[Relevant documents: First Report from the Environmental Audit Committee, Session 2007-08, HC 76-I; Fourth Report and Fifth Special Report from the Environmental Audit Committee (Government Responses), HC 528 and HC 644.]
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Roy.]
I am delighted that the Environmental Audit Committee's report on biofuels, written earlier this year, has been selected for debate this afternoon. I welcome the Minister to his place, and I look forward to debating the important and topical issues raised in the report. I am delighted to see two of my colleagues from the Committee here as well.
Almost three years ago, the Environmental Audit Committee decided to make climate change its main theme during this Parliament, in recognition of the growing urgency of the threat of climate change and the cross-departmental nature of most issues relating to it. It did so also in recognition of the overriding need, supported by the latest scientific evidence, to keep greenhouse gas concentrations in the atmosphere at levels low enough to avoid dangerous and irreversible climate change.
As part of that work, the Committee decided to explore the role of biofuels in reducing greenhouse gas emissions from transport. Almost a quarter of the UK's emissions come from transport, and that figure excludes emissions from international aviation and shipping. In passing, I stress the Committee's view that the continued exclusion of aviation and shipping threatens to undermine other efforts to tackle climate change. I hope that that will soon be corrected. The Climate Change Bill, whose Second Reading will take place in the House next week, could provide the first opportunity to recognise that international aviation and shipping should be brought within the calculations.
Transport is the only sector in which carbon dioxide emissions were significantly higher in 2005 than in 1990: they increased by 11 per cent. during that period. The Government have backed biofuels because they see them as one means of reducing transport emissions. The idea is that mixing biofuels made from crops with fossil fuels will reduce greenhouse gas emissions from road transport.
As biofuels policy touches on climate change, agriculture, transport, technology, trade and a host of other issues, the report, like many of our other reports, considered issues that cross departmental boundaries. We found that although biofuels such as bioethanol and biodiesel can reduce greenhouse gas emissions, the potential environmental impact of supporting biofuels was not adequately considered before the policy was introduced. We concluded that biofuels are not the best way to reduce emissions using the UK's bioenergy resources, and that there are other, better and more cost-effective ways to reduce emissions from transport.
As most biofuels are produced intensively from agricultural feedstocks, a large increase in demand for such feedstocks might have serious environmental consequences. Natural England recently reported that the natural environment is much less rich than it was 50 years ago. That is due in part to the damaging impacts of agricultural intensification. We found that biofuel support mechanisms are likely to increase the value and therefore the production of intensively farmed crops, adding to the damage that has already been done. We have seen what impact high commodity prices can have in terms of the loss of the set-aside land important for wildlife. It could also cause increased use of pesticides and fertilisers and lead to water shortages. At some point, commodity prices might become so high that farmers choose to opt out of agri-environmental schemes altogether, reversing the environmental improvements that such schemes have so far delivered.
Perhaps more seriously, the policy might also have global environmental impacts. Biofuel feedstocks are internationally traded commodities. Palm oil is one example. Although only a small fraction of palm oil is used to make biofuels at present, existing demand already creates a significant incentive to destroy highly biodiverse rain forests. The United Nations estimates that the combined effects of logging, fire and palm oil production could result in the total destruction of Indonesia's lowland rain forest as soon as 2012. It is therefore utterly wrong to intensify the pressure by creating another market for palm oil, and it is doubly wrong to do so in the absence of effective safeguards to prevent deforestation.
The impact of deforestation is extremely serious. It has been calculated that between 2008 and 2012, deforestation will cause the release of 40 gigatonnes of carbon dioxide. That is more than the total emissions from aviation from its invention until at least 2025. The Government have argued that their biofuel targets are cautious, but meeting the UK's 5 per cent. by 2010 biofuels target could require anywhere between 10 and 40 per cent. of this country's arable land. Using that much land to produce biofuels to meet even that relatively low target, when the impact on emissions would be marginal at best, is simply not justified.
The Government argue that sustainability standards will prevent such environmental impacts. Our report concluded that that is unlikely to work. Research commissioned by the Swiss found that in many cases, the damage caused by fossil fuels might be less than that caused by some biofuels in terms of acidification, fertiliser and pesticide use, biodiversity loss and air pollution. As a result, Switzerland supports only those bioenergy technologies that have a smaller environmental impact than fossil fuels, which excludes nearly all of them. The European Environment Agency came to a similar conclusion, recommending that conventional biofuels should be phased out and replaced with biomass crops that cause less environmental damage. In terms of biofuels' international impacts, there is no effective international system to prevent deforestation or ensure sustainability. Despite that, the Government and the EU press ahead with their policy, ignoring the damage that it will cause.
It could be argued that the negative environmental impacts might be justified if biofuels provide an effective means of reducing greenhouse gas emissions. After all, climate change could have even more disastrous impacts for the natural environment. However, in our inquiry, we discovered that biofuels could be one of the worst ways to use land and bioenergy resources to tackle climate change. In some cases, we found that biofuels might even increase emissions. It is important to follow policies that ensure that land is used effectively to mitigate climate change. To do so, they must ensure that the full range of possible land uses for mitigation is considered, such as maintaining carbon-storing habitats or even recreating habitats on agricultural land.
If forests are cleared to produce biofuels, it could take up to 50 or even 100 years for the biofuels produced to make up for the initial release of carbon. Reforesting land can also sequester two to nine times more carbon over a 30-year period than using biofuels can save. Natural habitats deliver cost-effective carbon mitigation and deliver wider ecosystem service benefits. Perhaps there should therefore be greater emphasis on a biological rather than technological solution.
If it is decided that bioenergy production can be justified in an area, the most effective bioenergy crop should be chosen. The Government have done work on the subject. In developing their biomass strategy, they found that biofuels are the least cost-effective way to use bioenergy to reduce greenhouse gases. Growing biomass crops such as miscanthus and burning them to produce heat and electricity can reduce emissions by more at a lower cost than using the same land to produce transport biofuels. For example, if a farmer uses wood chip grown on their land in a boiler, the cost to reduce carbon dioxide by 1 tonne is £36, but if the same farmer grows wheat to produce biofuel, it might cost as much as £152 to reduce carbon dioxide by the same amount.
In addition to the cost benefits, biomass crops also tend to have lower environmental impacts, and greater volumes can be produced sustainably. Although in some specific cases biofuels might reduce emissions more than biomass, current policy fails to ensure the most efficient use of our finite bioenergy resources—resources that could make a significant contribution to low-carbon energy production if used appropriately.
If we do not use biofuels, how should we tackle the problem of transport emissions? It would appear that policy measures such as behaviour change, better land-use planning, modal shift, eco-driving and simple fuel efficiency might be more effective and cheaper. The Commission for Integrated Transport calculated that such policies could reduce greenhouse gas emissions from road transport significantly without the environmental risks associated with biofuels. We do not say in our report that there is no future role for biofuels. So-called second generation biofuels not produced from conventional crops could have smaller environmental impacts and greater greenhouse gas savings. However, as the Royal Society recently pointed out, current policy will do little to stimulate their development. Instead policy will tend to stimulate and create an incentive for existing environmentally damaging technologies. An OECD report concluded that it is likely to be more cost-effective to support research and development into second-generation biofuels than to create markets for first-generation biofuels.
Such concerns led the Committee to call for a moratorium on biofuels. We felt that until the technology improves, robust mechanisms for preventing land use change are introduced and international sustainability standards agreed, there is not enough justification to carry on with the current policy. However, the impact of biofuels on food prices has further added to the need for a fundamental reassessment of the policy. In April, the International Monetary Fund reported that food prices have increased by 45 per cent. since the end of 2006. There have been riots in some countries as poor people find that they cannot afford basic foodstuffs. Although biofuels are not the sole reason for those price increases, the IMF concluded that biofuel production was seriously affecting food markets. Some 20 to 50 per cent. of certain feedstocks in major producing countries are being diverted to biofuels. The IMF also concluded that less ambitious biofuels policies would lower pressure on food prices.
To their credit, the Government have asked the Renewable Fuels Agency to consider food prices and other indirect impacts of biofuels. I look forward to the report, and trust that the Government will heed its recommendations. Having said that, although I welcome the fact that the Government are seeking to shed more light on the impacts of biofuels, I am concerned that the review will not necessarily investigate all the issues raised in the Committee's report. The scope of the review seems to take it as read that biofuels are an appropriate policy measure. It appears to focus on what measures would be required to lessen the negative impacts of biofuels, rather than on whether biofuels should be supported at all. I seek an assurance from the Minister that the review will examine the wider rationale for supporting biofuels.
We heard in the course of our inquiry that policy makers in the UK and European Union initially believed that biofuels would provide an ideal alternative to farming subsidies as well as delivering environmental and fuel-security benefits. Unfortunately, it turns out that the benefits might largely fall to arable farming, and not in a way that delivers a sustainable outcome. By failing to move away from supporting conventional intensive crops, the UK and EU have failed to ensure that overall land management becomes more sustainable and that we get the most out of our bioenergy resources.
