British Bioethanol Industry — [Mike Gapes in the Chair]

– in Westminster Hall at 11:30 am on 16th January 2019.

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[Mike Gapes in the Chair]

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons) 2:30 pm, 16th January 2019

I beg to move,

That this House
has considered the future of the British bioethanol industry.

It is a pleasure to serve under your chairmanship, Mr Gapes, and it is good to have the opportunity to discuss the future of the British bioethanol industry when other matters today are focusing people’s minds. I am pleased to see so many hon. Members of different parties here to contribute to the debate.

The bioethanol industry is, regrettably, in a state of collapse. Should this collapse be complete, the industry is unlikely ever to come back again. We are at a seminal point in its life in the UK. I hope that we can convince the Minister to take, on behalf of the Government, the urgent steps needed to secure the future of this important industry. Should we lose it, there will be significant implications not only for the agricultural and transport sectors, but for the wider economy and the UK’s decarbonisation and renewable targets.

I particularly thank Jesse Norman, who unfortunately cannot be here to respond on behalf of the Government. He has agreed to meet the British bioethanol industry and me next week. Hopefully this debate will assist in setting out and examining the current issues, including the compelling case why his Department urgently needs to make E10 fuel mandatory at UK petrol stations. Next week’s meeting can get straight to how we can make that happen as soon as possible in 2019 in order to reverse the recent collapse in confidence, production and job losses and secure the future of this important industry.

Photo of Oliver Heald Oliver Heald Conservative, North East Hertfordshire

Will the hon. Gentleman be willing to let Members who are here today know the outcome of his meeting with Ministers? I remember attending a meeting on the subject of E10 fuel, which I think he organised. I thought that quite a compelling case was made, and it would be interesting to have some feedback.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

The Minister has agreed to meet MPs of different parties who have an interest, particularly a local interest. I would certainly be very keen to update the right hon. and learned Gentleman on the outcome of that meeting. Should he be available and want to join us, I am sure that would be possible.

Photo of Greg Knight Greg Knight Conservative, East Yorkshire

I declare an interest as the owner of several older vehicles. Is the hon. Gentleman aware that the Government are right to be careful in introducing E10, which is not compatible with vehicles manufactured before 2000, so it is essential that E5 or less remains available?

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

Nobody is arguing that E5 should not be available. There was an excellent Radio 4 “File on 4” programme just before Christmas that featured Tony Wood, who runs a garage and owns 3 MGs. The reporter Simon Cox asked him about the impact of E10 fuel on older cars such as Wood’s MGBs:

“And if they brought in that E10 fuel, what effect—if any—do you think it could have on it?”

Mr Wood replied:

“Well, of course the jury is still out on that, because nobody really knows, but we’ve been running E5 for a number of years and there were stories when E5 came in of the sorts of effects it would have on your fuel hoses, but in real terms E5 has not proved to be much of a problem because most cars have already had their fuel lines changed at some point or another for more modern materials.”

Mr Cox then asked:

“So if the concern with bringing in E10 was the effect on old cars, it sounds like that doesn’t really stack up.”

Mr Wood replied:

“Well, in my opinion it’s probably less of an issue than it has been made out to be.”

Everybody would hope that that would be the case.

Photo of Greg Knight Greg Knight Conservative, East Yorkshire

The hon. Gentleman is being very generous, and I hear what he is saying. Will he take it from me that there are cases of E10 dissolving sealants in fuel tanks and blocking fuel lines, which could be very dangerous in some cases?

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

I am drawing on the expertise in that “File on 4” programme. Obviously, any serious issues need to be looked at properly. Nobody wants the introduction of a new fuel to have disadvantages for people. It is very important that E5 remains available, as the right hon. Gentleman indicated.

The British bioethanol industry is perhaps not as widely known as it should be, but it is something of a British success story. Over £1 billion has been invested in the past decade, allowing British workers using British-grown produce to produce British bioethanol to help fuel British vehicles and feed British livestock, while reducing the UK’s carbon footprint and putting fewer pollutants into the atmosphere.

Until very recently, the UK had two of Europe’s biggest bioethanol plants: Ensus created a state-of-the-art facility on Teesside with an initial £250 investment in 2010, and Vivergo Fuels created a £400 million plant in Hull in 2013. Both distilled locally grown wheat to produce bioethanol, with protein-rich animal feed created as a by-product. The Ensus plant could produce 400 million litres of ethanol a year, and Vivergo Fuels 420 million litres. Each employed over 100 people directly as well as supporting a further 6,000 supply-chain jobs, including farmers and hauliers. The UK also has a further plant in Norfolk owned by British Sugar, which can produce 70 million litres a year.

As the Minister is well aware, Vivergo announced in September that it was closing its plant in Hull, and Ensus announced that it was pausing production at its plant on Teesside in November. It is not an overstatement to say the industry has collapsed in only a matter of months, and its future is dependent on the Government taking urgent action on the introduction of E10.

Photo of John Howell John Howell Conservative, Henley

I want to know—the hon. Gentleman might be coming on to this—whether he has done a calculation of the effect on the savings on air pollution that these fuels will have. Maybe he could tell us what that is.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

I will come on to that in due course. If the hon. Gentleman can be patient, I will come to it when I come it.

Photo of John Howell John Howell Conservative, Henley

I am desperately eager to know.

Photo of Phil Wilson Phil Wilson Labour, Sedgefield

I congratulate my hon. Friend on securing this debate, which is really important for Teesside and the south Durham area. I want to raise an issue about farming. The National Farmers Union has put out a report on the importance of bioethanol. My constituency covers 150 square miles and is an agricultural area of County Durham. Does my hon. Friend understand what the NFU has briefed on the implications of this for climate change? It could lead to 700,000 cars being taken off the road. We require an infrastructure that can secure that, especially in the agriculture industry, where we can grow the appropriate crops for this kind of industry to prosper. We are missing an opportunity should we not invest in it.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

My hon. Friend makes the point very well and begins to answer the question from John Howell about the 700,000 cars that would be taken off the road if E10 were introduced, and on the impact on both air quality and carbon reduction. The bioethanol industry makes an important contribution to farming across the country.

In 2005, the Labour Government gave a very clear message to investors that they would support a substantial growth in demand for renewable fuels, announcing that 5% of petrol sold in the UK would come from renewable sources by 2010. The subsequent coalition and Conservative Governments retained these commitments. On the back of that, large scale investments of over £1 billion were made to ensure that the UK could produce high-quality and sustainable bioethanol to meet forecast demand. During the following decade the Government reduced target levels for renewable biofuels while addressing questions on the sustainability of biofuels. The installed capacity, which was put in place to meet the Government forecast of demand, was substantially higher than demand. Producers have suffered regular and sustained losses, which have led to recent plant closures. Higher demand has not materialised, because at present only E5 petrol with a 5% blend of bioethanol is available at British petrol stations, which is insufficient to support a viable British bioethanol industry as it currently exists.

There have been signals from the Department for Transport that suggested that E10 would be introduced imminently, giving the sector further false hope. The Department’s transport energy taskforce recommended lifting the blend level and reintroducing E10 in 2020. The industry interpreted that as meaning that the Government were fully behind it. Nearly four years on, the Government have still to act on that recommendation.

The Minister’s Department issued a consultation and call for evidence on E10 in June last year. The consultation closed in September, but the Department has yet to publish its response to the submissions. Unfortunately, the consultation did not propose to mandate the introduction of E10. Instead, it proposed the introduction of a protection grade requirement to ensure the continued availability of E5 petrol, representing 95% of all petrol sold today. If implemented, that may be a disincentive to move to E10.

