Motor Fuel (Composition and Content) (Amendment) (Northern Ireland) Regulations 2022
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Baroness Vere of Norbiton
That the Grand Committee do consider the Motor Fuel (Composition and Content) (Amendment) (Northern Ireland) Regulations 2022.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, these regulations relate to the introduction of E10 petrol in Northern Ireland. Regulations relating to the introduction of E10 petrol in Great Britain were considered and agreed to by your Lordships’ House in 2021, and I should note that this introduction has been successful, with no significant concerns raised.
E10 petrol contains up to 10% of renewable ethanol, double the amount blended into E5 petrol. Increasing the renewable ethanol content in standard grade petrol across the UK can reduce annual carbon dioxide emissions by 750,000 tonnes a year, helping us to meet our ambitious climate targets. The regulations’ purpose is to introduce E10 as standard petrol in Northern Ireland, while ensuring that the current E5 grade remains available for those who need it. This will bring petrol grades in Northern Ireland in line with those in Great Britain, where E10 was introduced in September 2021. We have completed the notification procedures required under the Northern Ireland protocol, meaning that an introduction in Northern Ireland is now possible.
E10 allows us to cut carbon emissions from cars, motorbikes and other petrol-powered equipment in use on our roads today. This is done by simply increasing the amount of renewable fuel blended into standard petrol. It is one of very few measures available to us which has an immediate impact. E10 is a proven fuel that has been successfully introduced in Great Britain and many nations around the world to deliver carbon savings. Following the introduction of E10 in Great Britain last year, these regulations ensure that consumers are provided with a consistent petrol grade across the UK. It is worth noting that the Republic of Ireland intends to introduce E10 in January 2023.
The UK has a valuable bioethanol industry, which has already benefited from the increased demand created by the introduction of E10 in Great Britain. Following our policy announcement to introduce E10 across the UK, one large facility operator announced that it would recommence production. The domestic bioethanol industry supports high-skilled jobs and improves our energy independence, delivering on a range of government priorities such as growth and energy security.
These production facilities also play an important role in their local economy, employing hundreds of skilled workers directly and supporting thousands of jobs in the wider community. That community includes the agricultural sector, with locally grown, low-grade feed wheat used to produce ethanol. Furthermore, valuable co-products of bioethanol, such as high-protein animal feed and stored carbon dioxide used by the food industry, reduce our reliance on imports, thus increasing our domestic resilience. It is vital to support these industries as we grow our economy and progress towards net zero by 2050.
Introducing E10 is part of a wider set of measures to encourage renewable fuels. Overall, renewable fuel blending is incentivised through the renewable transport fuel obligation, or RTFO, obligating larger fuel suppliers to supply renewable fuels. However, the RTFO does not prescribe how to meet low-carbon fuel supply targets, nor does it require specific fuel blends; it is market driven. It is therefore necessary to introduce the obligation to supply specific fuel blends to remove market barriers. This has been proven to be successful by the introduction of first E5 and then E10 petrol in the UK, as well as B7 diesel.
We have opted for introduction in Northern Ireland in November, as fuel suppliers and retailers have made it clear that an introduction at the same time as or shortly after the change from summer to winter fuel specification is the most efficient way to introduce E10 into the fuel system.
Over 95% of petrol-powered vehicles on the road are compatible with E10 petrol, and this figure is increasing all the time. All new cars manufactured since 2011 are compatible with E10 petrol, and most cars and motorcycles manufactured since the late 1990s are also approved by manufacturers to use E10. However, some older vehicles are not cleared to use E10. That is why this instrument includes provisions to keep the current E5 petrol, which contains up to 5% ethanol, available in high-octane “super” grade.
The same set of derogations and exceptions that apply to the supply of E5 and E10 in Great Britain in case of supply issues or infrastructure constraints will apply in Northern Ireland as well. This means that very small filling stations will be exempt from having to sell E10. Additionally, if supplying petrol with the required minimum ethanol content is not feasible for short periods of time, say due to factors such as technical or supply issues, the Secretary of State for Transport can grant refineries or blending facilities temporary derogations to ensure that fuel supply is not interrupted.