Ultimately, I feel that the Government are in a difficult situation with regard to biofuels. Other EU countries might be reluctant to reform the policy because of the impact on their agricultural sectors. Only robust evidence will counter their arguments. We need to produce conclusive evidence that demonstrates how we can make the most of our sustainable bioenergy resources. That might indeed conclude that there is a role for biofuels, but it might also conclude that support should be given to other bioenergy technologies or to ecosystem management. More emphasis should also be placed on other ways of cutting emissions from road transport, including accelerating the switch to lower-emission vehicles.
Climate change is too big and urgent a problem to make ill-informed policy decisions. More information is needed to ensure that greenhouse gas emission reductions are maximised in the most cost-effective way and to ensure that the UK's fledgling bioenergy industry develops in a way that gives it a sustainable, long-term future. I urge the Minister and the Government to take on board the report's recommendations—even those that they have not initially welcomed publicly. I commend the report to the Chamber.
I welcome this opportunity to discuss the Environmental Audit Committee's report, "Are Biofuels Sustainable?" I thank our Chairman, Mr. Yeo, for presenting such an informed summary of the Committee's detailed work. I am really pleased to see so many Committee members here today and that so many people want to speak. I hope that my contribution will support the Minister in the leadership role that we feel he ought to take in Europe.
Our report is unprecedented: we took evidence, produced our report, gave it to the Government, received their response, and then sent it back again, with the following recommendation:
"Without standards for sustainability and safeguards to protect carbon sinks we believe policies that encourage demand for first generation biofuels are damaging. We reiterate our case for a moratorium on policies aimed at increasing the use of biofuels and urge the Government to resist attempts to increase EU biofuel targets."
We want to put that recommendation in the context of the current debate.
Earlier this week, we debated energy from renewable resources and the strength of the European Scrutiny Committee's report. What came out of that debate was that it is essential to have the right environmental objectives, but that if we do not get the instruments right, we will undermine the whole principle of environmental sustainability. We need environmental objectives and we must do all we can on renewable energy, and sustainable transport and energy, but if the outcome is flawed and brings with it unintended consequences, as are only now coming to the fore, we shall be doing the environmental movement a great disservice.
It is time that the Government took a deep breath and considered how they can use the evidence and scientific base set out by our Chairman to inform the debate taking place on the international and European stages. I make that point in light of the fact that this week is the European Parliament's green week. I would like to share with hon. Members the opening speech made by the Environment Commissioner, Stavros Dimas, when he set out all the different debates taking place in the European Parliament and Commission. He said:
"European environmental policies have delivered immense benefits to Europe's citizens. Their air is cleaner, their beaches and rivers are cleaner and pollutants such as lead in petrol have been banned."
However, he went on to say that
"sometimes we need to take a step back and look at just how far we still are from a model of development that is genuinely sustainable...Biofuels are a good example. This single term covers a wide range of products that are, in fact, very different in their impacts. The carbon saving a biofuel offers compared with a mineral oil fuel can vary from well over 50 per cent. to virtually zero, depending on what kind of biomass it is made from and where this is grown. The same factors make for big variations in the extent to which biofuels add to pressure on land resources or contribute to pushing up food prices. It is for these reasons that the European Union is drawing up binding environmental and social sustainability criteria that biofuels sold in Europe will have to meet".
I know that the Minister takes these things seriously, because many of the issues that we are raising today were flagged up during the statutory instrument proceedings, at which we were both present. Many of the concerns that subsequently became evidence in the Committee's report were present in that debate. It took place a couple of months ago, and now we have the weight of our Committee's report, which I hope will give the Minister ammunition when he takes part in all those debates in the European Commission, so that he can use our evidence and share our concern that, at the very least, there should be a moratorium.
I am conscious that over the weekend there is an EU Energy Council, at which the Government will be present. I should like the Minister, during today's winding-up speech in response to the report, to say how he will use the Gallagher report, which the Government commissioned, to inform the EU Council debate this weekend. I should like him to confirm for the record the current situation with the Gallagher report, because my understanding—borne out by the statutory instrument debate about renewable transport and the fuel obligation—was that the Government would conduct various reviews and ask Ed Gallagher to produce the report, which he would then use to help us reach the sustainability standards that we want.
I understand that the report is due out on
The most important point is that we must have sustainability standards. If we are to have them by 2011, and we are introducing the obligation for biofuels but do not have the sustainability standards in place now, that will have a real impact and undermine all that we are trying to do. It might stop us developing other transport policies that could get us to where we need to be without going down that route. It is also essential that the industry has some certainty and knows which direction to take.
The most important thing is that we establish the sustainability criteria, and then we can see exactly what part biofuels have to play. In the meantime, I urge the Minister to look very seriously indeed at our proposals for a moratorium—at least until we have those standards.
It is a pleasure to see you in the Chair, Mr. Amess, and to register my support for the report by the Committee, on which I serve. I apologise in advance, because I shall have to leave the Chamber before the end of the debate.
What strikes me about the context of the debate is the degree to which the ground has shifted, and continues to shift very fast indeed. The context, as the Committee Chairman, my hon. Friend Mr. Yeo, clearly set out, is the imperative of climate change. In that context, what has changed since Governments started to formulate policy in the area is, as the scientists tell us, that the problem has got bigger and the urgency greater. What has also changed is that the gloss has started to come off the UK's performance, as it has become clearer that emissions have risen, not fallen, over the past 10 years, and that the transport sector, which we are discussing today, remains absolutely stubborn in terms of our ability to reduce emissions from it.
A further, recent, change is the mood music around biofuels, which some years ago were seen as a win-win opportunity to create benefits for the agricultural sector as well as for the environment. That has unwound dramatically over the past year. Another change is the economic context of the debate: the economic prospects for the UK and the world, and public finances.
The central theme that I shall address is the cost-effectiveness of policy, which underpins my belief that the Government must think much more carefully about biofuels, because they are vulnerable, nowhere more so than in the renewable transport obligation and the renewables obligation. I shall compare the two instruments, because they are structured in similar ways. I am encouraged to make that comparison by the Minister's remarks in evidence to the Committee when he was pressed on whether he felt that the biofuels policy would be cost-effective. He said he hoped that it would be at least as cost-effective as the policy on wind farms. That filled me with horror, because the facts tell a different story about the cost-effectiveness of the Government's policy on renewable energy and wind farms. That is relevant because the renewable transport obligation is structured in a similar way and has been lacerated by independent organisations such as the National Audit Office and Ofgem in respect of its cost-effectiveness.
I am afraid that the facts now speak for themselves: we have one of the lowest deployment rates for renewable energy in the European Union. It costs British taxpayers—our constituents—£1.4 billion a year. The cost per tonne of CO2 abated is estimated to run at well over £100, compared with a price in the European carbon markets of about €26. Rather than stimulating next-generation technologies, the policy is shunting public money towards mature and controversial technologies such as onshore wind. It is controversial because of the public's limited acceptance of the technology and, in terms of overall contribution to greenhouse gas emissions, because of its intermittency and the need to have back-up conventional energy to support it.
The policy was undermined by the Government's failure to put in place necessary complementary planning process and grid access policies. The problem is worse when one looks at what the European Union encourages us to do, quite rightly, considering the scientific context of the debate. The EU says that we need to go further and faster with renewable energy. Its targets set an enormous challenge for the country, which, as we now know through leaked documents, the Government acknowledge will be very demanding and, presumably, expensive. The Government are reluctant to reform existing policy instruments for fear of unsettling existing investors.
That is an interesting intervention. While we are making comparisons with other countries, my hon. Friend might be interested to know that one town in Germany, Freiburg, deploys more solar power than the whole UK—a powerful statistic that underlines the weakness of existing policy instruments to support renewable energy in the UK.
My point is to preach caution on the renewable transport obligation, because it is structured in a similar way. On the level of subsidies, the Global Subsidies Initiative, in evidence to the Committee, referred us to its report, "Biofuels—At What Cost?", which found that in 2006, the EU and individual member states subsidised biofuels by about €3.7 billion, taking into account all support mechanisms. The figure is set to rise, given the direction of travel of public policy throughout Europe. The GSI estimates that the cost of biofuels policy per tonne of CO2 abated is 10 to 20 times that of the carbon price in the markets. It cites, for example, the cost of obtaining a reduction of 1 tonne of CO2 equivalent, using ethanol from sugar beet, at between €575 and €800, and at more than €600 for biodiesel made from rape seed.
As with the renewables obligation, public money is focused not on second generation technologies, but on first generation biofuels, with very little differentiation according to their carbon efficiency and integrity—if I may use that expression. As with the renewables obligation, there has been a lack of preparation and groundwork for the implementation of policy. There is a lack of mandatory sustainability standards that mean anything, and a lack of thinking through the consequences, as the Chairman put it, in relation to the impact on food prices and damage to the wider environment.