Photo of David Simpson David Simpson Shadow DUP Spokesperson (Environment, Food and Rural Affairs), Shadow DUP Spokesperson (Business, Energy and Industrial Strategy)

Will the hon. Gentleman clarify, if possible, how competitive the fuel is, compared with diesel, petrol and so on? Is the pricing competitive?

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

Yes, it is competitive. It is probably slightly more expensive, but it is a very small expense. Most of the increase in expense would be from taxation.

The call for evidence on ideas to encourage the introduction of E10 was included in the consultation, but again that signalled only further discussion and delays. It is therefore not surprising that the industry appears finally to be losing faith. The Vivergo closure and the Ensus announcement demonstrate that jobs and investment in the bioethanol industry and the agricultural sector are hanging in the balance. When the Government announced the consultation, they said:

“This government is ambitiously seeking to reduce the UK’s reliance on imported fossil fuels and cut carbon emissions from transport. But drivers of older vehicles should not be hit hard in the pocket as a result” of the introduction of E10.

On the cost, which David Simpson mentioned, almost all cars built since 2000, and 95% of all cars on the road, are warranted to run on E10, and every new petrol car sold since 2011 is fully warranted to use E10, so about 5% of cars on the roads may have an issue. That includes classic cars, about which Sir Greg Knight raised concerns. Any motorists uncomfortable with using a new fuel can always use the premium brands, which need to remain available.

When the fuel is introduced, the industry would be happy to work with the Department to support a public information campaign about E10, including a website with the compatibility details of all car makes and models. That information would also need to be provided at petrol pumps.

The cost of E10 would depend largely on tax levels. It is predicted that it would cost no more than 1p more per litre at the pump, or about £20 per day. Most of that is made up from taxation, rather than the additional cost. The Government could consider a reduction in vehicle excise duty to compensate for any small increase in running costs resulting from using the more premium fuel, so there is a way through this dilemma. There are straightforward solutions to the possible fuel price issue, but the Minister’s Department might be reluctant to introduce E10 due to concerns from a very small minority of motorists whose vehicles are not fully warranted to use E10. I hope that the Minister will clarify that.

On greenhouse gases, there are broader environmental issues to consider, as has been said. Transport represents 24% of total greenhouse gas emissions—higher than any other sector in the UK economy. It is 1.3% higher than it was in 2013. Bioethanol should be seen as a vital tool in helping to decrease those emissions. The UK is currently failing to reach its statutory targets on the amount of renewables used in transport, in line with the renewable energy directive and the UK’s Climate Change Act 2008. Bioethanol is one of the quickest, easiest and most cost-effective ways of meeting those targets. As has been said, the introduction of E10 would take the equivalent of 700,000 cars off the roads.

Up to its closure, Vivergo Fuels was working on projects with the University of Hull and Bangor University to explore the development of even more advanced biofuels, which would have delivered even greater environmental benefits. Ensus has been working with one of the winners of the Government’s advanced biofuel competition grants, Nova Pangea, to produce ethanol from biomass waste products. Unfortunately, the failure of the UK’s investments in first-generation bioethanol puts at serious risk further investments.

The introduction of E10 would also improve air quality by reducing particulates and carcinogens. In the light of the Environment Secretary’s recent announcements, it would make sense for E10 to be embraced. Benzene and butadiene emissions, both of which are highly carcinogenic, decrease with higher levels of ethanol blending in fuel. Additionally, the oxygen contained within ethanol helps the fuel to burn better and increases the efficiency of the engine, reducing the hydrocarbons that are released. E10 is clearly better for the environment than the current grades of petrol sold in the UK. The concerns over diesel have resulted in motorists moving back to petrol, and the growth in petrol hybrids means that addressing the carbon dioxide emissions from petrol cars is even more urgent.

Although a range of technologies, including electric cars, may play a complementary role in decarbonising transportation and improving air quality, the reality is that electric vehicles represent only a small percentage of overall car sales in the UK—currently around 6% of annual sales—and most are hybrid, so in the short to medium term bioethanol and E10 would make a significant contribution. To have the same environmental impact as the introduction of E10, we would need to replace 2 million petrol cars with electric vehicles immediately.

On foreign imports, the closure of the UK’s domestic production of bioethanol will mean a greater reliance in future on imports of bioethanol and soya bean meal, as a substitute for the high-protein co-product DDGS—distiller’s dried grain with solubles—animal feed, which is a by-product of the bioethanol process. Before its closure, Vivergo was the country’s largest single production site for animal feed. It delivered 500,000 tonnes of high-protein feed to more than 800 farms across the UK—enough for about 20% of the UK’s dairy herd. Incidentally, the fermentation process used at the Vivergo plant also made it the UK’s largest brewery.

Soya bean imports are already at about 1.8 million tonnes a year. The majority comes from non-EU countries, and therefore it is likely that it is from genetically modified crops. There will also be a negative impact on the domestic feed wheat market, as a valuable floor for farmers across the UK, which also enables a premium price in the north-east, will be removed. If Vivergo and Ensus were in full operation with mandatory E10, we would have a comprehensive bioethanol industry underpinning UK environmental progress and agricultural sustainability.

Without a British bioethanol industry, the UK will likely become increasingly reliant on imported bioethanol and bioethanol equivalents, predominantly using cooking oil, which is itself shipped many thousands of miles to the UK from China and the US. By contrast, Vivergo sourced its wheat an average of 34 miles from its plant in Hull, which supported sustainability by minimising transportation. The fact that more and more countries are starting to use their own wastes locally calls into question the long-term strategy of being very reliant on imported waste materials from across the planet to meet our decarbonising challenge. A greater reliance on imports will not just represent a missed economic opportunity.

Having addressed some of the clear economic and environmental benefits of introducing E10, I would like to reflect on where the UK sits in comparison with the rest of the world. E10 is already widely available across continental Europe, including in France, Germany, Belgium and Finland, and further afield in the USA, Australia, New Zealand and Brazil. In a real sense, the UK is lagging behind the rest of the world when it comes to the use of bioethanol-blended fuel. In some countries, including the USA and Brazil, much higher versions are available, including blends of up to 85%—E85—so the steps we are asking the Department to take are in no way radical or untested.

At a time of increasingly uncertain international trading circumstances, and in the context of leaving the European Union, E10 increases domestic supply for feed and fuel while lessening Britain’s reliance on foreign markets for both. The introduction of E10 would bring certainty to British businesses, investors and arable and dairy farmers, while supporting economic growth and securing thousands of existing high-skill, high-STEM jobs, and the creation of many hundreds more. Further research could make Britain a world leader in even cleaner and greener bioethanol.

The sustainability concerns over E10 are now resolved, and the renewable transport fuel obligation has resumed its trajectory and has doubled this year. Bioethanol is the cheapest means of meeting the renewable transport fuel obligation, but its contribution is constrained due to the fact that the UK has not yet introduced E10. Although a transition from E5 to E10 is regarded as inevitable and environmentally desirable, it has not yet happened, and the industry has endured years of delay. The DFT’s consultation process late last year did nothing to accelerate it and reassure the industry.

UK-produced bioethanol has excellent environmental credentials and makes an important contribution to the agricultural and food sectors. Without E10 in the British bioethanol industry, the UK will become even more reliant on imports of fuel, proteins and liquefied CO2, recent shortages of which, particularly during the World cup, have exposed the UK’s precarious supply position.

British motorists should have the freedom to make greener choices at the petrol pump. Any remaining concerns at the Department can be resolved and addressed with relatively simple solutions—getting the most polluting cars off our roads can only be a good thing. Many other major developed countries around the world either have already implemented E10 or plan to, and its introduction in the UK has been widely anticipated since 2013.

I urge the Government to now support the sector and mandate the introduction of E10 as a matter of urgency. If not, there is a real risk that the environmental and economic benefits, along with the significant investment and associated jobs created by the UK’s bioethanol industry, will be lost.

