Renewable Transport Fuel Obligations (Amendment) Order 2011

Debate between Lord Davies of Oldham and Lord Grantchester

Monday 5th December 2011 Grand Committee

[Lord Grantchester]

I recognise the importance of this order for transport and meeting our climate change obligations. Its sustainability provisions are entirely to be welcomed. However, the lengthening of the timescale from 2011 to 2014 is a further example of the Government dissipating the momentum of the last Labour Government. This is impacting further on the confidence of the investor market, as has been identified across the renewable industry in its relationship with this Government.

I have one specific query. I understand that elements of the sustainability criteria are currently being consulted on. The consultation is set to end on 15 December, the date the order becomes operable. I understand that the UK Petroleum Industry Association has lobbied on the penalty of 30p a litre for non-compliance, stating that there is not sufficient time for its supply chains to meet the standards. The association asks that any fines should not apply before 1 April 2012, to allow supply chain purchases and contracts to catch up with the certification process for the biofuel products. The UKPIA states that it does not know whether biofuel products already contracted will meet the certification process and standards. This seems an understandable request. Can the Minister clarify his department’s position?

[Lord Davies of Oldham]

My Lords, this has been a fascinating debate. The Minister has quite enough on his plate in terms of issues to tackle without me adding a great deal to his burden. I have some sympathy for him; he is well aware of the fact that the Merits Committee of the House expressed some criticism of the amendment order. Clearly there is also, among those in the affected industries who are directly interested in the issues, a belief that a considerable amount of backsliding by the Government is going on. This is a pretty modest measure against the background of the Chancellor's denial of environmental issues last week, and the clear indication that the Government are going to soft-pedal on planning issues, reduce subsidies to the solar panel industry and offer subsidies to some of the most polluting industries. The measure must be seen in that context. Therefore, I will give an element of reassurance to the Minister; we on this side support the measure, inadequate though it is. We hope that it will be the basis on which in due course something more constructive can be developed.

The Minister must know about the concerns of the industry. The issues raised by the order around verification and reporting are complex, and there is a danger that if people get it wrong and biofuels prove not to conform to the requirements, the industry will get into further trouble. However, we should look at how little notice the industry has from the period of consultation to the implementation of the order, which is only a week and a half from being part of the requirements.

The industry also indicated that there are areas to which it seems no consideration at all has been given. For example, the development of hydrogen fuel with regard to motor transport is not considered in relation to the order. From what we can see, the Minister's general perspective is that the Government will keep the issues under review. That is a long way off definitive policy, which is what the order is meant to represent. The industry deserves better from the Government. As the noble Lord, Lord Bradshaw, indicated with regard to the production of biodiesel, it is important that people know the parameters within which they will work. How can we expect them to invest, particularly in these very difficult times, against a very uncertain perspective?

I heard what the noble Lord, Lord Reay, said and I hope that the Minister will give some response. When 97 per cent of the world's scientists who are interested in this area regard climate change as moving apace and as a threat to the world, the concept of deindustrialisation may be emotive but we certainly have to change. Without change, we will face a catastrophic future.