Unthought-through, badly implemented policy carries a tremendous risk of alienating the public. The mood music has shifted in relation to biofuels, and I am concerned that we run the risk of labelling all biofuels as bad and of alienating the public from the debate, as happened with genetically modified crops and other issues. The report stresses that there is room for the right types of biofuel, and we want public policy to focus on supporting them. I completely support the messages of the report, which are to proceed with caution and, just as important, to preach caution at the EU, where there has been some change in rhetoric from the Commissioners. However laudable the principles and objectives behind the stretch targets that have been set, they none the less raise important issues.
If we are to proceed, let us do so on the basis of robust standards of sustainability—not before we have them. Let us proceed on the basis of much better co-ordinated policy across Europe that focuses public money on technologies that will make a big difference at an acceptable cost. We should not see biofuels as an agenda for channelling soft subsidies to the agricultural sector, because the public will not wear that. Woolly, unthought-through policy carries the danger of alienating the public at a time when it is critical to engage them with climate change. I urge the Government and the Minister to think again.
It is always a pleasure to speak in Westminster Hall with you in the Chair, Mr. Amess. I extend that compliment to Mr. Yeo, whom I congratulate on securing the debate and on publishing a thoughtful paper on the sustainability of biofuels.
Many of us—not only Members of the House, but other people—are talking about climate change, transport costs, greenhouse gas emissions, land and food scarcity, food prices and deforestation. We are discussing the fact that the west is benefiting while the east is certainly suffering. Those comments have been made time and again, and they all feature in today's debate, which is important. I support biofuels and the work that has been done to date, but I accept that there is a critical need to ensure that it is sustainable in terms of land usage, food and food prices. We are moving in the direction of achieving sustainability through the delivery of a biofuels policy that is of value to us all.
I have companies in Teesside that are very much involved in the production of biofuels. I would hate anyone to believe that a non-scientist would think that she has a very clear and careful understanding of what is going on in the biofuels world simply because she shows an interest. I do show an interest, but my companies are very informative. Some people might see that as a conflict of interest, so it is important that I state that I have knowledge of and a relationship with companies such as Ensus, Agrovista, SembCorp and Petroplus. All of them have, in their different ways, produced information knowing that this debate would take place today. The hon. Member for South Suffolk smiles knowingly, and he is right to do so. Of course, we all want to support our areas. We think that our work is important and, consequently, we want to ensure that the full facts are presented. I shall therefore attempt to produce some facts that are different from those outlined in the excellent report. I do so having knowledge of the companies that I have mentioned, but I should like to persuade the House that I am no easy pushover.
It is not inevitable that I would support companies on Teesside just because they are in an area through which I travel to work—they are not in my constituency—but the work that I have seen being done with waste products, rape-seed and wheat is based on rigorous scientific research. I am absolutely convinced that when I read scientific documents from those companies, they present information factually and carefully. I believe absolutely that those companies have integrity. Of course, they want to develop and produce, but they also want to believe that they are doing something of value in Britain. I have no doubt that at the end of the debate, either the hon. Member for South Suffolk or I, or both of us, will be presenting my companies with the information that his Committee has produced. We will also want answers. It is crucial to this complex debate that we have answers.
The companies that I have mentioned are rigorous and have integrity, and I know from my conversations with them that they, too, are concerned that sustainability is an absolute. They are pinning an awful lot of their hopes to deliver sustainability on the reporting mechanism that has been put in place. That mechanism requires that, at every point, all that is being done within the science is known within the community, so that we know whether there are downsides to the science as well as upsides. I am equally aware that we have to be cautious, because the reporting is referencing the renewable transport fuel obligation, and there is a sense that the relevant body will want positive rather than negative outcomes. Nevertheless, reporting will be fair, accurate and comprehensive. They tell me that if Europe produces a renewable energy directive, they will support it.
We have a serious problem. There are no doubts about oil and energy scarcity, and food prices and food scarcity issues are absolute. I am aware of the problem, and know that we need answers, but I do not want a solution that might last a few years and then we are sunk again. That is the last thing that any of us in this House wants. Today, I am trying to persuade the House that my companies are careful in their scientific exploration and in their delivery—I hope that I am succeeding in part, if not in total.
I highlight in particular Ensus's evidence on the indirect effects of biofuels in relation to a study by the Renewable Fuels Agency. The evidence that I have found has been confidently and carefully outlined, and it adds to the debate. It is factual, but what really strikes me, as a non-scientist, as being valuable is the fact that that evidence is to be scrutinised carefully by a peer review. All of us who have ever been involved in peer reviews know that if there is anything critical to be said, it will be. For most of us, there is nothing better than telling others in the same profession, "You've got it wrong." The peer review is therefore very valuable.
On that basis, I want to persuade hon. Members to consider Ensus's evidence that sustainability is a factor and that viability is an absolute factor. I suggest that they look at some of the evidence that the company produced, because the work that it has completed and the work that it is doing make it clear that biorefining wheat in the right way can already achieve greenhouse gas savings of in excess of 60 per cent., compared with the continued use of fossil fuels. That is a very real bit of information, and we must look at it. If validated—indeed, it has been today—it must contribute significantly to the debate on this issue.
The company's information also notes that the effective use of wheat protein concentrate—the co-product of biorefining—as animal feed can significantly improve the efficiency of the food chain in Europe. That gives rise to the further belief that using wheat protein concentrate in that way can release land outside Europe that is currently used to grow soy that is imported into Europe for animal feed. Releasing that land will have a serious impact on reducing the pressure that leads to deforestation, and that is valuable information. It compares with the information in the Committee's report and should be put into the mix when we decide whether to continue with and invest in biofuels, as I hope we will. It is clear from my reading of the Ensus and Petroplus reports that we could achieve fuel security and carbon savings if we can be absolutely reassured, as I am, that this is the way to proceed.
As I said, I will put the Committee's report into the hands of my companies. I want answers, because this debate cannot be a one-off. I am concerned when the hon. Gentleman says that first-generation biofuels are inefficient. I am concerned when people say that carbon emissions from the machinery used in agriculture and from soil disturbance are problematic in terms of carbon emissions. I am concerned when I hear that nitrous oxide emissions from fertiliser applications and emissions from the energy used to convert feedstock into liquid fuel are problematic. I am concerned when I hear that the transport of feedstocks adds to carbon emissions, rather than reducing them. Those serious criticisms must be answered.
When the hon. Member for South Suffolk says that he is concerned with the change in land use, however, I find his argument less convincing. Farms in the north-east are going through a vibrant period, and they know that there is much more to come. Farmers are being given a lifeline that they have not had for years. I am not, therefore, awfully convinced by the hon. Gentleman's criticism.
The report says that food security and demand for biofuels have led to higher commodity prices, but I would ask the hon. Gentleman to put other things into the mix. How about poor harvests? How about animal diseases? How about demographic changes? How about the fact that we in Great Britain waste 40 per cent. of our food? If we are to state the case, let us do so completely, not in part. It is important for us all that we do that.
The hon. Lady is right to identify the reasons for recent rises in food prices, but in the evidence that we received, the UN special rapporteur on the right to food described the production of biofuels in terms of a crime against humanity. Does the hon. Lady not accept that if someone in an expert position takes that view of the issue overall, there must be very serious concerns, which cannot be dismissed?
I am sorry, but I am far too old to accept experts per se. The hon. Lady said what she did with serious integrity, and I respect that absolutely, but I am far too old—I will not say how old I am—to be taken in. Over the past 40 years, I have seen many expert reports that have been shelved. I do, of course, take note, but I am not absolutely convinced.
To conclude, I cannot support the Committee's recommendation that a moratorium should be placed on the work and research that is being done on biofuels or on their usage. The technology is persuasive, and I am looking forward to much more being achieved. We have an urgent problem. On the whole, climate change is destructive, and it is time that we put our minds to tackling it. Our energy demands are increasing significantly, but supply is decreasing. We must therefore press ahead with biofuels and hope that they achieve all that they are capable of achieving.
As always, it is a pleasure to serve under your chairmanship, Mr. Amess. I congratulate Mr. Yeo on introducing the debate, and it is good to see many members of the Committee here. It is also good to have the input of hon. Members who are not on the Committee. I always think that it is useful for Select Committee reports to have a wider airing in such Westminster Hall debates and for us to have contributions not only from those who have sat through all the evidence sessions.
This is a timely debate, although that is perhaps fortuitous, rather than necessarily by design. The Committee's inquiry took place at an important time in terms of the issue of biofuels. As we took our evidence in the months leading up to the publication of the report in January, there was a huge amount of public and scientific debate about the issue. More and more organisations came out and reached some of the same conclusions as the Committee. Whether it was the Royal Society, the UN, the OECD or the Government's own chief scientist, more and more people and organisations questioned the wisdom of our relentless pursuit of biofuels.
I joined the Committee last July, and this is the first time that I have served on a Select Committee; indeed, this is one of the first full inquiries that I have sat through. Having spent two years without being on a Select Committee, I found the experience incredibly refreshing. In politics, we generally take a position and then justify it. What I enjoyed about being on a Select Committee was that we took an issue in which we were interested, listened to all the evidence and then took a position. If there were more debates like this, and if the work of Select Committees got more publicity, the reputation of the House might be somewhat elevated in the minds of the general public.