Several hon. Members:

rose—

Photo of Mike Gapes Mike Gapes Labour/Co-operative, Ilford South

There is considerable interest in this debate. I hope that hon. Members will confine their remarks to approximately five minutes, so that everybody can speak. I intend to call the Front-Bench spokespeople at 3.30 pm, to allow them the 10 minutes each that they are allotted. I call Emma Hardy.

Photo of Emma Hardy Emma Hardy Labour, Kingston upon Hull West and Hessle 2:51 pm, 16th January 2019

It is a real pleasure to serve under your chairmanship, Mr Gapes; I hope that this is the first of many such occasions. I congratulate my hon. Friend Nic Dakin on securing the debate. Just before I came into the Chamber, I was talking to him and I said how tiring it is to feel constantly angry about things. I had just left the main Chamber, where people feel constantly angry. I do not want to get angry and frustrated, so I will settle for deep disappointment and upset instead.

This is significant. The Government’s failure to fulfil their promise on E10 is not just an environmental issue, although that is crucial, and neither is it just an economic issue, although it has sacrificed so many high-quality jobs in my constituency. If the Government do not keep their promises to business, how can businesses ever trust them again? What faith can businesses have that we want them to come to my constituency, to invest there, and to provide those good-quality jobs in future? Businesses need to know that the Government can be trusted when they promise that they are going to do something. My contribution to the debate will focus on the wider significance, which is about more than whether to have E10; it is about whether we need a Government who fulfil their promises to business, especially in the uncertain years ahead.

Vivergo closed—it announced that it was closing on 2 August—because the Government did not introduce E10 as they had promised. Vivergo closed its headquarters, which were in my constituency, and consolidated all its staff in the Saltend Chemicals Park in the east of Hull. The Government passed the RTFO in 2018, but they have continued to drag their heels on the introduction of E10. Mark Chesworth, the managing director of Vivergo, said that the closure was the Government’s fault, because the political indecision had a highly damaging impact on the business and its jobs, and left it vulnerable to changeable market conditions.

It is difficult to put across Vivergo’s significance in my local area. The day that it announced its multi-million pound operation was one of fantastic good news for the area. We want skilled jobs in the constituency. People celebrated and nearly all the local MPs from across the party went there for the photo call and to congratulate the company on opening the plant—it was seen as a good news day. Vivergo contributed money towards Hull’s bid to be city of culture, and to wider projects across the whole of Yorkshire. I am not just having a moan about something that affects my constituency; the Government need to understand that the closure’s significance reaches far wider than just my constituency.

We in Kingston upon Hull West and Hessle know that we need jobs perhaps more than other areas of the country. Some 7.9% of our population are claiming jobseeker’s allowance, which is more than double the UK average. A report by the Centre for Cities think-tank found that Hull has the lowest average wage in the country, at £376 a week. We want high-skilled and high-paid jobs such as those that Vivergo provided.

The wider impact hits beyond my constituency. As my hon. Friend the Member for Scunthorpe said, the plant bought 1.1 million tonnes of feed wheat, sourced from around 900 farms across the Yorkshire region. In all the time that I have been active in the Labour party, this is the first time that farmers from the constituencies of Conservative MPs have been so desperate to meet me and tell me their problems, because they do not feel that the party with which they usually associate themselves is listening to them on this issue. Vivergo supported 3,000 jobs—directly and indirectly—and its contribution to the local economy was £600 million.

As a local MP, I want skilled jobs, which is why I have pushed so hard and talked about Vivergo for such a long time. On 30 November 2017 I wrote to the Secretary of State for Transport on the matter, seeking clarification on the renewable transport fuels obligation. On 15 February 2018 I received a reply from the Minister of State, Jesse Norman, which committed to introducing the relevant changes in April 2018. I asked four questions about biofuels and the renewable transport fuels obligation on 8 December 2017. I asked two questions about excise duties and the way biofuels are taxed on 5 December 2017. I met Vivergo in Hull and in London on a number of occasions. The issue is not new to the Government; they cannot claim not to be fully aware of it.

Photo of Martin Vickers Martin Vickers Conservative, Cleethorpes

I share the hon. Lady’s passion about this issue. She referred to questions she asked back in 2017. I think that Nic Dakin and I have seen three or four successive Ministers about the matter. I say to the Minister that one thing that we want to get from the debate is a positive route to making a decision, rather than keeping farmers, Vivergo workers and others hanging on.

Photo of Emma Hardy Emma Hardy Labour, Kingston upon Hull West and Hessle

The hon. Gentleman makes an excellent contribution. I am fully aware of how long the campaign has been going on and of how long people have been talking about the issue.

The incompetence, the lack of commitment, energy and dedication, and the dereliction of duty—hon. Members can add their own adjectives to describe the Government—has not only cost families in my constituency their jobs and incomes; the damage goes much further. The Government’s failure to fulfil their promise could damage future investment from other businesses in the area. It is therefore vital, for that reason and no other, that the Government keep their promise on E10 and take immediate action.

Photo of Paul Williams Paul Williams Labour, Stockton South 2:57 pm, 16th January 2019

It is a pleasure to serve under your chairmanship for the first time, Mr Gapes. I congratulate my hon. Friend Nic Dakin on securing this debate on an issue that affects my constituents and those of many hon. Members present.

As we have heard, the industry contributes £600 million to the UK economy every year. In response to targets on renewables announced by the Government over 10 years ago, over £1 billion was invested in the UK to create state-of-the-art bioethanol production facilities. Last year, the industry crumbled, and the UK’s two largest plants announced that they were either closing, in the case of Vivergo, or pausing production, in the case of Ensus, which has its headquarters in my constituency and its plant in Teesside.

I visited the plant shortly after I was elected as the Member of Parliament for Stockton South. Construction of the plant triggered about £60 million-worth of investments. Ensus is a job creator, and it also helps to support this country’s goal of reducing greenhouse gases produced by cars and other vehicles. Over 100 skilled workers from Teesside work on the plant, and Ensus supports a further 2,000 north-east jobs in the supply chain, mostly in farming and agriculture. I visited one of the farms in my constituency—where there are not many farms—that supplies the industry. Two thousand jobs are at risk because of the Government’s prevarication.

Ensus is a leading producer of bioethanol. We know that bioethanol is better for the environment and will reduce carbon emissions from transport. It is also well documented just how damaging such transport emissions are to air quality. The emissions damage people’s health and the environment. Air pollution causes heart and lung disease, and in parts of our towns and cities it is making the air not just toxic but deadly. For anything else found to be a contributing factor to 40,000 early deaths in this country, Parliament would have thrown everything including the kitchen sink at it, to do everything possible to fix it. Bioethanol is not a silver bullet to improve air quality, but if the Government backed E10 now, that would go some way towards reducing emissions, which would improve our environment and air quality.

Photo of Oliver Heald Oliver Heald Conservative, North East Hertfordshire

Does the hon. Gentleman agree that the national message is important, and the Government should hear it? Environmental improvement requires green jobs to come through and green industry to be successful. The Government should encourage that and, in this particular case, to have E10 available in Britain is a no-brainer.

Photo of Paul Williams Paul Williams Labour, Stockton South

I thank the right hon. and learned Gentleman for making that point more eloquently than me. It is difficult to understand what the barriers to the introduction of E10 might be. Environmental improvement needs to happen through a series of incremental steps—there is no silver bullet—but this one seems to be a win-win.

The owners of Ensus have pointed the finger for the mothballing of their plant in Teesside squarely at the

“sluggish implementation of political objectives for reducing greenhouse gas emissions”.

Three years ago, the Department for Transport recommended doubling the amount of ethanol in fuel; three years later, we are still waiting for action. That means that the investment is paused. A huge plant is lying dormant, with workers on stand-by. Without the introduction of E10, bioethanol demand cannot increase above its current level and therefore cannot contribute to further decarbonising petrol. As a result, the future of the Ensus plant remains in question.