We have launched a comprehensive communications campaign involving local radio, roadside posters, social media and information at forecourts. This informs motorists in Northern Ireland of the changes that will be made to petrol this autumn—subject, of course, to the approval of this instrument—and directs vehicle owners to GOV.UK, where there is an online compatibility checker so that people can see whether their car is compatible.
In proposing this statutory instrument, my department has carefully considered a balance of interests, as we did when we introduced E10 petrol in Great Britain. I beg to move.
Baroness Randerson (LD)
My Lords, I thank the Minister for her excellent introduction. Obviously, we welcome this statutory instrument. However, I want to use this opportunity to register my concern at the continued lack of an Executive in Northern Ireland. That is an issue that goes well beyond this. The lack of the Executive serves the people of Northern Ireland very badly indeed, condemning them to the slow lane on so many important issues. There is an example in this SI of how they are disadvantaged.
Paragraph 12.6 of the Explanatory Memorandum makes clear that the “added complexity” of supplying 95 octane E5 grade fuel to Northern Ireland while the rest of the UK has moved on to E10 grade has, not surprisingly, meant additional costs to producers. It goes on to make it clear that producers have had to provide
“separate production processes and storage.”
Paragraph 12.3 says that the costs of this have
“already been passed on to motorists in Northern Ireland”,
even though they have not been enjoying the advantages of it. They are paying the price without getting the benefits. Happily, however, this SI brings Northern Ireland in line with the rest of the UK. Presumably the SI includes any useful lessons learned from the Great Britain implementation. Maybe the Minister could tell us whether any specific issues have been incorporated as a result of this.
I have a few questions. The Minister has answered the first one; I was going to refer to the tight timescale. I see that the Government have anticipated that and have launched their information and awareness-raising campaign. There are older vehicles that are incompatible, of course, and there will continue to be supplies of the old grade of fuel for this reason. Classic cars might be the main reason for that, but petrol is not used just for cars. Indeed, the SI refers to its use for equipment. I declare an interest as the owner of what might politely be described as a classic petrol lawnmower. Does the public information campaign cover equipment in general—not just lawnmowers but other equipment—and not just cars? Putting the wrong petrol in can be quite disastrous.
These regulations impose requirements on petrol filling stations to supply certain types of fuel. They impose additional responsibilities on those filling stations, so I use this opportunity to ask the Minister whether the Government will give urgent consideration to requiring them also to provide electric vehicle charging points. They are beginning to do so on certain rare occasions in Great Britain. The faster this happens, the greater we can all reap the environmental advantages of electric vehicles. EVs now encompass 16% of the new car market. Petrol stations are losing their market relatively fast and need to adapt. I think an imposition—with a timescale, of course—would be very useful in ensuring that we make the transition as soon as possible.
Paragraph 7.12 refers to fuel terminals still
“unable to blend … ethanol into their petrol”
and gives them at least two years’ exemption. I am concerned that these still exist. We have known for a long time that this change was coming, so I thought providers would have adapted by now. Can the Minister tell us what percentage of terminals this applies to? Is it just one or two? I notice that apparently there are none identified in Northern Ireland. Are we talking about a big section of the market in the UK, or just one or two outliers?
Finally, the documentation states that most petrol sold in Northern Ireland—which itself represents 3.5% of the total UK market—comes from suppliers who also supply the rest of the UK. I assume that some of the petrol sold in Northern Ireland comes over the border from the Republic, and I would be interested to know what percentage. Are the rules and regulations that now apply in the Republic identical to those being imposed on Northern Ireland, or is there some variation at some point? Obviously, this would have implications in terms of the protocol as well as a practical implication for motorists. Having put forward those questions, I am very pleased to see this measure before us.
