[Mr. David Amess in the Chair] — Biofuels

Part of the debate – in Westminster Hall at 2:53 pm on 5th June 2008.

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Photo of Nick Hurd Nick Hurd Opposition Whip (Commons) 2:53 pm, 5th June 2008

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.