I therefore ask the Minister to address in her response how, if there is no demand, the Government plan to replace the jobs that Ensus provides? How long will she let the UK lag behind the likes of Germany, Australia, New Zealand, Canada and the USA, which already back E10? Is the Minister willing to do all that she can to improve air quality in this country, with E10 being one step towards that?

My constituents ask me to come down here to Westminster every week to vote for jobs in Teesside. I am also here to make the case for a fair deal for the north-east, to help boost investment in our region, and to support and protect the jobs of people on Teesside.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health) 3:02 pm, 16th January 2019

I thank Nic Dakin for securing the debate. He and I have a long friendship in this House: we both came here in 2010; we are both Leicester City football supporters—the last two matches have not been good for us, but we hope for better days, and we are still seventh in the league, which at the end of the day is not too bad—and, I am pleased to say, he raises many issues on which I fully and wholeheartedly support him, as I do on this occasion.

Over the years, many Members have endeavoured to pursue and promote this issue, including the hon. Gentleman. I thank them for those endeavours. We have a new Minister responsible for the subject in the Chamber, which I hope is a chance for a positive response. As other Members have done in their contributions and interventions, perhaps she will plot a way forward that can deliver what we have discussed.

I declare an interest as a member of the Ulster Farmers Union, a sister body of the National Farmers Union. I will make some short comments from the point of view of the farmers union. I am keen to see how we can all benefit from the promotion of the bioethanol industry sector across the whole of the United Kingdom of Great Britain and Northern Ireland, because if we all pursue the policy, we should all get the benefit.

E10 is a type of petrol that contains up to 10% bioethanol. At the moment, E5 is commonplace on UK forecourts, and it contains up to 5% renewable bioethanol. E10 and even higher grades of bioethanol blends are commonplace in other countries around the world, such as E25 in Brazil—Members might have seen correspondence on that in the papers recently.

E10 legislation would increase demand for UK-derived feed wheat through the increased production of bioethanol. That would decrease the surplus in exportable feed wheat and, in turn, increase the amount of the co-product DDGS, or distillers’ dried grains with solubles, received by the livestock sector as high-protein, high-quality feed. At full capacity, the bioethanol industry in the UK would utilise about 2 million tonnes of feed wheat, with about 50% of that intake returned as DDGS. That provides the opportunity to create 1 million tonnes of UK-derived, high-protein animal feed while offering more protection to arable and livestock farmers from the perils of global commodity markets.

When we look at the intricate detail of the proposition, there is a real possibility of deriving benefit in many sectors, and in many ways, from the development of bioethanol. It seems to me that it needs serious consideration. We therefore look to the Minister for a wholesome and full response.

I was heartened by the work of my local council and its recycling endeavours. As an easy-to-grasp illustration of what it had done, for example, it equated its work on increasing recycling and lessening waste to the number of cars taken off the road—it put it in simple language. The UK-wide introduction of E10 would be the equivalent of removing 700,000 cars from the roads, or 3 million tonnes of CO2. The information provided to me states that the roll-out of E10 would be the fastest and most effective way for the UK to reach its climate change targets, especially as E10 can be used in hybrid electric cars.

Successive Governments have encouraged people to purchase diesel vehicles, and now they tell them not to, so perhaps we have here a method of addressing that. I emphasise to the Minister and other hon. Members taking part in the debate that we need to spread the job opportunities that could come off the back of this industry across the whole of the United Kingdom. We need to encourage the farming sector, too, which has a key role to play. Will the Minister tell us what incentives, strategies or plans are in place to encourage farmers to look more at the bioethanol industry?

Ethanol reduces greenhouse gases emissions by up to 90% compared with conventional fossil fuels. Indeed, the Intergovernmental Panel on Climate Change called for a threefold increase in the use of biofuels in transport by 2030. That briefing went on to note that, at the COP24 summit, renewable ethanol was reported to be the largest contributor to progress in the transport sector, but I believe more can be done.

To conclude, I agree with the hon. Member for Scunthorpe. More needs to be done to understand how best to better use resources to live up to the environmental pledge that we have made, and how to make better use of those resources to benefit us all. It is all about benefiting us all, as well as climate change and addressing those issues. We should be pushing forward with great urgency. I thank the hon. Gentleman again for bringing this issue to the Floor of the House. The debate is much needed and much appreciated, and I look to the Minister to ascertain whether the matter will be acted on in the way that those in the debate wish it to be.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North 3:08 pm, 16th January 2019

It is a pleasure to serve under your chairmanship, Mr Gapes. I congratulate my hon. Friend Nic Dakin on securing the debate, and it is lovely to be in the Chamber to see three Labour Teesside MPs, as well as other Labour colleagues, leading the charge for farmers and of course jobs.

We have already heard that the bioethanol industry is worth about £1.5 billion to the UK economy annually and supports 6,000 jobs, including apprentices and graduate programmes. However, the industry has been hit by job losses. I will highlight briefly that measures can be taken—the Minister has already heard what they are—to protect jobs and to help growth in the industry, creating future jobs and helping my constituency.

I am sure fellow Members are aware of the thousands of jobs that have been lost around the country by the recent closure of Vivergo and the cuts at Ensus. Northern towns have been hit hardest by the closures, including my area. However, bioethanol is used in making E10 petrol, and legislating for the mandatory introduction of E10 would create jobs. It would also put stability into some of our communities where energy companies are based and be hugely beneficial for the environment. Indeed, many of my constituents have contacted me. Bioethanol is the last thing I expected my constituents to contact me about, but many of them did and they asked me to speak on their behalf today.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

It was indeed—better than Brexit.

As we have already heard, legislating for E10 would bring us into line with other European countries, including Germany, France, Belgium and the Netherlands, and other countries much further afield such as Canada, Australia and New Zealand. Others have talked about the advantages of E10, which are numerous and clear and have been outlined very well by my hon. Friend the Member for Scunthorpe. I will reiterate some of the things he said.

Transport is the biggest offender when it comes to greenhouse gas emissions, contributing 28% of the UK’s total, but that figure can easily be reduced. With regards to emissions, in 2013, the use of biofuels was equivalent to taking hundreds of thousands of cars—some say as many as 1.35 million—off the road, and it is predicted that many more could come off the road as well.

E10 produces fewer carcinogens, lower particulate matter and fewer nitrogen oxides, and helps to improve air quality. The public health benefits are massive. All those things have a direct impact on my constituency, where there are seven farms. When people think of my constituency, they see industry and pipes and things, but it is quite rural and seven of my farms—I do not own them personally—sold their wheat to the Vivergo plant, which produced bioethanol, but has closed. The farmers were paid a £10 a tonne premium compared with what they would have got on the export market, so many of my constituents are losing money from the industry’s decline. They have to find new markets abroad, which are generally less stable for them because of currency fluctuations—we have had plenty of them of late—demand, and even Brexit.

The Navigator Seal Sands storage facility, where Ensus stores and redelivers its ethanol, is also in Stockton North, as are Intertek Cargo and analytical assessment branches that provide services to Ensus. In the neighbouring constituency of Middlesbrough, Stockton North employees are employed by a logistics organisation, AV Dawson, which provides supply chain services for the industry. So the people I represent have quite a stake in any decision by the Government to move to E10 and allow that industry to be redeveloped, with a tremendously positive impact on jobs and farmers’ income.

Mandating the use of E10, as we have already been told, would help us fulfil our commitment to the Climate Change Act 2008, in which the UK led the way in a legally binding 2050 target to reduce emissions by at least 80%. Furthermore, the EU renewable energy directive set a target for the UK to produce 15% of its energy from renewable sources by 2020.

