’s Energy Crops Scheme (ECS) is due to end this year, with no successor in sight. Reform, rather than complete termination of the ECS, is preferable in order not to send a negative message to the existing supply chain. A market-based mechanism may be preferable—such as incentivising fuel-buying users to offer improved terms of trade, sharing more of the risk with growers, eg payment of a proportion of costs upfront at the time of planting.
Are genuine carbon reductions being achieved?
Is bioenergy making a cost effective contribution to carbon emission objectives?
Is support for bioenergy maximising the overall benefit to the economy?
8. In spite of the substantial criticism levelled at the bioenergy sector, the NFU believes on the basis of balanced evidence that bioenergy can achieve genuine carbon reductions, with up to 70% GHG savings attainable for biofuels of UK origin, and as little as 100 gCO2/kWh attainable for biomass power generation. Support leading to a mature biomass industry in the UK is essential, since this will likely be less vulnerable to price volatility, and could help provide stability against price shocks in other fuel sources. Bioenergy, since it is based upon storable fuels, will help back up the intermittent production from other renewables such as wind and solar power—indeed, it could do much of the “heavy lifting” in renewable energy supply to 2020 and in the following decade to 2030. In rural areas, the RHI should be supporting more farm businesses and rural communities, many of which are not connected to the gas grid and are reliant upon more expensive heating fuels.
Is sufficient attention being given to potential impacts in other areas, such as food security and biodiversity?
9. As a competent authority on matters of food security, the NFU is confident that current safeguards and sustainability criteria provide the right level of checks and balances. Further upheavals in policy making would pose a greater threat to both food security and biodiversity compared with providing a long-term consistent policy environment that supports investment in both agricultural production and processing technologies.
What challenges are there to scaling up the use of biomass in the UK (ie regulation, feedstocks, sustainability, supply chain and financing)?
10. The challenges to developing biomass use and production to meet projected UK demand must not be underestimated. Drax power station in North Yorkshire is on track to achieve 16% biomass firing this April, growing to one-third in 2014 and eventually 50%. At nearly 4000 MW total capacity (7% of UK electricity) Drax will be effectively 660MW biomass-fired by April, alongside the RWE Tilbury plant in Essex (750 MW, to be upgraded 870 MW by 2015
To what extent will UK be able to provide its own biomass and how much is likely to be imported?
11. The NFU believes that DECC should set an ambition for the level of domestic virgin biomass feedstock supply, of the order of 10 million tonnes per annum by 2020. As the NFU has previously proposed to both DECC and Defra, this could comprise 4 Mt of straw, 3.5 Mt of perennial crops, and 2.5 Mt of additional forest and woodland biomass. This would make an important energy security and exchange rate mitigation contribution towards total demand for bioenergy feedstocks of at least 40–50 Mt, the balance of which would be mostly imported (with a more modest contribution of around 5 Mt of additional waste-derived feedstocks currently landfilled).
What factors will have to be addressed to ensure that biomass is sustainable and to what extent is it possible to assess the sustainability of imported biomass?
12. The NFU supports practicable sustainability certification for all bioenergy, with appropriate measures to safeguard against excessive administrative burden being placed upon small suppliers—we are a long-standing member of the Government’s working group on biomass sustainability (BABSIG). DECC must ensure that feedstocks of domestic provenance should be able to demonstrate their likely comparative advantage in proving sustainability in competition with imported biomass. The NFU is particularly concerned that any modelling of the operation of international agricultural markets should be realistic and evidence-based.
April 2013