I am interested in the environment and I am keen to tackle the problem of climate change. Before the inquiry, my general view on biofuels—I was not particularly informed, beyond reading the newspapers—was vaguely positive. They seemed quite a good idea, because we have major problems with pollution from road transport, and there seem to be few easy ways to wean ourselves off our addiction to the car as a means of getting around. Biofuels would seem to be a sensible way to solve part of the problem.
My only other experience of biofuels was about seven years ago, when I was living in Yorkshire. A friend was involved in a company that produced biofuels from used and waste cooking oils and was lobbying the Government to introduce a lower fuel duty on biofuels and make them a viable prospect. I thought that that was a very good idea and was delighted when the Government made that tax change and enabled such companies to prosper and sell their product to the market.
That was my initial view as I began the inquiry. However, I have been quite surprised by the evidence and the conclusions I have reached on biofuels. On a superficial level, we can all agree that the idea is sound, and that there are many biofuels, as we learned in the inquiry, that are in all ways good for the environment. Used cooking oil is one such instance. Rather than being treated as a waste product to be sent to landfill or pollute our waterways it is reused, and there are not the negative effects of land use change. That is definitely the type of product that we should support. Similarly, Brazilian sugar cane seems to tick all the boxes for sustainability and the efficiency of the product. The evidence that we heard was to some degree mixed, but there seems to be some cause for optimism about second or third generation biofuels and the possibility in future of harvesting more of the plant and getting a much better carbon reduction for the same amount of crops.
There is definitely some merit in the biofuels arena, but the damaging effects have been well documented—and highlighted in the debate today. It is not always certain that there will be overall carbon emission reductions, because of the amount of fertilizers and oil-based products that go into producing biofuel crops in the first place. There is an impact on food production and availability around the world; as we have heard, what is happening has other causes too, but I do not lightly dismiss the view of the UN expert I cited, and we would be unwise to do so. From a general, common-sense point of view, it is logical to conclude that if a farmer will get more money from growing biofuel crops than from growing food, with a consequent change in land use, there will be an impact on food supply in other countries, and particularly in some developing countries where there are general food shortages and great problems. The related issue that really struck me was deforestation, and the clearing of land for the growing of biofuels. Of course, we know that deforestation is one of the biggest causes of carbon emissions. About a fifth of the world's carbon emissions each year come from that, so it is hardly smart to clear forests to grow biofuels to make some reduction in the carbon emitted by road transport.
In the light of all those issues in relation to biofuels, it would seem clear that we need robust sustainability and emission reduction standards, so that customers can be certain when they buy fuel containing an element of biofuel that it will reduce a vehicle's overall emissions, and that it has been produced in a sustainable manner. That is why, as the report outlines, it is a matter of great concern that we have gone ahead with the target this year before those standards have been established. That rush is one mistake.
Another worry that arose in the evidence sessions was about trying to work out whether it is possible to create sustainability standards that are robust enough. It might be possible, and is more likely, in the case of UK production, where we have more control over regulation and accountability. However, how is it possible for sustainability standards for biofuels produced in other countries to capture the prospect, not necessarily of deforestation to grow biofuels, but of changes in land use from food crops to biofuels, followed by deforestation to grow food crops? The causal links may not be clear; they may be impossible to capture within sustainability standards. That is hugely likely to result in an increase in overall emissions. Until we manage to deal with such thorny issues about sustainability standards it is difficult to know how we can be confident about reducing emissions by going ahead with biofuels.
The value for money issue has rightly been raised. Mr. Hurd talked about it. The amounts of money that we are considering are very significant. From the renewable transport fuel obligation alone £500 million of revenue is lost to the Government. We must ask ourselves whether that is the best way of using £500 million to reduce emissions and tackle climate change. We need to consider the sums being spent on other initiatives and the results that can be achieved from promoting better, environmentally friendly driving, or energy efficiency. The latter is always the Cinderella of the climate change arguments, because everyone agrees that it is the best and probably the cheapest way to tackle climate change, but it is at the bottom of the pile for allocation of money and resources. Another suggestion made in evidence for improving the way we use such sums of money to tackle carbon emissions was avoiding deforestation schemes, or, indeed, using reforestation schemes to set up more carbon sinks. The value for money question has been left very much unanswered.
I understand why biofuels seem such an attractive solution from the point of view of the Department for Transport, and the elegance of being able to tell people they can keep driving and continue with the same behaviour, and that that will be fine because we shall reduce emissions none the less. There is a place in policy making for ensuring that people can continue with some of the same behaviour, but reducing the carbon impact of that. Indeed, some of the work that is happening in Europe and that the Government have been promoting, on cleaner vehicle standards, is a very good example. Obviously, that is a pain-free way to reduce emissions. However, it is not a silver bullet and we must also grasp the nettle of behaviour change. Some of the relevant resources might be better spent.
Ms Taylor talked about the priority for tackling climate change, and the Committee focuses on little else in its inquiries. I know that all its members are very committed to tackling climate change. What we were trying to explain in our report was that biofuels may not be the best way to do it, and that there are many other alternatives that we could pursue with the same resource, which would be more cost-effective. Given all the problems I have described, the current targets, by pushing and rushing towards biofuels, are counterproductive. That is not to say that biofuels cannot play an important role. However, we need to take stock and halt our rush towards biofuels until we can iron out some of the problems.
The Government, to their credit—it is not often that I say that—announced in February that they would review biofuels. That is very welcome. Governments are often criticised for U-turns, but it is not a sign of weakness to change one's mind when the facts change. The situation in the past few months has been changing rapidly. Many more reports and documents and much more information have been available to highlight the concerns. The issue is not for the Government only, as has been mentioned. It is an EU issue, because we are tied into the targets through the European Union. Indeed, the EU has been taking the lead on climate change in a global way. I am sure that the targets were put in place for the right reasons, and that that was very well meaning. However, the science has moved on somewhat, and we have a different understanding of biofuels. It is time to revise the targets down, until the sustainability concerns have been addressed. I hope that the Government will use their voice in Europe to discuss with our European partners how we can progress the issue at European level, stop the rush, take stock, and make sure that sustainability standards are in place and the issues are dealt with, before we go headlong into promoting biofuels.
I know that the Minister has a genuine desire to reduce transport emissions. The importance of the issue on both sides is symbolised by the to-ing and fro-ing of reports between the Government and the Committee, trying to see whether they can reach a common position. The Government have started to move on the issue, and I encourage them to move further and recognise that we need to stop the rush towards biofuels until the serious and real concerns about sustainability have been addressed.
I will not detain Westminster Hall long, Mr. Amess. I pay tribute to the Select Committee for its report, which makes some very interesting recommendations. Obviously, it is in some dispute with the Government over how it wants to go forward.
May I also plug my own Select Committee, the Environment, Food and Rural Affairs Committee, which, if nothing else, got in first? We considered climate change and the role of bioenergy a couple of years before the Environmental Audit Committee. I do not want to get into Select Committee wars, but we are considering a moveable feast—something that has a different context now. The two Committees, however, came to somewhat different conclusions. I wish to dwell on a few of the issues at the heart of those differences.
Clearly, we can agree on some things. We were quite agnostic about the current generation of biofuels because we did not see them as a long-term solution. That was why there was a big call to go to the second generation as quickly as possible, particularly, and crucially, for air transport. We considered the notion of synthetic kerosene in some detail, but I will not bore the House with trying to explain what that can do. It certainly has opportunities.
As part of our inquiry, we visited Brazil. In a sense, Brazil is central to our dilemma. We can all put up our hands and say, "It is terrible what is happening to the Amazon." We all sign our petitions. We probably all send out these NGO cards to ourselves about what we must do to forestall this terrible degradation of our world. Yet, at the same time, one of the reasons why the Brazilian economy has been so successful is because it began to use molasses, a by-product of its sugar industry, to form bioethanol, which went into producing hybrid cars, and we were in complete awe. Basically, the Brazilian Government went to the car manufacturers and said, "You will, over a period of time, increase the blend, otherwise you will not produce these cars in this country." That was the slap of firm government. Obviously, there are dangers in that, but they proved that they could take on an industry and change the nature of the world in so doing.
We now have biodiesel blends. The first garage that introduced the blend is in my constituency—I won't embarrass them by saying where it was. Now biodiesel is offered as a matter of course. My key point, and I do not want to labour it for long, is that we considered issues around the biomass taskforce under Sir Ben Gill. I will be very careful what I say because the Opposition spokesperson is here, but agriculture was on its knees—it is always on its knees—and this seemed a clever ruse to rebuild the arable sector. Three years on, we have extremely rich barley barons—as I said, I will be very careful. Three years is not a long time in policy evolution. Yet we have seen a huge change. We are now talking about food shortages, the price of food and people whose income was on the floor three years ago being the richest people in the country.