The Government launched a consultation on E10 last summer and evidence was submitted on whether and how to best introduce E10 petrol. However, the consultation ended four months ago and still the Government have not stated whether they will support it. The perception is that the Government have been dragging their feet on this issue. For me, implementation of E10 is a no-brainer, as it is for others. Support for fuel with a higher bioethanol content is widespread, from farmers and car manufacturers to environmental campaigners and motorists. It is a puzzle to me why the Government have not made it mandatory at UK pumps before now.

The National Farmers Union also supports the call for E10 as it provides vital opportunities for thousands of farmers, including the seven in my constituency. Without the bioethanol industry, farmers who sell crops for bioethanol production would be forced to export their crops and they would lose, as I said earlier, £10 a tonne if they did that. There are plenty of reasons for the Government to stop dragging their feet and make a positive decision to benefit people in my constituency and further afield, and hundreds of jobs could be created in my constituency.

Photo of Anna Turley Anna Turley Labour/Co-operative, Redcar 3:14 pm, 16th January 2019

It is an honour to serve under your chairmanship, Mr Gapes. I thank my hon. Friend Nic Dakin not only for securing this important debate, but for all his work over many years in championing the bioethanol industry in a cross-party manner.

My constituency of Redcar is home to the Ensus bioethanol refinery, which produces fuel-grade alcohol, animal feed, and carbon dioxide for the beer and fizzy drinks industry. In November, production was paused at the facility for the fourth time since 2011 owing to difficult market conditions. I stand here today to speak up for the employees of Ensus whose jobs now hang in the balance, unsure whether the pause is another temporary blip or a death knell for their industry. One hundred Ensus workers are waiting to hear whether they have a future in an industry that has a huge role to play in this country’s transition to a greener, more sustainable economy. The plant also supports around 2,000 jobs in the supply chain across the north of England, so many people are worried about what the future holds. I sincerely hope the Minister will be able to give them some reassurance.

The Government play an important role in shaping the direction of travel for growth industries as part of the industrial strategies that we hear so much about, but it is clear that the present difficulties that the sites face have come about because Whitehall has said one thing, but done another. It has been especially equivocal in supporting the greater use of bioethanol in fuels, which is the cause of many of the industry’s problems today. The dithering must stop and this next-generation industry must be supported to be the British—indeed, the Teesside—success story that it has the potential to be.

More than 10 years ago, the Government introduced targets to increase renewables, sending a signal to the bioethanol industry that it was time to invest in the capacity needed to deliver on those targets. Since then, more than £1 billion has been invested in state-of-the-art facilities by bioethanol companies. In 2015, when the Department for Transport’s taskforce recommended increasing fuel blend levels to 10%, a further signal was sent to the industry that the Government were fully behind the industry and many in the sector prepared for the future. However, more than three years later, the consultation has only just concluded and we are no further forward. Now the UK’s two largest plants, Ensus in my constituency and Vivergo in Hull—I pay tribute to my hon. Friend Emma Hardy, whose excellent speech was full of passion and a commitment to fight for her constituents’ jobs—have announced they will either close or pause production, demonstrating how fragile the situation is. Jobs in the bioethanol industry and the closely connected agricultural sector hang in the balance. Under this Government, my constituency has already been forced to handle many industrial job losses—more than 3,000 when our steelworks closed—and I do not want to see another industry close its doors for good.

Some of the questions that we need to hear the Minister answer today—I remind her that employees are watching and listening closely—include how she plans to reverse the industry’s decline in 2019 and give it the support it needs. Will she commit to giving British bioethanol a future, or will the UK source it from abroad when domestic capacity is lost? As we have already heard today, there are wider implications for other renewable energy producers. Why would investors trust the Government’s word and put hundreds of millions of pounds into projects that we desperately need in this country, when, given the experience of the bioethanol project, they might later prove out of fashion with this Government? Certainty and stability is vital for business, and the sector is clear that that has to mean making E10 mandatory for fuel suppliers. Anything less will not provide sufficient confidence that the demand for E10 is there, and the facilities will close for good.

As my hon. Friend Phil Wilson mentioned, there is a concern for the agricultural sector, too, which produces the feed wheat for the industry and consumes the high protein animal feed co-produced by it. The two industries work hand in hand, serving as a stable and reliable co-dependent supply chain. We are not talking about backing E10 for the sake of the producers. We know there is a strong environmental case for introducing E10, reducing carbon emissions equivalent to the removal of 700,000 cars from Britain’s roads, and improving air quality by lowering carcinogens, particulate matter, hydrocarbons, and oxides of nitrogen. Given that transport is now the UK’s most polluting sector, accounting for 28% of the UK’s greenhouse gas emissions, we will not meet our climate change targets without getting to grips with the problem.

Since 2016, E10 has been the optimal reference fuel for all new cars, meaning some 3 million new vehicles are now ready to use it, and more than 95% of cars—those built since 2000—are warrantied for the use of E10, so there can be no concerns that our nation’s vehicles cannot cope with this blend.

This debate is extremely important today because we need the Government to recognise how vulnerable this British industry is, and we need urgent action on E10. I wrote to the Transport Secretary in October to ask for greater urgency in supporting E10. I have also asked many questions in Parliament, as have other colleagues here today, yet here we are with another consultation while jobs in the industry look more vulnerable by the day. Ensus employees in my constituency and people working across the industry and in the supply chain are waiting for reassurance that urgent action from the Government will be forthcoming. I hope to hear that from the Minister today.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy) 3:19 pm, 16th January 2019

It is a pleasure to serve under your chairmanship, Mr Gapes. I too congratulate Nic Dakin on bringing forward the debate, as well as on his work as chair of the all-party parliamentary group on British bioethanol. He has campaigned on the issue for a long time, and I commend him for that work.

The debate is clearly important for many hon. Members, given today’s turnout and considering everything else that is going on. There is a big debate on the motion of no confidence in the UK Government, yet six Members have intervened and there have been five Back-Bench speeches. That is testament to the importance of the subject and the Minister needs to take heed of that. I note that the six Members who intervened have not hung around to hear the Front-Bench speeches—perhaps I am not a draw in this debate—but they got their points on the record.

The hon. Member for Scunthorpe highlighted the critical state of the industry—the partial collapse that has already happened, the job losses to date, and the fact that it is four years since the Government seemed to be going down the route of making E10 mandatory. Obviously, real frustrations come with that situation. He made an excellent opening speech and raised the key issues. In discussing concerns about the effect on cars, he highlighted the fact that only 5% of cars now on the road are likely to have issues with E10, and confirmed that E5 would not have to be phased out but could remain as a fuel for classic cars. I like the suggestion that tax measures could be used to offset costs for people who might be affected. Considering how we treat classic cars for tax purposes at present, that seems a reasonable suggestion.

As always, we heard from Jim Shannon. All the other Members who spoke concentrated on direct jobs, but he focused on farming and the benefits to be gained for all. I do not think anyone could argue with that philosophy. The hon. Members for Stockton South (Dr Williams), for Stockton North (Alex Cunningham) and for Redcar (Anna Turley)—it is not the first time I have seen the Teesside Collective in action—rightly spoke about jobs in their constituencies, how important the financial hit taken by those constituencies is, and what it means for the wider UK economy. The hon. Member for Redcar mentioned that the area has suffered other job losses, and that it cannot afford to continue to suffer such losses. That is something else that the Minister needs to consider.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

The way we understand the Teesside Collective—besides as my colleagues and myself—is as the organisation that has led the way on carbon capture and storage on Teesside. Of course we are hopeful that there will be an amazing plant there. Will the hon. Gentleman join me in commending the collective for the work it has done to secure the plant for Teesside?