Lord Tunnicliffe (Lab)
My Lords, I thank the Minister for introducing this SI, which of course we will support. However, having done a little research on this issue, I have ended up with a few questions. First, I think she said that the situation in Northern Ireland and mainland UK will be precisely the same after 1 November. It seems to me that we have E10 and E5, and 97 and 95. As I understand it, in Northern Ireland all the E5 will be 97 and all the E10 will be 95. I should know this from when I fill up my car, but is that the situation in the UK today?
The second area I am interested in, from doing research on that glorious but occasionally seductively dangerous Google, is that there have been questions about whether there is a fuel consumption penalty. Indeed, looking it up on GOV.UK, there is an acknowledgement that there is. The government website suggests that it is 1% or 2%; some motoring magazines have suggested it is rather higher. It would not require much of an increase in overall fuel consumption to arguably negate the advantages of ethanol in the fuel.
If one is unfortunate enough to own one of the 5% of cars which, I think, are not E10 compatible—or perhaps fortunate because they are some of the nicest cars around—it seems that one would have to go to E5 97. My general experience is that 97 is substantially more expensive than E10 95, so it seems to be something of a penalty. Indeed, it might lead some people to use E10 even though they know their vehicle is incompatible. Can the Minister give us some feel for the impact on the engine of consuming incompatible fuel E10 95 instead of the E5 97 that should be used?
GOV.UK explained—it is set out in the EM—that carbon dioxide emissions are reduced by this process. I would be grateful if the Minister could explain the mechanisms by which that is achieved. I have to say that until today I thought petrol was petrol, but when I got on to Google I discovered that it is a gigantic mixture of all sorts of things, and that it varies according to the time of year, and so on. However, it is a hydrocarbon—that is, it takes its energy from releasing hydrogen and carbon from the molecules and creating water and CO2. That must be as true for ethanol because its chemical formula contains only carbon, hydrogen and oxygen, and, as far as I can tell, all the components of petrol contain carbon, hydrogen and oxygen. I therefore find it difficult to see how the emissions from the vehicle would be different. I can see that there is a difference between fuel which comes from various processing of vegetable matter, which of course captures the CO2 in its creation and then it goes through a cycle in order to be able to go into a car.
I also discovered with my friend Google that there are worries about some issues such as condensation, and potentially water in fuel as result of that, and about the possibility of degradation of hoses and seals. I wonder to what extent in this introduction those concerns have been taken account of. Otherwise, this is a wonderful idea and I beg to support it.
Baroness Vere of Norbiton (Con)
My Lords, I am grateful to the noble Baroness, Lady Randerson, and the noble Lord, Lord Tunnicliffe, for their consideration of the statutory instrument today. I am pleased that they are both able to support it, and they had some very good questions, definitely one of which I had to go and look up after I spoke to the noble Lord, Lord Tunnicliffe, this morning; I am very pleased to have an answer but I will leave it to the end, as it is my piece de resistance.
I turn first to the questions asked by the noble Baroness, Lady Randerson, although this also applies to some of the issues the noble Lord, Lord Tunnicliffe, raised. We have had this fuel in Great Britain now since September 2021 so, if there were any significant concerns, they would have been raised. We are not aware of any. I recognise that some motoring magazines might raise certain questions, but certainly there is no evidence at the moment that there is a significant problem with the introduction. The noble Baroness asked whether we had learned anything from the introduction in Great Britain. One of the key things that we learned was to make sure that we made the introduction when the specification of the fuel changes from summer to winter, so that you get the throughput at the same time as you are trying to flush through the winter grade, in this case, into Northern Ireland. In broad terms, therefore, as regards this introduction, where there are any risks they have been mitigated or we are aware of them, and otherwise I expect a very smooth introduction.