Does my hon. Friend also accept the findings of the Renewable Energy Association that the additional land needed for biofuels could be 75 million to 220 million hectares? The important point is that that will account for 2 per cent. of productive land by 2030. Will my hon. Friend acknowledge that we are not talking about taking masses of land away from food production? We are taking a very small amount.
My main justification for speaking today is to argue for some balance in the way in which policy evolution takes place, for that reason. Of course the biofuels policy has to be sustainable. It has to be sustainable not just here but in the wider world. Again, I am sure that this debate has to be had in Brazil. If it is not, then, to me, the choice between death by poisoning or death by slashing our wrists is still death. If we suddenly believe that we have to do something about food prices because that is the only problem now facing us and we then forget our carbon obligations, it does not save us in the long run because we are going in the same direction.
The absolute fact for all of us in the House is that if we do not start sorting out the common agricultural policy, we will be talking about food prices when our children are as old as we are. The fact is that we have mountains of goodness knows what, but the prices are kept high.
Of course, I agree with that. As a dyed-in-the-wool Eurosceptic, everyone would expect me to agree with that. I am glad that everyone has come around to my point of view. My hon. Friend Mr. Mitchell and I will go to our graves happy that we have reconverted our party to the position it should be in as regards our position in Europe. Never mind; we can live in hope.
I agree entirely with my hon. Friend Ms Taylor. I do not know whether she has read my notes—I cannot read them because they are such a scribble—but she has taken away all my key points. I can more or less sit down and shut up. It is not because of our biofuels policy that we are in this mess; it is the fact that we have a completely insane agricultural policy and, more particularly, that we do not have a food policy. If we could get a national food policy, let alone a European or world food policy, we might be able to do something and have some context to make some sensible decisions on bioenergy, biofuels, biomass and the rest of it.
I will put my hand up here. I am one of those who argued for the renewable transport fuels obligation. I know that politicians do not like to take responsibility for anything because it is much better to say, "It wasn't anything to do with me, Guv. I was always against it." Occasionally, however, we have to stand up and be counted. Three years ago when we did our report, and subsequent to that, there was a group of us who said that the problem with the Government was that they did not get the message; they were not moving fast enough in this area. We were saying that bioenergy had to be part of the solution, and that the only way to make it part of the solution was for us to kick-start it. It was only in April that we got the culmination of that with the RTFO coming into place.
I have been listening very carefully to my hon. Friend. Does he agree that it is important that we have a vision and a goal and that we take action? However, when we take that action it is important that we put in the necessary sustainability standards; otherwise, that action will distort the very objective that we seek to achieve. I agree with him that we need those standards, but we need to get them right. We do not want the Government to rush ahead until they have the standards and safeguards there.
It is easy to agree. There is no point in having a policy that is counter-productive. Of course, I would argue that we have to be clear about our standards. However, to be fair—and I sympathise with my hon. Friend the Member for Stockton, South—we have firms up and running in this area which believe that they are doing the right thing because they were given the policy lead from this place, with some of us kicking the Government up the backside and saying, "You are not going fast enough, far enough and firm enough in terms of policy", and now we are saying that it is the wrong policy. It is easy for us to say, "We have lots of wrong policies"—some of us would argue that we have wrong policies in some areas—but occasionally we have to be honest and say, "Okay, we may have got it slightly wrong, but we cannot keep changing policies; otherwise, the instruments with which we are trying to encourage the changes to happen, to deal with the thing called climate change, will become confusing and it will be so messy out there." It is not just hon. Members who are saying that. If we had that much power as parliamentarians, all hon. Members would be here doing whatever they do to the best of their ability, feeling that they were great agents for change. The agriculture people were arguing that they wanted the changes because, as I said earlier, they felt that they had to get greater investment to use the land for things other than food.
There is also the biofuels industry to consider. I am sympathetic to that industry. A number of firms have set up in that area and have been successful in encouraging the use of biofuels. However, the non-governmental organisations are also involved. I have to say that it is easier for them to suddenly change sides than to manage Chelsea! That goes on as day follows night. I remember being lobbied and it was not just happening for me. My hon. Friend Paddy Tipping, who has been the greatest advocate in the House for what we tried to do, and I were being pushed by NGOs to say, "You've got to realise your climate change obligations and bioenergy is one of the ways in which you can do that." Okay, we may have got it wrong: we may have needed to graduate this and we may need more balance in the arguments.
I shall now return to what I was saying, because I have gone out of kilter. If I read my notes I might get back into some semblance of order. The problem is not biofuels, which are a drop in the ocean, relatively speaking in terms of land use; the problem is that we have failed to address food security. I have some ownership of that issue, because I had a debate in this Chamber on Tuesday on food security, in which I tried to make that point. The Government responded well, saying, "Yes, we've got a problem; we've got to do something about it." It is not just a British problem and is certainly not just a European problem: it is a worldwide problem.
But calling for a moratorium is a bit like chucking the baby out with the bathwater. It is not as simple as saying, "Let's have a moratorium; it's the easy way out. Let's just produce more food", because all hon. Members know—my hon. Friend the Member for Stockton, South mentioned it—that food is wasted and that a cheap food policy has not always delivered all the things that we wanted it to.
All I am asking for is some balance when looking at the arguments, some stability in policy evolution and some guarantees to companies that are taking a risk and investing in this area, but now, all of a sudden, are being told that they should forget the obligation from April, because they will not get any more investment owing to the policy being changed. Given my politics and from my perspective, I can be a bit rude to business now because I have already been a bit rude to farmers. I am not sympathetic in this regard just because people take risks. However, it is a bit worrying when the context of that risk is entirely driven by something external to themselves and they are told a message which then changes completely. I could go on in the same vein as my hon. Friend about companies that have been in that position and now feel a bit uncertain, to put it mildly.
To me, biofuels were never the answer. How long does a Select Committee report last? Probably less time than my Select Committee thought ours would last, because ours was a bit more optimistic and progressive in respect of where we saw the opportunities for biofuels. We may have been too optimistic, but considering this matter purely pessimistically and saying that biofuels are no answer at all to the problems of reducing carbon is unduly negative. We must get other things right. We certainly have to get the agricultural subsidy regime right, because although it might be daft to subsidise agriculture in the way that we do, it is certainly daft to subsidise alternative non-food production. However, that is because we have got the subsidy regime wrong; it is not to do with biofuels per se.
I hope that my contribution has been helpful, even if I have brought a note of rancour into these wonderful consensual debates.
It is a great pleasure to serve under your chairmanship, Mr. Amess, and to have the opportunity to contribute to this most important debate. Mr. Drew rightly mentioned the need for balance in the debate. That is crucial, because what we are talking about is self-evidently not a black and white issue.
I thank Mr. Yeo and the Environmental Audit Committee for their hard work on the topic, which is especially relevant in the context of the European Union's current consultation on a directive on the issue. We can no longer afford to get our environmental policies wrong. We all agree that climate change needs to be tackled effectively here and now. The Committee's report is useful and gives us insights on the background to biofuels.
I should make it clear from the beginning that, although I agree that the report lays out in some detail the problems that can be caused by biofuels, the Liberal Democrats believe that those problems are surmountable and that the United Kingdom cannot afford to write off biofuels altogether as a viable option for powering transport. We are, therefore, not minded at this stage to support the Committee's call for a moratorium. We Liberal Democrats believe that there is an important role for good, sustainable biofuels to play in the UK transport fuel market and that abandoning the targets completely would be a step backwards for the UK's sustainable energy industry and for its ability to control its carbon footprint.
All hon. Members are, of course, aware that transport is responsible for roughly a quarter of the UK's total carbon emissions, with road transport alone responsible for more than 21 per cent. That figure has not decreased in recent years, but has risen as more people have cars and use them more often, so it is vital that Britain is carbon neutral by 2050, including transport. We therefore need a solution—or perhaps I should say solutions—to the problem of powering transport, especially road transport.
As hon. Members have said, new technologies are developing all the time. Just a few years ago only one hybrid car was available in the showrooms—the Prius—but now the consumer can choose between many models. There are also advances in electric cars that could come from entirely green energy sources, including hydrogen technology and, of course, sustainable biofuels. There is other encouraging news. Yesterday, I noticed in the Financial Times that for the first time in 26 years the Ford pick-up truck was replaced as the USA's No. 1 seller by the smaller, more environmentally friendly Honda Civic. In the UK we have seen a dramatic increase in the sales of hybrid cars. Those facts point to a positive trend. People are starting to vote with their feet and their wallets on environmental issues. We need to take advantage of that movement to help cut carbon emissions as much as possible.
Despite certain media reports, it is too simplistic to generalise about whether biofuels are a good or bad thing. Of course, we are well aware that biofuels are not completely carbon neutral as yet, but they can create carbon savings when compared directly with fossil fuels. Whether they create carbon savings, and what the size of those savings is, depends entirely on how and where the raw materials are grown and how they are converted into biofuels and then transported. The true carbon cost of any biofuel can only be calculated if the carbon cost of growing it, including the machinery and fertilisers used, converting it and then transporting it are all taken into account. We must include the carbon cost of any change in land use.