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

I am more than happy to commend it for that. It is important work on an important environmental issue. When we think about it, that is what we are considering—environmental improvements with E10. Carbon capture and storage would certainly do likewise, and I hope that the work will reach its conclusion.

I am a member of the all-party British bioethanol group and have signed the pledge on E10. I urge any hon. Members who have not yet signed it to do so, and to show cross-party support. The hon. Member for Scunthorpe, talking about the future of the bioethanol industry, highlighted the critical stage that things have reached. We have heard about the job losses to date. Government action is required. It could be argued that there is an issue of vested business interests when the bioethanol industry campaigns for mandatory E10. However, as other hon. Members have pointed out, there are clear merits in the E10 proposals, so it makes no sense that the UK Government have been dragging their heels. I hope that the Minister will tell us today why they have done that so far, and what they will do to move things forward positively. She has listened to the speeches, but have she or the Government estimated how many jobs are at stake? How many could be created if Ensus were to get back up and running, and what would the long-term future be with respect to developing mandatory E10?

Transport accounts for approximately a quarter of energy demand, but it lags behind other energy sectors in carbon reduction measures. The bioethanol industry estimates that the introduction of E10 would deliver something equivalent to taking 700,000 cars off the roads, although, interestingly, the hon. Member for Stockton North gave an upper estimate of 1.35 million cars. Have the UK Government done any analysis of what introducing E10 would equate to, in relation to carbon reduction measures?

The hon. Member for Stockton North highlighted the fact that bioethanol blended with petrol reduces carcinogens and particulate matter and can reduce nitrogen oxide emissions, and commented on what that means for air quality. As a doctor, the hon. Member for Stockton South highlighted the medical issues associated with air quality, and we now know that 40,000 premature deaths a year arise from air quality issues. The UK Government have lost in the High Court three times in proceedings about their air quality plan, so what consideration have they given to the air quality benefits and the long-term impact on health of the mandatory introduction of E10?

Has the Minister considered the benefits of E10 that other countries have assessed? It accounts for 95% of petrol sales in the US and is the biggest selling petrol fuel in France, Belgium, Australia and Canada, among others, so it is commonplace in all the other developed countries. Why is the UK lagging behind? Cars are now designed to run on E10, so new cars running on E5 are running inefficiently. Why would we want that? It means greater fuel use and greater emissions. Let us get E10 and make today’s cars more efficient.

The Government may see electric vehicles as a decarbonisation silver bullet but, given that average sales of those vehicles still hover around the 1% bracket, we are a long way from the critical mass of electrical vehicle use that would make a huge difference to carbon reduction. If the Government will not invest enough to get electric vehicle uptake to that critical mass, they need to consider such transitional decarbonisation measures as mandatory E10 and liquefied petroleum gas.

One welcome UK Government measure is the staged increase in the renewable transport fuel obligation from 4.75% to 8.5%, from this month. It is therefore counterintuitive for them not to introduce E10 as a mandatory measure. I would like the Minister to comment on what seems to be disjointed thinking, and what the Department for Transport will do to rectify it.

Hon. Members have talked about the importance of E10 for jobs, air quality and the environment. Why would we want to rely on imports of biofuels in the future, when we could have a fantastic industry in the UK? I make the same plea that everyone else has made, to bring forward E10 as a mandatory measure.

Photo of Matt Rodda Matt Rodda Shadow Minister (Transport) (Buses) 3:28 pm, 16th January 2019

It is a pleasure to serve under your chairmanship, Mr Gapes. I pay tribute to my hon. Friend Nic Dakin for securing this important debate on an issue that he is committed to. He is a great champion of the biofuel industry.

As we have heard, the bioethanol industry contributes £600 million to the UK economy every year. Over the past 10 years there has been an investment of over £1 billion in bioethanol production facilities. When it comes to greenhouse gas emissions, transport is clearly the biggest offender, contributing 28% of the UK total, as well as contributing to air pollution, as we have heard. I am sure that we all agree that is a serious public health issue. Under the Government’s current plans we are not on course to meet our existing climate change targets under the Climate Change Act 2008. Indeed, last January the Committee on Climate Change warned the Government that their clean growth strategy does not go far enough and that urgent action is needed to meet our legally binding carbon reduction goals in the 2020s and by 2030. In June last year the CCC again warned the Government that we will not meet our targets unless they bring forward new policies such as the introduction of E10.

We know that bioethanol fuel is good for the environment, and that introducing E10 would be equivalent to taking 700,000 cars off the road. E10 petrol is already available in many western countries, such as France, Germany and Finland, and colleagues have also mentioned New Zealand, Australia and the United States. According to the Renewable Energy Association, the introduction of E10 in the UK would be equivalent to replacing 2 million petrol cars with fully electric vehicles. Does the Minister agree that the failure to mandate E10 will make achieving Government targets to source more of the UK’s energy needs from renewable sources more challenging?

Labour supports the growth and development of our renewables industry in order to support high-skill and high-wage jobs across the UK, particularly in the north of England, where colleagues have eloquently highlighted two major areas. The Government’s failure to support the UK bioethanol industry has led to the loss of around 1,000 skilled jobs. In September, Vivergo Fuels, which is the largest bioethanol producer in the UK, announced that it was ceasing production and moth- balling the plant based in east Yorkshire, which employed 150 people directly and indirectly supported 3,000 jobs. Here I will make a local plug because I know that my hon. Friend Karl Turner—he wanted to attend this debate but could not due to another commitment—raised that point with the Minister at the time. Vivergo was an official northern powerhouse partner, which perhaps tells us something about the Government’s commitment, or lack of it, to the north of England.

One factor leading to the closure of that plant was the Government dithering and delaying their decisions. Does the Minister have a plan for replacing those lost jobs? Does she think that the collapse of the bioethanol industry last year will deter investors from investing in the renewable energy sector? The industry has been calling on the Government to make E10 mandatory at UK pumps. The Government have said that they would like a market-led solution, but petrol companies have pointed out that without a mandate from the Government such a solution cannot be introduced.

The Government also recently closed a call for evidence, which probably means that we are at least another year away from any introduction of E10. I do not believe that the call for evidence will tell the Government anything they do not already know. Will the Minister say when the response to the DFT consultation that closed in September will finally be published? The Government’s lack of leadership and action has led to job losses and the collapse of a key industry. How does the Minister plan to reverse that collapse? Will she now listen to the industry and mandate E10? I look forward to hearing her response.

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury) 3:32 pm, 16th January 2019

It is a pleasure to serve under your chairmanship, Mr Gapes, and I must get it out into the open that I am not the Minister responsible for roads, and neither have I been promoted to that position. Unfortunately, the Minister of State, Department for Transport, (Jesse Norman) is taking part in a debate on a statutory instrument, and I am doing my best to step in. I know it was a bit of a disappointment to one of our colleagues to find that I am not a he but a she.

I congratulate Nic Dakin on securing this debate. Low-carbon fuels such as bioethanol play, and will continue to play, an important role in meeting the UK’s carbon budgets. During this debate, and in parliamentary questions, Members with constituencies in and around Hull and Teesside have made clear the wider economic benefits of UK bioethanol production, and the environmental benefits of deploying bioethanol as a transport fuel. Some may consider that to be a niche matter, but the contributions we have heard today show that it is a nationwide issue.

I had not realised that there was a Teesside collective, but now I see how powerful that force is. I thank the hon. Members for Stockton North (Alex Cunningham), for Sedgefield (Phil Wilson), for Kingston upon Hull West and Hessle (Emma Hardy) and for Redcar (Anna Turley), and my hon. Friend Martin Vickers for their passionate contributions and representations on behalf of the bioethanol industry and their constituencies. I believe that I will cover many of the issues that they raised, but if I do not address them all, the Minister of State will no doubt respond in writing.