Of course, it is true that this SI was delayed a little by the sad death of Her Majesty the Queen; that is why the communications campaign in Northern Ireland has already started. The noble Baroness spoke about classic cars and indeed classic lawnmowers. We are aware that a number of items of equipment will need to continue to use E5. E5 will remain available, and we will make sure that the communications include guidance for owners to check their manufacturer’s instructions to see whether E5 is suitable. In the vast majority of cases, they can just use E10 and then E5 if it is available. Light aircraft should also be able to continue to use E5. Again, as with the introduction in Great Britain, although we noted it and it was a potential issue, it has not turned out to be the case.
The noble Baroness mentioned EV charging points and I look forward, now that I am back in my role, to speaking with her further about them. I note that we have a new Minister for the Future of Transport, whom I was speaking to only today. I am not saying that the last Minister was slacking at all, but the new Minister has come at it with great new vigour to look through all our plans, to make sure that the funding is going to the places which need it most. We have to fund areas where there is a market failure because there is a significant private sector there that is willing to invest, and we need to make sure that we target those areas—for example, rural areas—where the value-for-money case for the private sector might not be so good, but we absolutely need to get those EV chargers there.
On the percentage of terminals that cannot blend, I can say that bat the moment there are two terminals, which represent less than 5% of total UK petrol production. I am afraid that the point about the percentage of petrol from the Republic is a step too far, but I will write if we have that information. When the Republic introduces E10 in January, that will be consistent across the island of Ireland and within the whole of the UK. There will be consistency for the vast majority of people who are driving compatible cars.
I am afraid that the noble Lord, Lord Tunnicliffe, slightly lost me with his first point about Northern Ireland and the mainland and 95 and 97. I will go back to read it again to make sure that we can respond properly and that we have fully understood his concern about the supply of 95, 97, E5 and E10. He is right to note that there is a penalty in terms of miles per gallon when using blended bioethanol. We think it supplies about 1.7% less energy. As we noted when we did the last SIs, it is probably about the same as driving with the air conditioning on or driving with slightly flat tyres. It is not a game-changing decrease in the energy supplied from the petrol. That impact was of course included in the impact assessment on whether it was a good idea to do this at all. The impact on the consumer is fairly marginal.
I turn to the costs for those who have an incompatible vehicle. As the noble Lord, Lord Tunnicliffe, mentioned, some classic cars cannot run on E10 and would need to continue to use E5, which will continue to be available. I recognise that it might be a little more expensive than the E10 prices one would hope to see. For those who are unwilling to pay for super grade petrol, there are very good second-hand alternatives on the market. Unfortunately, that will probably be the option that they have to pursue.
As for what happens if you put the wrong grade in, whether E10 or E5, if you do it infrequently it is unlikely to damage your vehicle at all. It is not like when you put diesel in your petrol car or vice versa—then you really are in trouble. Your car will be fine and you can just go back to using the right one. Should you put the wrong one in on occasion, it is not going to be too much of a problem.
Then we come to carbon calculations. When I spoke to the noble Lord, Lord Tunnicliffe, this morning, he got me thinking. Of course, he is absolutely right. I had to get my head around this. It is true that when you put bioethanol into petrol, it is combusted and it produces carbon dioxide. However, the point is that the carbon dioxide in that bioethanol is from the short-term carbon cycle. It is from the air and you could probably calculate how many months it has been gone. It is from the air, it goes into feedstuffs, it goes into the vehicle, it comes out of the tailpipe and it returns to the air again. Because it is from the short-term cycle, it is basically a case of taking it out temporarily and putting it back. Using bioethanol is stopping us using that percentage of fossil fuel-based petrol, which comes from stored carbon and is what we do not want to add to the atmosphere. That was a great learning point for me and I am grateful to the noble Lord for raising it. I am going to do a bit more digging to make sure we fully understand that. We know that this is not carbon dioxide free at the tailpipe, but it is a short-term cycle rather than the long-term release of greenhouse gases, which is absolutely what we are trying to reduce in this country. On that basis, I commend the regulations to the Committee.