There are other environmental and social costs attached to biofuels that are important for us to understand, acknowledge and attempt to address. If biofuel farms replace rainforest or peat land, it can take hundreds of years to replace the carbon cost. The unique eco-systems, wildlife and biodiversity of that land can never be replaced. We cannot and must not allow the use of such land to continue.
Biofuels also compete with food for the land that is used to grow them. Just this week, as was mentioned earlier, concerns were expressed at the UN food summit in Rome about the security and scarcity of food supplies. Although I am sure that biofuels are not the only or main reason for the current food crisis facing the world, using land currently utilised for agricultural purposes to grow fuel—almost literally—can only exacerbate the problem. We must work to ensure that does not happen.
The problems are real and serious, and they are troubling for anyone who advocates the use of biofuels, but we firmly believe that they can be minimised if good standards are firm and regulations are put in place. Like the Committee, we believe that a total moratorium on the UK's 5 per cent. target for the use of renewable fuels is not only impractical if we want the UK to reach its CO2 reduction target of 60 per cent. by 2050, but also that it is not sensible if we wish to make further developments in the field of sustainable technology. The truth is that companies will simply not invest in research and development for sustainable fuels and carbon-saving measures if they do not believe that the United Kingdom Government are serious about carbon reduction.
The problems can be tackled in other ways that could allow biofuels to be used. As it stands, the renewable transport fuel obligation is not doing enough to ensure the sustainability of the biofuels that we are using. We need stronger certification and sustainability standards that will incentivise energy companies to ensure that the biofuels provided come from the best and most sustainable resources. As the report clearly indicates, carbon savings from biofuels are possible. Some UK biofuel factories already run an incredibly good sustainable business and produce high quality biofuels. According to the Renewable Energy Association, British Sugar in Wissington, Norfolk—to name but one such company—produces a biofuel from locally grown sugar beet that, including all the carbon production costs, has a 71 per cent. carbon saving over fossil fuels.
The Government should set a minimum standard of 50 per cent. carbon saving for biofuels when compared with fossil fuels, and it should be in place now. In our view, anything below that level would be unsustainable. Although we welcome the idea of rewards being linked to CO2 emissions caused by producing biofuels, such a system should already be in place and we should not have to wait until 2010. In addition, we should not—nor should the European Union—subsidise fuel from unsustainable resources, as we are currently doing.
In terms of the headline report that the hon. Gentleman has given and the detailed aspects of his contribution, will he tell the House which of the Committee's recommendations he disagrees with?
I would be delighted to, and if the hon. Lady could be a little more patient, I shall come to that point. At the beginning, I said there was a need for balance in this debate. I am trying to say that an awful lot of the report makes eminent good sense, but that there is a different side to the matter, as Labour Members have already indicated.
As I was saying, we should not subsidise fuel from unsustainable resources, as we are currently doing, for example, with most of the bioethanol we get from the United States. Energy companies have the opportunity to buy their biofuels from good suppliers, even if they are sometimes understandably more expensive. It is therefore vital that incentives are put in place now rather than in two years' time to encourage the production and purchase of high-quality sustainable biofuels that have the highest CO2 savings and the best environmental credentials possible. The key point is that the renewable transport fuel obligation must be recalibrated so that suppliers get a better financial deal when more carbon is saved.
Similarly, sustainability standards should be mandatory from now on and should not be postponed until 2011. If the Government set strict environmental standards, the fuel companies will have no choice but to face up to their obligations to meet them. To delay action on that issue—like delaying action on any environmental issue—would damage the very environment that we are all trying to protect.
I shall give a further example of where regulations are too lax. Currently, when reporting on the biofuels they supply, energy companies can claim that they do not know what the land that they are using to source biofuels from was used for previously. That is not only ridiculous, but incredibly irresponsible. Companies should not source goods if they do not know the conditions in which they are being produced. To do so is the equivalent of high street retailers in the west sourcing goods from sweatshops in the far east and pretending they do not know that the workers are paid a pittance for their efforts. Will the Minister explain why that ignorance loophole exists and tell us whether he agrees that it can be used to hide where some biofuels are in reality being produced?
To ensure that biofuels are not replacing valuable natural habitats or carbon sinks, there should be a punitive presumption in the biofuels standards. If energy companies cannot confirm where the biofuels are from, they should be classed as replacing rainforest, and therefore deemed unacceptable. Such a premise would ensure that energy companies take seriously their obligation to confirm that the biofuels they are selling come only from sustainable sources that do not harm natural habitats.
I thank the hon. Gentleman for his intervention. Many of the opinions of some his colleagues on this subject would not necessarily tick every box and meet every criteria of every international organisation. I could certainly spend a great deal of time citing other organisations that support the continued use of biofuels—although with the improvements to regulation and classification that I have talked about.
To allow energy companies simply to tick the metaphorical "don't know" box turns a blind eye to the environmental problems that biofuels are trying to solve. The onus should be on the providers to ensure that their biofuels come from sustainable sources. On a connected topic—in agreement with the Stern review and the report we are discussing today—it is important that, alongside the RTFO, the Government work to promote an international commitment to investing in carbon sinks. Will the Minister tell us what, if anything, the Government are doing to further that particular suggestion from the Stern review? Does he agree that without a commitment to biofuels now, second and third-generation biofuels will simply not be developed in the future?
Second-generation biofuels, such as jatropha and cellulosic ethanol, work to extract energy from the whole of the crop and are much more energy efficient, as has been said. Such biofuels need less land and can often grow in more hostile environments where it is impossible to grow food crops. We must therefore aim to get second-generation biofuels up and running as quickly as possible. Without further investment in the biofuels industry, we could miss out on a whole new generation of biofuels and the role that they could play in the future of transport energy. Will the Minister confirm whether the Government are committed both to the future development of second and third-generation biofuels and to investment in them?
I said earlier that there was no single solution—no silver bullet—to the problem of transport energy. We need a package of measures to reduce CO2 emissions from transport, and first on that list would be better investment in public transport. We need more reliable trains and buses, which run on time and are affordable, comfortable, clean and accessible to all. Without investment in public transport, people will continue to use their cars for both long and short journeys even when alternatives are available. We need to invest in programmes that change public attitudes to transport and encourage people to get out of their cars and use bicycles or walk for short, local journeys. Future fuel options such as fuel cells and hydrogen need much more development and investment, but they have real long-term possibilities.
However, the reality is that we need to cut carbon emissions now. For that reason, the Liberal Democrats believe that, alongside the other initiatives that I have mentioned, biofuels have a role to play in the short to medium term, as long as they are genuinely and demonstrably sustainable. The measures that I have laid out would mitigate many of the problems facing biofuels as an environmentally friendly option for powering cars. We therefore do not agree with the statement in the report that a moratorium on the biofuels target would be the best option. Such action would do nothing to decrease our carbon footprint and could stall the development of second and third-generation biofuels, which may prove able to help to supply the world's transport energy needs.
I pay tribute to my hon. Friend Mr. Yeo and the Select Committee that he chairs for the report that they have produced. It demonstrates very well why Select Committees are so important in identifying issues and producing such good evidence.
The UK produced 652 million tonnes of CO2 in 2006, and although that fell by 0.5 per cent. the next year, that hid an increase of 1.3 per cent. in emissions from transport. It is easy to fall into the trap of thinking that if something has the word "bio" or "eco" in front of it, it is bound to be good. I think that Jo Swinson referred to that. There are probably many people driving round the country in hybrid cars who feel that they are single-handedly saving the planet. The fact is that there is no such thing as a car that does not produce emissions. There are good cars and bad cars.
As a farmer—I declare an interest—who has grown biofuels on my farm and currently grows oilseed rape, I can tell the members of the Committee that I was in no doubt when I produced oilseed rape that I was doing it for economic reasons. I was doing it in response to common agricultural policy subsidies. As we poured the diesel into our tractors and the fertiliser into our fertiliser spreaders, we were in no doubt that we were probably contributing to the problem of global warming, rather than solving it.
In the same way, I am sure that the companies referred to by Ms Taylor are motivated by the best possible reasons, but we need to examine the scientific evidence, and the evidence in this report demonstrates that, in very many cases, biofuels are not helping us to reduce CO2 and they are often contributing to the problem. It is important that we consider the scientific evidence, rather than putting a wonderful green halo around ourselves when we think that we are doing something that is helping the planet.
Farmers lobbied for the introduction of biofuels. That was very appealing because many of us were growing nothing on 10 per cent. of our farms; it was free land. This was something that we could do with land that was available. As a former Member of the European Parliament, I know that member states with big agricultural communities lobbied hard to get biofuels on the agenda, as a way of funnelling cash to their farmers rather than necessarily in every case considering the sustainability of every single aspect of the policy. In many ways, of course, the EU policy tends to be farmer-driven—perhaps not as much as it was, but certainly that has always been an aspect of it.