The Government understand the potential benefits of the bioethanol sector, and we stressed the benefits of E10 when advancing draft legislation last year—legislation that doubled targets for the supply of renewable fuel between 2018 and 2020. That provided space for a roll-out of E10 should suppliers choose to deploy it. Concerns about not having a clear legal mandate for E10 are well understood by the Department. In September last year, we concluded a call for evidence on whether and how E10 might be introduced in the UK, and if introduced, how it could be done in a way that addresses the concerns of retailers, fuel suppliers and motorists. The Department has now analysed the responses to that consultation and hopes to publish the Government’s response soon. We are continuing to work with the bioethanol industry. Indeed, I understand that the Minister of State hopes soon to meet the hon. Member for Scunthorpe and representatives from the bioethanol industry, and I believe that a date for that has been set in the diary.

Photo of Paul Williams Paul Williams Labour, Stockton South

The Minister said that the Government hope to publish a response to the consultation soon, but that is not particularly helpful for people working in the industry who have a mothballed plant and are waiting for a Government decision on the future of their industry. Is there any possibility of the Minister being a little more specific about what “soon” might mean?

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

The hon. Gentleman spoke passionately about the Ensus plant in Wilton in his constituency. I cannot make that commitment here and now, but a meeting is due to take place—it is in the diary—and there will be further clarification after that. As has been said, that meeting will be open to all those who wish to attend. I cannot give that confirmation right now, but we are committed to working with the sector to ensure that the plants are open and running as soon as they can be.

Plant closures were discussed throughout the debate. The hon. Member for Kingston upon Hull West and Hessle made a very passionate contribution, but I must take her up on one point. I know that she wants this debate to be as respectful as possible, because we do not want to reflect what is happening in the main Chamber on all occasions. She mentioned a Government promise, but I would argue that it was never a promise—we must be clear if something is a Government intention and how that should be perceived, as it is very different from the word “promise”. We must ensure that we are honest in our contributions.

Photo of Emma Hardy Emma Hardy Labour, Kingston upon Hull West and Hessle

The words I was using were those of the industry, so if the Minister has an issue with a promise being made by the Government, perhaps she should take that up with the industries involved. There is no way that any industry would invest many millions of pounds on a mere suggestion that the Government might be interested in it in future, and if they had not been led to believe that it was indeed a Government promise.

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

An interpretation of how a Government may respond and a promise are two very different things. The Department is working closely with the sector and will do what it can to support it. We must ensure that we understand the difference between what is and is not a promise.

We heard passionate contributions about the bioethanol sector and businesses in Members’ constituencies, and the halting of bioethanol production at Vivergo Fuels and Ensus plants last year is saddening and regrettable for all those impacted. I understand the frustration of those calling on the Government to act quickly to mandate the introduction of E10.

Photo of Paul Williams Paul Williams Labour, Stockton South

Does the Minister accept that the sole reason for the closure of the Vivergo plant and the halting of production at Ensus was the Government’s procrastination?

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

That is an interesting way of responding to how the business environment is dealing with global issues beyond what the Government may or may not have intended to do, so I do not accept that point.

It is clear that UK producers of bioethanol from wheat have faced challenging market conditions, due in part to high wheat prices following a hot summer, and a low bioethanol price—that may in some way answer the hon. Gentleman’s question. However, it is by no means clear that an E10 mandate would address all the challenges that the UK bioethanol industry has faced. It is also clear that the introduction of E10 is not without barriers, including the need to take into account the concerns of a significant number of owners of vehicles that are not compatible with E10—that point was raised earlier in the debate. To be successful, it is vital that any introduction of E10 is backed by fuel suppliers and consumers alike.

Since its inception, the policy on biofuels in the UK has been complex and not without controversy. Immediately after the renewable transport fuel obligation scheme—RTFO—was set in law in 2007, the Gallagher review into the indirect effects of biofuel production was published. It became clear that to maintain faith in the emissions reductions achieved and to retain consumer buy-in, we would have to address the negative indirect effects of certain biofuels. To reward fuels that may perform worse than the fossil fuels they replace would have undermined the rationale of a scheme designed to reduce greenhouse gas emissions.

It was with those challenges in mind that the Department jointly established a transport energy taskforce with the Low Carbon Vehicle Partnership, to consider how biofuels can contribute to meeting our climate change commitments in the context of measures introduced to address the negative indirect impacts of some biofuels.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

The Minister said a few minutes ago that some cars might not be compatible with E10 or even E5. Of course that is the case, but there are always alternatives at the petrol stations pump: diesel, fuel with bioethanol included or ordinary unleaded petrol. I cannot see that as the barrier that she described.

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

I do not think I described it as a barrier but a challenge. We must understand needs and impacts on consumers, which is why we should not rush, but ensure that what we do has a positive impact on all people.

Photo of Greg Knight Greg Knight Conservative, East Yorkshire

I think the point made by the hon. Member for Stockton North is a good one: a choice of fuels available at the pumps needs to remain, and those fuels need to be properly labelled so that owners of cars not compatible with E10 are made aware.

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

My right hon. Friend makes a very valid point about choice; there should choice also in the cost of refuelling cars and appropriate labelling, too.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

The changes to labelling that must take place would be an ideal opportunity to introduce E10. It would get the public information out at the same time the Government do what they need to do anyway.

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

Indeed; that is why the consultation took place. As the hon. Gentleman knows, he can take up those issues further with the Minister of State, which is why we need to ensure that when we respond, we take into account all the issues raised in this debate.

The taskforce report to Government noted not only the potential benefits of E10 in helping the UK to meet our renewable energy targets, but the barriers and risks associated with its introduction, not least in respect of ensuring consumer acceptance. It is clear that UK suppliers, including of bioethanol, have made great progress in ensuring that renewable fuel delivers reductions in greenhouse gas emissions.

Since the RTFO was introduced in 2008, savings in greenhouse gas emissions have increased significantly from 46% to 70% in 2014-15. Latest data suggest that current biofuels provide an average 71% reduction in greenhouse gas emissions even when land use change impacts are included, but it has always been essential to evolve the policy on biofuel. That way, we maintain the integrity of the schemes that promote its use, such as the RTFO.

Following the work of the taskforce and building on the success of the RTFO, in September 2017, the Government set out a 15-year strategy for renewable transport fuels. The strategy established an investment platform to develop sustainable advanced fuels for automotive, aviation and road freight. I am proud to say that, as part of our strategy for renewable fuels, in March 2018, regulations were agreed that make the UK the first to set targets for renewables in transport beyond 2020, all the way to 2032; and the first and only country to set development fuel targets to drive a market for advanced low carbon fuels. For the first time, we have made aviation fuels eligible for reward under the RTFO. Our 15-year strategy for renewable transport fuels is designed to maximise the industrial opportunities to be gained for the UK while maintaining public confidence in the value of renewable fuels.

The hon. Member for Scunthorpe has previously shown support for increased biofuel supply targets in the 2018 regulations. He has also been clear in calling for a mandated introduction of E10. As I said, I am not in a position here and now to update colleagues on when we will publish a response to last year’s consultation on whether and how to introduce E10, but E10 is our main focus in the biofuels policy area. We are working hard to publish the Government response as soon as possible.

Photo of Paul Williams Paul Williams Labour, Stockton South

I understand that the Minister is not in a position today to tell us when the response will be published, but if I were the owner of a mothballed plant, probably trying to persuade my bank and investors, I would need some kind of certainty. Would the Minister pledge to write to us in the next week to give us a date on which the consultation response will be published, just to help the businesses that need certainty to make future decisions?

