Energy: Biofuels

Lord Palmer Excerpts

Wednesday 27th March 2013 Lords Chamber

[Earl Attlee]

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 Palmer]

My Lords, does the noble Earl not agree that this exciting new biofuels industry is greatly hampered by the fact that four different government departments are involved in it? I declare an interest as the president of the British Association of Biofuels and Oils.

[Earl Attlee]

My Lords, I accept that several government departments are involved; however, officials do talk to each other. The Secretary of State, Ed Davey, was representing the UK in Europe, trying to find a solution to the ILUC problems.

Renewable Transport Fuel Obligation

Lord Palmer Excerpts

Thursday 13th December 2012 Lords Chamber

[Earl Attlee]

My Lords, one of the concerns I have identified in private conversations with the noble Lord is the possibility of distorting the market in UCO and biodiesel by importations of ethanol. I will happily raise that with my right honourable friend the Secretary of State.

[Lord Palmer]

My Lords, as one of the instigators of the RTFO, is it not a scandal that our commitment is met by only 11% from home-produced fuel in this country? I must declare an interest as president of the transport division of the Renewable Energy Association.

[Earl Attlee]

My Lords, I understand the point that the noble Lord is making but we are bound by the WTO trade rules and EU state aid rules.

Energy: Biofuels

Lord Palmer Excerpts

Monday 8th October 2012 Lords Chamber

[Earl Attlee]

My Lords, although I agree with my noble friend’s analysis, he needs to understand that these fuels are also traded internationally in large quantities.

[Lord Palmer]

My Lords, does the noble Earl agree that, in reality, the RTFO is in a complete shambles, most especially because it is answerable to four different government departments? I ought perhaps to declare an interest: along with the late Lord Carter and others, I was responsible for persuading the previous Labour Government to implement the RTFO.

[Earl Attlee]

My Lords, several government departments may be involved but my honourable friend Mr Norman Baker is in charge of the policy. It is complicated, but I believe that it is a good and efficient policy that provides biofuels in a most efficient way.

Renewable Transport Fuel Obligations (Amendment) Order 2011

Lord Palmer Excerpts

Tuesday 6th December 2011 Lords Chamber

[Lord Bradshaw]

My Lords, before the Motion is put to the House, I should like to draw to the attention of the House the fact that the report of the Merits Committee on this order was published last Thursday. Nine noble Lords then debated the order yesterday in the Moses Room so we all expected that some notice would be taken. This morning the order appeared on the Order Paper and so there has been no opportunity to consider what was said in the Moses Room. This does not reflect well on the House or show that the Government really value the opinions of Peers before they place matters on the Order Paper.

[Lord Palmer]

My Lords, I should like to echo the words of the noble Lord, Lord Bradshaw. Surely it must be an insult to those of us who spent 90 minutes yesterday in the Moses Room in that the noble Earl agreed to come back to several of us on many major points at issue on this extremely complex subject. Now, less than 24 hours later, we are being asked on the Floor of the House to agree to the order.

[Lord Davies of Oldham]

My Lords, the Minister had a difficult time with this order yesterday, not least because, as the noble Lord, Lord Bradshaw, indicated, the Merits Committee took a rather dim view of its inadequacies. Her Majesty’s Opposition think that this order should go through because of the real urgency of the position for the industry. But what I sought to point out yesterday, and what other noble Lords pointed out more forcefully than I did, were the inadequacies of the instrument. I am certainly of the view that we should let it go through today but I hope that the Minister will take on board the fact that the criticisms yesterday were serious ones and that we expected the Government to have taken a more definitive position on the issue so as to reassure the industry in circumstances where underinvestment in this very important sector is occurring because of a complete lack of confidence in government policy. The Minister should therefore not be surprised that he is being pressed further today, as indeed he was yesterday.

Renewable Transport Fuel Obligations (Amendment) Order 2011

Lord Palmer Excerpts

Monday 5th December 2011 Grand Committee

This may be a piece of secondary legislation, but it is of the utmost importance. It is very difficult to see how we will meet our targets in this area; I welcome the fact that we have this order before us, but we have real challenges.