Europe is not the only region where biofuels are on the agenda. The United States is pushing for biofuels, for very different reasons. For the Americans, it is all to do with non-reliance on the middle east and with energy security. Certainly the ethanol produced from maize in the US is not sustainable at all, but it is produced for other reasons. I suspect that, as long as the US remains addicted to energy, it will continue to produce more and more CO2, despite what we hear about Americans falling out of love with the Ford pick-up.
Since the policy was formulated in the European Commission, two things have changed. The first change relates to the sustainability of the fuels, and the evidence in that regard that the Select Committee very assiduously collected is well worth reading. Also relevant is the world picture. We can be as sustainable as we want in producing a biofuel in the UK, but if rain forest is being chopped down to produce that, we are causing damage. I saw figures that suggest that when rain forest is cut down, between 100 and 200 tonnes of carbon are emitted per hectare in the first year. That means that if 2 per cent. of the world's biofuels were produced in that way, it would wipe out the benefits of everything else, even if it was 100 per cent. efficient.
We need to examine the sustainability criteria—Joan Walley referred to that—but I am not sure whether it is credible that that can be made to stick. For example, if a boatload of rapeseed comes across the Atlantic, how do we know that every grain of rapeseed on that boat was produced sustainably? Even if it was produced sustainably, how do we know that the displacement—the food that was produced on new land—was sustainable? It would be very difficult to have a blue-chip sustainability measurement that we could use and feel certain that we were producing sustainable fuel.
With regard to the point that I made to Mark Hunter, I can remember when Margot Wallström, the EU Environment Commissioner, was dispatched to Seattle, to the World Trade Organisation, charged with ensuring that there was an environmental aspect and an animal welfare aspect to the negotiations. She was sent away with a flea in her ear, having been told firmly by the WTO that it would not look at aspects such as child labour, environmental sustainability and animal welfare. The WTO was not open for business in that way.
The second big change occurred last August in the world food supply. As a wheat producer—not a barley baron, I hasten to add—I can say that we had had 10 or 20 years of very depressed grain prices, but they went up dramatically within the space of 10 weeks. Wheat that had been trading the previous year at £70 a tonne was trading at £170 a tonne. That has provoked a number of effects around the world. Forty-three countries have seen food riots. There have been food riots in Mexico, where the price of grain maize has gone up dramatically. The price of oilseed rape has also gone up. People are looking at paying £340 a tonne next harvest for oilseed rape, as opposed to £150 a tonne only a couple of years ago.
I suppose that one good side effect is that that has priced out the freelance people who dosed their tanks with cooking oil from the supermarket. They have been almost priced out of the market, so I do not think that we will see too many repeats of what happened in Swansea in 2003, when there was a run on cooking oil at Asda. The report in The Guardian suggested that the people at Asda did not raise their eyebrows at what was happening. According to the report, the store manager said:
"We just thought they were doing a lot of frying. You have to remember, healthy eating has not hit Swansea in a big way."
I am pleased to say that the police set up a squad to target that dosing of fuel—it was called the frying squad. I almost did not dare say that, but it was in The Guardian, so it must be true.
There are very serious effects around the world in developing countries. Already in countries such as China, people are switching from meat, which they were becoming used to eating, to eating grain instead, which has meant that they can continue to sustain themselves.
I am pleased that the Prime Minister has taken an interest. On
There have been other effects on subsistence farming in developing countries. We might think that the price of wheat does not matter to those who produce grain in the fields behind the house and consume it themselves, but it has had a dramatic effect on many of the other inputs in agriculture. There is a waiting list for John Deere tractors in this country; the price of fertilisers has more than trebled, with an even greater increase for phosphates; and there will be increasing pressure on water resources, which are under great pressure in the developing world.
I welcome the report. We need to look carefully at second-generation biofuels. We must bear in mind that they are often a long-term project for farmers. They can grow rape this year and something else the next, but willow coppice and miscanthus are permanent crops. Farmers will need some degree of certainty about the future level of subsidy were the Government or the Commission to go ahead.
We agree in essence with the report and its conclusions. We believe that many of the biofuels now being used are not sustainable. We therefore need to be sure that all biofuels are contributing to a reduction in CO2 and not making the problem worse. The report is valuable as evidence, as it will enable us to come to a firm conclusion. I agree with the majority of points made during today's debate by members of the Committee. The issue has also been raised by a number of other Committees and on the Floor of the House. Our severe concern is that we are locked into a target despite the environmental evidence given in the report.
There other ways of improving the carbon footprint of transport. We need to consider greener cars. As we heard yesterday at Prime Minister's Question Time, the way to encourage people to use greener cars is not to tax them on decisions that they made seven years ago when they bought their cars.
We should consider car sharing. My car has a CO2 production of 214 g/km if I am on my own. If I am with my wife and three children, it produces 44 g/km for each of us. Car sharing could make a valuable contribution. This morning, I met some people from iTrans, a company that is looking at formalising car sharing in a way that will allow them to participate in carbon credit trading schemes—so when Mr. Branson's aeroplanes fly across the Atlantic, they will be offset because someone at home is sharing the car to school.
I was concerned to hear that Pindar, a company in Scarborough that wanted to set up a car sharing scheme among its employees, was told that data protection rules meant that it could not communicate to them where their colleagues lived. We should also consider car clubs, another way of getting people out of their cars and on to public transport, but still giving them the convenience of having a car at weekends or in the evenings.
I look forward to hearing the Minister's response. In particular, I would be pleased to hear whether he has had any communication with the European Commission or his 26 colleagues in the Council. I have some experience of the way things are done in Europe, particularly in relation to the nitrates directive. Once something is written into the European Union statute book, it is very hard to get it changed—even if subsequent evidence shows that not everything that has been written in stone is what people would wish.
I would be interested to hear what communications the Minister has had with the Commission and, just as important, with other member states that are not as pinned to the farmers' shirt-tails as others—about which we know all too well. I want to see whether we can turn around the supertanker of the European movement, and get a little bit more science into the debate and a little less of people merely sounding green.
It is a pleasure, Mr. Amess, to see a fellow West Ham supporter in the Chair.
I welcome today's debate on the report of the Environmental Audit Committee inquiry into the sustainability of biofuels. I congratulate Mr. Yeo and his colleagues on the report and on securing this debate. If it was not clear before today that biofuels remain a controversial issue, it should be now. It is therefore right that the subject should be fully debated. It is particularly appropriate that today is world environment day; its theme this year is the low-carbon economy and the reduction of greenhouse gas emissions.
Since my last engagement with the Committee six months ago, there have been some important developments. The renewable transport fuel obligation is now operational, with 17 companies registered as obligated suppliers; and the Renewable Fuels Agency—the RFA—has been established as the administrator. This morning, I visited the agency's headquarters in Hastings. As we heard earlier, Professor Gallagher, the RFA chairman, has been leading a review into evidence on the indirect effects of biofuels. The European Commission has published its climate change package, which includes a draft renewable energy directive.
In its original report, the Committee said that
"it is difficult to generalise the benefits or costs of biofuels.".
That goes to the heart of the problem. We heard today that there are good biofuels that are sustainably produced and which help to save greenhouse gas emissions—for example, biodiesel made from waste cooking oil. We also know that there are potentially bad biofuels. For example, everyone agrees that biofuels would be bad if tropical rain forest had to be cleared to grow them. Those are commonly quoted examples, but most cases are not so extreme. It is not always easy to know which biofuels are good and which are bad.
A lot of work has been done, and is still going on, into how to assess the sustainability of biofuels and how to measure their life-cycle greenhouse gas emissions. It is worth reminding ourselves that the United Kingdom is a world leader in the field. Because of the potential of biofuels for greenhouse gas savings, the Government have encouraged them, at first through differential taxation and now through the RTFO. However, we have always recognised that, if given indiscriminately, support for biofuels could lead to unsustainable forms of production.
We have minimised the risk for the RTFO in two ways. We have taken a cautious approach to the level of the biofuels obligation, as articulated by the hon. Member for South Suffolk, the Committee Chairman, and others. We began with a modest target for 2008-09 of a 2.5 per cent. share by volume in total petrol and diesel sales. We also made it a condition that fuel suppliers can claim certificates only if they report on the sustainability characteristics and greenhouse gas savings of their biofuels.
The carbon and sustainability reports will be published in summary for each obligated supplier. That will be an important incentive for them to ensure that their biofuels come from sustainable sources. However, carbon and sustainability reporting is only a first step. We announced last year our aim that, from April 2010, rewards under the RTFO should be linked to the carbon savings of the fuels supplied, and that from April 2011 only biofuels meeting prescribed sustainability criteria would be eligible for certificates. Those provisions would be subject to compatibility with European legislation and WTO rules, as we heard from Mr. Goodwill.
The Government have meanwhile been urged to abandon the RTFO, or at least to put it on hold. In our view, that would be wrong. It would mean giving up worthwhile greenhouse gas savings, with no evidence of any benefit in return. It would also send the wrong signals to the industry, for which a consistent long-term policy is important. Indeed, for that very reason, the legislation establishing the RTFO has been designed so that it cannot be amended quickly. However, we have given a firm undertaking that we will not agree to any increase above existing targets until it can be shown that the necessary biofuels can be produced sustainably. The work to develop robust sustainability criteria at the EU level is therefore most important. With those in place, it will be possible to assess whether enough sustainable biofuels could be produced to meet the targets that have been proposed for the EU.
