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Energy: Biofuels — Question
Earl Attlee (Whip, House of Lords; Conservative)My Lords, the Government meet regularly with stakeholders in the biofuels industry, at both ministerial and senior official level. The subject of increasing the level of the UK's biofuels supply mandate is often discussed. Since it was introduced in 2008, the mandate has been increased each year and will rise again from 4.5% to 4.75% this April.
Baroness Worthington (Labour)My Lords, the British biofuels industry employs 3,500 people, helps to boost farm productivity, reduces imports of animal feed and has incredibly high sustainability standards. We need biofuels to contribute towards our legally binding renewables targets; yet, as of next week, the size of the market for biofuels in the UK will be frozen. Will the noble Earl undertake to meet representatives of the industry to discuss a more sensible way forward so that the industry can continue to grow and deliver investment and jobs, which is what we need?
Earl Attlee (Whip, House of Lords; Conservative)My Lords, I can assure the noble Baroness that ministerial meetings will continue. I am not sure that it would be helpful for me to have meetings because I do not think that I can add anything to the work that my honourable friend Norman Baker undertakes. However, it may be helpful if I explain the problem to the House. The noble Baroness and I desire the same end state: the reduction of carbon emissions. The problem, however, is that if we increase the level of obligation at the moment, there may be undesirable, indirect land-use change problems right around the world, and that could increase the level of carbon emissions. It certainly would not reduce them to the extent that we would like. We have the same objectives as the noble Baroness—I assure her of that—and we still have the ability to get to where we want to in 2020, but we have to be mindful of indirect land-use change problems.
Lord Bradshaw (Liberal Democrat)Having given a modest reply to the first part of the Question and a slightly different reply to the second part, can the Minister please assure the House that the Government really take the biofuels industry seriously? For example, is he aware of plans to import through Milford Haven large quantities of biomass that is derived not from food crops but waste products from elsewhere? Is it not time that we see some of these strategies come to fruition, rather than the present process, which seems to shilly-shally about in minor adjustment here and there?
Earl Attlee (Whip, House of Lords; Conservative)My Lords, we take the biofuels industry seriously; it is an important industry. However, we must have regard to the fact that we are regulated by EU and World Trade Organisation free-trade rules, and we therefore cannot put in measures specifically designed to protect the UK biofuels industry.
Lord Kennedy of Southwark (Labour)My Lords, what does the noble Earl's department intend to do to support small companies that make biofuels from locally sourced used cooking oil?
Earl Attlee (Whip, House of Lords; Conservative)My Lords, I know that the noble Lord is a great supporter of the used cooking oil biofuel industry, and it is important. In a previous exchange, he raised the dual obligation to avoid the problem of large-scale ethanol imports disrupting the market for used cooking oil for the biodiesel market. I have raised this matter with my right honourable friend the Secretary of State but I go back to the point that I made to the noble Lord, Lord Bradshaw: we have to be careful to avoid setting regulations that favour UK industry, because we will rapidly come unstuck if we do so.
The Duke of Montrose (Conservative)My Lords, what proportion of current demand under the renewable transport fuel obligation is met domestically and what part has to be imported? Is the domestic industry capable of producing economically against, say, the like of Brazilian ethanol?
Earl Attlee (Whip, House of Lords; Conservative)My Lords, I do not have the figures to hand but I can write to my noble friend with any details that I have—and I am sure that I have some. The current trading period will end shortly and the figures will then be analysed. When we have those figures, we will have a better understanding of how the UK biofuels market works. However, we have to wait until the end of the trading period.
Lord Soley (Labour)One thing troubles me. The Minister will know—this refers back to his first Answer—that not all biofuels require extensive land use, algae being an obvious example. However, there are also land-use biofuels, such as in the desert and less arable areas which are wide open for development. Frankly, the British biofuels industry would like to be at the forefront of that, and I wonder whether we should be doing much more about it. Does he agree?
Earl Attlee (Whip, House of Lords; Conservative)I agree with much of what the noble Lord says. There are what are termed "advanced biofuels", which do not have a land-take impact—certainly not in terms of taking land out of agricultural use or requiring a reduction in rainforest. Moreover, they do not have an impact on food production. Consideration is being given to greater incentives for the production of advanced biofuels.
Earl Cathcart (Conservative)My Lords, will increasing the use of biofuels increase or decrease the price at the pumps?
Earl Attlee (Whip, House of Lords; Conservative)My Lords, my noble friend asks an important question. The obligation system increases the price of fuel at the pump. It is, in effect, a hidden subsidy, and it works in a very similar way to the renewables obligation for electric power.
Lord Berkeley (Labour)Is the noble Earl aware that the addition of biofuels to diesel does quite a lot of damage to engines which stand idle for a long time, such as those of boats and agricultural vehicles? Does he have a solution to this or is the answer to buy non-biofuel diesel for certain uses, such as those I have mentioned?
Earl Attlee (Whip, House of Lords; Conservative)My Lords, the noble Lord and I discussed this during consideration of the renewable transport fuel obligation order in Grand Committee. I admitted that there are some handling problems in keeping biofuels in tanks for a long time, as the fuel needs to be circulated. I am confident that the appropriate publications, magazines and so on will alert users to the need to circulate the fuel, but the noble Lord makes an important point.