[Lord Palmer]

My Lords, I thank the noble Earl very much for his, dare I say, easy-to-understand introduction of this order. This subject is becoming more and more complicated, and when the original band of four—the late Lord Carter, the noble Lord, Lord Ezra, the noble Lord, Lord MacGregor, and myself—persuaded the Government to accept the original RTFO, little did we think that the waters would become so muddied, and the UK biodiesel industry would be in such limbo.

This is such a complex subject, covering three different government departments and, of course, not to be forgotten, the Treasury. The noble Lord, Lord Teverson, made the point about used cooking oil, so I shall not repeat that by saying what I intended to say. But it must not be forgotten that investment in manufacturing for UK biofuels has been well over £500 million in the past five years. I declare an interest as a grower of industrial oilseed rape, albeit that my wife is a fossil-fuel explorator.

Investors are ready and waiting to invest a further £200 million at least in the next year, and more thereafter, if they can get clarity on the pathway to reach the renewable energy directive target of 10 per cent by 2020. This is private sector money, and the industry does not, and will not, rely on government subsidies. It must not be forgotten that UK biofuels are among the most sustainable in the world and provide a vast array of jobs for United Kingdom citizens, most especially in the deprived area of the north-east of England.

The lack of clarity in policy—in particular, a dead stop in the UK’s renewable transport targets at 5 per cent by April 2014—is sending a negative signal to investors and I strongly believe that we must get a commitment beyond 2014. We know that we can supply up to 80 per cent of the 10 per cent target and it is incredibly important that these are all from home-made biofuels that are sustainable. I hope the noble Earl will take this on board. If we turn investors away, we will condemn the UK road transport sector to be the greatest carbon emitter in the country for the next 20 years. Is this really what we want? I urge the Government most strongly to confirm the 10 per cent target and the pathway to reach it before investors disappear completely and the RTFO is in utter shreds.

[Baroness Worthington]

My Lords, it is a great pleasure to speak on this subject. I also want to make a general comment about how this order was introduced. I worked for Friends of the Earth when the original Bill was being promoted in the House of Lords, and the reason that Friends of the Earth supported this Bill then was because we could see that the overriding priority was climate change and that we needed to seek renewable energy use in all forms of energy, not just electricity but heat and transport. So this was an important part of a suite of measures to address climate change.

In general, the order put forward today is very welcome. It is necessary to have sustainability criteria. I echo the noble Lord’s comments that when we started out on this track no one could anticipate the degree of complexity that would come from this order, but measures are being taken to address problems as they arise. One way to address problems more easily could be by focusing more on indigenous use, growth and production of renewable fuels in the UK, where we can control the sustainability far more clearly. I would like to see more from the Government about how we can promote UK-grown biofuels.

The great weakness in the order at the moment is, as has been mentioned, the cliff face where we have no trajectory beyond 2014. It was interesting to note that the noble Earl seemed to be presenting it as something to be proud of that we have not committed to a trajectory. That is questionable and really damages investor confidence. The obligation is phrased as a percentage of overall fossil fuels sold. This means that not only do we have no growth in the percentage but we could have a declining volume of fuels being provided from this order because vehicles are getting more efficient and we are seeing a reduction in overall fuel use in this sector, especially as we move towards electrification of vehicles.

The Government’s own modelling should show declining use of fossil fuels, which therefore means that the percentage in this order is also declining. We are not even standing still. This is a really serious issue and I would like the noble Earl to address this when he responds. All the reasons given for not committing to a trajectory are to do with the volume of fuels expected because of concerns about sustainability impacts. However, because it is a percentage, you could have the same volume but just growing in percentage terms. That does not really work and we need to see more clarity on why there is no trajectory and the damaging effect that this has on the investment community and UK business. I really want to see something from the Government to put these fears to rest at a time when we should be seeking to encourage all investment into renewable and sustainable forms of energy.

[Viscount Eccles]

My Lords, this is a very difficult subject, as the noble Lord, Lord Palmer, said. It is of interest that the department has not produced its statistics up to April 2011—although we are in December. I also have a perception that the department has come to this instrument with a certain amount of reluctance—I do not think it likes it very much. The reason why it does not like it is absolutely understandable. The information upon which the order is based is very sketchy indeed. I used to be on the Merits Committee, and I probably spoke on another order on this subject some time ago. When I was on the Merits Committee I do not remember there being five impact assessments—all done during the summer holidays, I notice. That must be close to a record.