Two targets affect biofuels. First, the draft renewable energy directive sets a 10 per cent. target for the share of renewable energy in transport, which would almost entirely be from biofuels by 2020. Secondly and separately, the European Commission has proposed an amendment to the fuel quality directive to set a greenhouse gas reduction target for petrol and diesel. That would require a 10 per cent. saving in life-cycle carbon emissions by 2020. Although part of the latter target could be met through the more carbon-efficient production of fossil fuels, it is broadly agreed that the majority of the savings would need to come from biofuels, which could amount to as much as 8 per cent. The amount of biofuels needed would depend on their life-cycle carbon emissions: if they were half those of the equivalent fossil fuels, a 16 per cent. biofuels share would be needed to achieve an 8 per cent. greenhouse gas saving. That is a much greater amount than would be required by the 10 per cent. renewable energy target.
We do not know whether that could be achieved sustainably. We will press for a more realistic but still challenging greenhouse gas reduction target for petrol and diesel. Different sustainability criteria have been proposed for the two directives. A special working group has been set up under the Committee of Permanent Representatives to prepare core sustainability criteria that will apply to both. The hon. Member for Scarborough and Whitby said that directives are difficult to change: in this case, they will have to be changed because they are in conflict with each other. The United Kingdom has been playing a full and active part in the negotiations, which should reassure my hon. Friend Joan Walley.
Recent studies have suggested that the indirect effects of biofuels might be more significant than had been assumed. In the light of uncertainties about those results the Government asked the chairman of the RFA, Professor Ed Gallagher, to undertake a review of the evidence. I am grateful to him and his team for the work that they have put into the review, and to a wide range of stakeholders for their contributions. The time scale for the review has been tight, because the findings need to be fed into the EU negotiations on biofuels sustainability criteria. Our negotiating position will take the findings fully into account. We expect that they will also be of significant interest to other member states and that they may in some cases affect their positions on the negotiations.
Nevertheless, the review team have done a great deal in the time available. Evidence has been collected in the United States and Brazil, which are two of the most important countries for the production of biofuels. There has been a meeting with experts in the Netherlands which, like the UK, is a leading country for work on biofuels sustainability. On Monday, members of the review team will travel to Rome for a meeting at the UN Food and Agriculture Organisation. The meeting will pay particular attention to the impact of biofuels on food security, especially in the light of the high-level conference on food security which has just taken place at the FAO.
I was about to offer an assurance on the publication of the report. It is not available, but I understand that some interim findings have been shared with some organisations. As my hon. Friend Ms Taylor said, peer review of such reports is of fundamental importance, and that is what is happening at the moment. I will give my hon. Friend the Member for Stoke-on-Trent, North details on publication, which will be at the end of this month—we will not place anything in which we do not have total confidence in the public domain. We are not in such a position at the moment. I shall give a definitive response to the questions she put in her contribution later.
Biofuels stakeholders have been fully involved in seminars and workshops in the UK. Professor Gallagher's report has been drafted and is going through a process of peer review by Government chief scientists. The final report is due to be presented to the Secretaries of State for Transport and for Environment, Food and Rural Affairs at the end of the month. My hon. Friend the Member for Stoke-on-Trent, North made that point in her contribution, as we discussed. As I said, I expect the interim report to be with Ministers soon, and the final report with recommendations on how to move forward, especially in Europe, by the end of June. The report will be independently peer-reviewed before publication. To answer her question, I expect that the European Energy Council will debate the issue but I do not expect the independently peer-reviewed report to be made available before the end of June. It will therefore not flavour those discussions.
The emerging evidence indicates that the issues surrounding biofuels are very complex and that there are still many uncertainties about measuring the benefits. That confirms that we have been right to be cautious in setting biofuels targets. The policy of caution will continue—many hon. Members, including some of my hon. Friends, made that point. The Gallagher review is not the end of the process. The review of biofuels will go on as we continue to collect evidence and develop a clearer understanding of their impact. If the evidence indicates that a target cannot be met solely through sustainably produced biofuels, it would need to be modified.
The hon. Member for South Suffolk made the point that 10 to 40 per cent. of UK arable land would be needed to meet the 5 per cent. UK target. I must tell him that we expect the target to be met through a mixture of imported and home-grown feed stocks. However, in theory—studies including one from the National Farmers Union suggested this—a 5 per cent. target could comfortably be delivered by UK-grown biofuels without any significant change to UK farming practices. We export large quantities of wheat that could be used to produce bioethanol and contribute significantly towards the 5 per cent. target. The Gallagher review is considering the pressures and availability of land in relation to the production of biofuels.
My hon. Friend the Member for Stockton, South made a powerful speech and reinforced the importance of peer review of reports and the complexity of the issue. Her concerns arise from the information with which she has been provided from various sources. I welcome her support for biofuels that are produced on a sustainable footing and I understand their importance to industries in her constituency and surrounding areas, and the jobs that they support for people in the north-east.
Jo Swinson called on the Government to keep moving on the issue. I hope that I have demonstrated, if not completely to her satisfaction, that we are doing so. Three years ago, the Government were attacked for not moving fast enough on biofuels, and now we are being criticised for not calling a halt—my hon. Friend Mr. Drew made that point eloquently, relating it to his experiences.
I hope that my contribution has covered the points made by Mark Hunter. In the end, his position is not a million miles from the Government's.
The hon. Member for Scarborough and Whitby always speaks with great authority from personal experience—he did so today, even if he chose to quote from The Guardian. That was a bit suspect, but he retrieved his position by quoting from the Prime Minister, who is a much more reliable source. I shall pass on the hon. Gentleman's regards.
Biofuels should not be considered in isolation—everyone who spoke in the debate made the point that they do not constitute a silver bullet. Their significance is mainly their contribution to greenhouse gas savings, and we aim to encourage them accordingly. If because of sustainability or other problems that contribution turns out to be lower than current targets imply, equivalent reductions might need to be found elsewhere.
Biofuels are not an end in themselves, but with the right sustainability standards in place, they have a role as one of many measures with which we are combating climate change. I congratulate the hon. Member for South Suffolk and the Committee on the report. It will play a role in the development of our policies in future but, as is obvious from my remarks and the Government response, we are not supportive of its final conclusion.
Belatedly, Mr. Amess, I wish to say how delighted I am to serve under your chairmanship, as you and I entered the House almost 25 years ago on the same day.
This has been a useful debate. I am grateful to all hon. Members who have expressed their opinions about the Committee's report and congratulated the Committee on producing it. I am glad that a variety of opinions have been voiced; it makes for a proper debate. I am particularly grateful for the support of my colleagues from the Committee, two of whom are still here. I was a little disappointed by the rather ambivalent attitude of Liberal Democrat Front Benchers, who were less than wholehearted in their commitment to the report's conclusions, but many years of experience have taught me not to be too surprised by that.
I welcome warmly the official Opposition's support for the report's conclusions, and I thank the Minister in particular for his response. He may recall that in a previous incarnation, he very courteously received a deputation of constituents of mine who wished to save an extremely small village post office. I am glad to tell him that, whether it was with his help and intervention or not, that post office has survived the chop. If he does nothing else for South Suffolk, he has achieved something for the village of Stoke-by-Nayland, through which I drive every week of my life.
I thank the Minister for explaining the position in relation to the Gallagher review. It is useful to have that information, and we look forward to seeing the review's conclusions shortly. I am glad that they will be available before the summer recess. They will no doubt feed further discussion and debate. He confirmed that the UK target is likely to be met through contributions from imports. Of course, the lack of sustainability in some methods of production of imports was a matter with which the Committee was particularly concerned. We recognise that at home, the issues are rather better understood. The risk of environmental damage and of a negative impact on greenhouse gas emissions arises almost entirely from what may happen—indeed, we think that it is happening—in some developing countries. That will remain a concern.
The Minister teased Jo Swinson slightly about the fact that the Government were attacked some years ago for going too slowly and are now being attacked for going too fast, but I think that she said—I agree with this—that when the facts change, it is right to change the policy. We know a lot more than we did three years ago, and the state of knowledge is advancing all the time. That is why the need for an immediate change in Government policy, as called for by the Committee, is still justified. I emphasise that the Committee reached its conclusions on the basis of the evidence that it studied, and we will continue to do so. It was a balanced conclusion. We recognise and welcome the fact that biofuels could contribute significantly and positively towards cutting greenhouse gas emissions from transport. Our concerns involve the first generation and the issues that I mentioned.
I shall not detain you from your well-deserved weekend any longer, Mr. Amess. I am grateful to you for your chairmanship and to all who have taken part in this debate. I am sure that the issues will continue to feature prominently in discussions about the nation's and Europe's response to climate change.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes to Five o'clock.