We launched the energy crops scheme on 3 October with a £30 million budget to encourage planting of short-rotation coppice and miscanthus, and to encourage the formation of producer groups in this sector. The Prime Minister recently announced a further £50 million of support for renewable energy, including from biomass. In addition, we are pursuing a promotional strategy including industry events, codes of practice and a dedicated website.
As someone who recently declared a visit to Denmark to study wind power—a very different industry from energy crops, but with some similar problems—may I urge my right hon. Friend to urge our right hon. Friend the Chancellor of the Exchequer to look kindly on energy crops, and to offer additional support, beyond what she announced in the rural development plan, with a more favourable tax regime for biofuels?
I welcome the interest that my hon. Friend has taken and the visit that he mentioned. In the pre-Budget report, the Chancellor issued his green challenge to industry to consider different ways of promoting renewable energies and the use of renewable materials. I welcome that and hope that it will lead to a great deal of worthwhile work in the alternative energy sector.
Let me put the question asked by the hon. Member for Harrow, West (Mr. Thomas) a little more bluntly. As biofuels derive from energy crops, and as the Government have tried to excuse a huge hike of 34 per cent. in petrol duties by saying that it was for environmental reasons, is there not an inescapable duty on the Government significantly to reduce the tax on biofuels, not least because they produce fewer carbon emissions?
I mentioned the initiative that the Chancellor announced in the pre-Budget report. I do not suppose that the hon. Gentleman expects me to make tax announcements in Agriculture Question Time. [HON MEMBERS: "Go on."] Even though Christmas is approaching, I cannot be tempted to that extent. Departments are working together closely. The Prime Minister's initiative, which I announced, involves a considerable sum of money. The Treasury, MAFF and the Department of Trade and Industry are working closely together in this sector. MAFF is doing an enormous amount in that regard, compared with when the previous Government were in office.
In addition to supporting the biofuel system, does my right hon. Friend support the building of power plants where the crops are grown? We should bring jobs into rural areas. There is a proposal to build a massive plant on the outskirts of my constituency, which will bring the fuel from a 100-mile radius and bring hundreds of heavy goods vehicles into my constituency. Will not that defeat the object of environmental improvement? The power plants should be in the area where the crops are grown.
My hon. Friend makes an important point. Without doubt, it is important to look at the travel and transport implications of the strategy. I am glad that Project Arbre is being commissioned in Yorkshire and that a number of Yorkshire farmers are growing short-rotation coppice to supply that power station. There are good examples that we should follow, but we should certainly be aware of the transport and overall cost implications of what we are doing in that sector.