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

The hon. Gentleman once again champions the employers in his constituency very well. As I said, I do not believe that the time it has taken to ensure we make the right decision on E10 via the consultation is the only reason those businesses are in a challenging position. As I mentioned, a meeting is due to take place; that meeting will be the best time and place for a letter to be forwarded. The hon. Gentleman will be in the best place to challenge the Minister of State and get the responses he needs.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons)

Do the Government see the British bioethanol industry as an important industry to the UK? If time continues to disappear, the industry will disappear and we will have to rely on imports.

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

Indeed, and I apologise if I have given any other interpretation. Without wanting to give a promise, we see this sector as very important to what we are trying to achieve.

Photo of Anna Turley Anna Turley Labour/Co-operative, Redcar

I am deeply frustrated that the consultation closed such a substantially long time ago. Can the Minister identify the barriers in the civil service and the ministerial process to getting a decision? In the light of today’s debate, was there not some kind of briefing, impetus or a rocket put under this urgent issue? Will the Minister confirm that, following this debate, a rocket is under it?

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

The Teesside massive, as I will call them, have no doubt put this issue back firmly on the Minister’s agenda, although no doubt it was already there. We always want to ensure that any consultation we undertake provides a good response to all involved—not just the sector providing the fuel but those putting the infrastructure in place and owners of classic or older cars.

There was mention of the impact on international roll-out. I was reflecting that the roll-outs in Europe have been quite mixed: in some places, they have done well and in others they have not fared as well as one might have assumed. We have to ensure that we get this right. I am hearing, and no doubt the Department is too, frustration at getting a response. That is why a meeting was agreed.

Photo of Emma Hardy Emma Hardy Labour, Kingston upon Hull West and Hessle

I am sure the Minister understands how frustrated everyone feels, including businesses. To go back to the central point of my speech, does the Minister not acknowledge that trust in the Government will be undermined, potentially undermining investment in areas such as ours, where it is desperately needed?

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

When Government make rash decisions that are not fully thought through, when a sector is involved, that further undermines trust in Government. That is why it is our responsibility to ensure that we get the right decision. Unfortunately, on occasion, that can take time. The hon. Lady’s frustration has no doubt been noted. It is absolutely right that if and when we roll out E10, we do so in a successful way, not least for EU bioethanol suppliers.

Given the barriers to introduction, it is right that we have taken time to learn from the experiences, good and bad, of the roll-out of E10 in other countries. If a decision were taken to mandate E10 further to last year’s call for evidence, we would also need to test the costs and benefits against firm proposals, ensuring that all those with an interest, including fuel retailers and motorists in particular, have an opportunity to submit evidence. If E10 is rolled out in future, the Government remain committed to ensuring that E5 remains available and that any introduction of E10 is well managed, with information on compatibility made available to vehicle owners.

Photo of Anna Turley Anna Turley Labour/Co-operative, Redcar

I appreciate the Minister giving way—she is being extremely generous with her time. I want to pick up the point about costs. We know that the cost of ethanol is lower than oil; unfortunately, bioethanol is currently more highly taxed than petrol, which makes E10 fuels about 1p more expensive—about £20 per year for the average motorist. Tax incentives are extremely important to incentivise behaviour. Are the Government looking at tax incentives to encourage the roll-out?

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

The Government will be looking at all issues to ensure that, if a roll-out is suggested, it is an option favourable to those pulling into petrol stations. That is why it is interesting to learn what has happened in Europe. In France, I believe, the roll-out was more underwhelming than had been expected and in Germany it did not deliver the impacts that had been hoped, so it is important that we look at this closely.

Photo of Paul Williams Paul Williams Labour, Stockton South

Is the Government’s view that they need to mandate the roll-out or that the industry should lead the roll-out itself, without a Government mandate?

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

The hon. Gentleman is trying to tease out a statement from me, when he knows that he has to wait for the consultation to get the response that he wants. I thank him for his tricky intervention, but he will have to wait for the consultation response to get the answer.

The Government agree that the aim must be to reduce emissions and that low carbon fuels must play a part. The regulations made last year introduced a greenhouse gas reduction obligation on suppliers and incentives for the development of fuels capable of delivering higher greenhouse gas emissions reductions. These allow us to reward low carbon fuels because of the emissions reductions they deliver. We have also made £20 million of match capital funding available under the future fuels for freight and flight competition. In the wider context, the Government have recently published two major strategies focused on combating climate change and improving the UK’s air quality. Our Road to Zero strategy sets out a clear pathway to zero emissions vehicles by 2050, and this week we have published our clean air strategy. The pathway is not just about driver behaviour and electrification. Low-carbon fuels will continue to play a vital role in reducing greenhouse gas emissions from the vehicle fleet.

The renewable transport fuel obligation, as amended last year, is expected to save nearly 85 million tonnes of CO2 over the 15-year period from 2018, which represents around a third of transport’s projected contribution to UK carbon budget savings during the 2020s. In achieving those savings there is an opportunity to increase the amount of bioethanol in petrol, from 5% today up to 10%.

Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

The Under-Secretary is doing a grand job stonewalling on behalf of the Minister of State. If there is one message that we would ask to be taken back, it is that we desperately need a date and we need that certainty. Will she commit to go to the Minister and say, “Look, these guys are going to bash your door down if you do not actually make a decision and make it soon”?

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

I believe that the door has already been bashed down, because a meeting is set in the diary.

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

That meeting is in place with the Teesside massive, as I am referencing them now. I completely understand the frustration about not having a date, but we need to make sure that we get this absolutely right. A meeting is a place and that can be raised directly with the Minister.

It is not agreed that there is conclusive evidence to show that switching from E5 to E10 will have a significant impact on air quality but I would like to assure Members that, as with all policy on low-carbon fuels, we will continue to assess our policies and support against the ambitious targets we have set to improve air quality and reduce carbon emissions.

If we were to mandate E10, it could give suppliers an opportunity to meet those carbon budget targets in a more cost-effective way. That is why the Department has consistently made clear its desire to work with industry in considering an E10 roll-out. The Government are mindful that rolling out E10 is a huge change to the UK petrol market. If such a roll-out were not managed well, it could impact on motorists across the UK. It is important that we prioritise consumer acceptance and ensure the vehicle fleet, consumers and retailers are ready. As was raised throughout the debate, that is a big responsibility for Government to undertake. We need to make sure that everybody is ready and any decision we make is not rushed.

I would like to thank everyone who contributed to the debate for taking the time to further inform our thinking on E10. I must not forget the intervention made by Jim Shannon.

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury)

Forgive me. I know that the hon. Gentleman has spoken very positively about the bioponics of E10. The bioponics will be accounted for in our response to the consultation when it is published.

I thank everyone for contributing to the debate. The use of biofuels is and will remain a challenging policy area. However, this must never stop us from finding the right balance between maximising the contribution that low-carbon fuels can make to reducing greenhouse gas emissions and taking into account the interests of consumers.

Photo of Nicholas Dakin Nicholas Dakin Opposition Whip (Commons) 3:54 pm, 16th January 2019

I thank all hon. Members who contributed to the debate. As Alan Brown pointed out, 11 Members contributed in speeches and interventions. I have underlined the importance of the industry for high-quality jobs, green jobs, farming, air quality and carbon reduction targets. It is a very important issue, which has been properly underlined.

I welcome the fact that in her conclusion the Minister said that she and the Government want to work with the industry to deliver an E10 roll-out, if that is what comes out of the consultation. I hope she heard my hon. Friend Anna Turley, who asked her to take a rocket from the debate, so we can get a date and know what is happening. I look forward to meeting the Minister of State next week, with colleagues across the House and representatives of the British bioethanol industry. We will further the argument and hopefully get good responses from him, on behalf of the Government, so we can go forward effectively and make sure that the British bioethanol industry is one not only for now, but for the future, and will contribute significantly to what is happening.

Question put and agreed to.

Resolved,

That this House
has considered the future of the British bioethanol industry.

Sitting suspended.