Before getting on to the instrument itself I wanted to make two points. The first one is about a holistic approach. It does not make sense, in the context of climate change, to talk only about fuel, and not about fuel consumption or about emission control coming out of modern cars. There needs to be a much more rounded approach. The European instruments which have been put into place, no doubt agreed by ourselves in a Council of Ministers, are not at all fit for purpose. In fact, I am pretty sure that they are completely unfit for purpose. There needs to be a much more radical look at how we look at the whole picture.

My second point follows up what the noble Lord, Lord Palmer, said about UK production. I think I am right in saying that at the moment, of the biofuels that we use in this country, 90 per cent is imported and only 10 per cent is produced in the United Kingdom. Those are the Department for Transport’s own statistics. The great majority of that is produced from tallow and waste cooking oil. On Teesside—I come from the north-east and reject the description of it being “deprived”, which is not right—there is a quarter of a million tonne plant—

[Lord Palmer]

I am sorry; I did not mean that in any derogatory way. I know that unemployment in the north-east is a good deal higher than in other parts of the country, which is why I was urging for more investment in the north-east. I hope the noble Viscount does not take my comments in any derogatory way, because they were not intended as such.

[Viscount Eccles]

I thank the noble Lord for that, but there are some people in the north-east who are very good at making the most of the difficulties that we have in the economy. It does not do us any good to overplay our hand.

There is a very large plant, which I know. It was engineered in large part by somebody with whom I used to work, and it is extremely well engineered. The company that was going to operate it went out of business. It is now owned, and, to a certain extent—I do not know quite how much—operated by Harvest, which is one of the suppliers of biofuels. It was designed to process rapeseed oil. My information is that it is not processing any rapeseed at all. I really question the whole future of the United Kingdom’s own production from the standard feedstock in temperate climates, which is rapeseed. I do not know what the position is.

It is notable that in the instrument and the impact assessments there is hardly a mention of rapeseed, and no references are made to United Kingdom production from rapeseed. Of course, rapeseed is a food; you can buy rapeseed oil in any supermarket, and it is very good for cooking. However, so is soya bean. The three principle feedstocks for biofuels—two for diesel—are soya bean, palm oil, and of course, rapeseed.

The soya bean is responsible for 50 per cent of the world’s supplies of vegetable oil. How will you determine whether a particular lot of soya comes from a sustainable source? I should declare a past interest: an organisation I was involved with used to grow soya beans in Zambia. We grew about 40 per cent of Zambia’s vegetable oil supplies in that area of the country—it was a very big operation. I have also been a palm oil grower. As for bioethanol, I have also been a sugar cane grower. I could volunteer to be a verifier; I would know what I was looking at. I have seen all sorts of land transferred, for example, from growing coconut trees to oil palms—but what was the land before coconuts were grown on it? My goodness, it was forest until somebody thought, “We need some food”. So they cleared the land and grew coconuts. Then the coconut industry became unremunerative and the coconut trees were replaced by oil palms.

--- Later in debate ---

[Earl Attlee]

My Lords, I will write in detail to the noble Lord on the issue of used cooking oil and see if I can draft a letter that will meet his concerns. At the moment I am convinced that this is a sensible policy.

[Lord Palmer]

My Lords, the point made by the noble Lord, Lord Bradshaw, emphasises what a complex issue this is, because it goes back to the Treasury. When the noble Earl writes to the noble Lord, Lord Bradshaw, perhaps he could kindly copy us all in so we can be kept abreast of the situation.

[Earl Attlee]

My Lords, it is standard procedure to write to all noble Lords who have taken part in any of these debates.

The noble Lord, Lord Reay, asked me several interesting questions. First, he asked if there were any suggestions that adding biofuel to fossil fuel reduces fuel efficiency. Yes, biofuel is less energy-dense but we are blending only low volumes. He asked about the proportion of biofuels supplied today under the RTFO that comes from crops. The latest published figures indicate that two-thirds comes from crops. He also asked about the cost to the motorist to date, which has been between £300 million and £400 million per year at current market prices. He asked whether, after consulting on a number of options, we are keeping the buyout mechanism. The answer is yes. For those who are unfamiliar with the system, the buyout mechanism is in place to provide a safety valve that will protect both industry and the consumer from spikes in the cost of supplying biofuel. It will allow obligated suppliers to buy up part or all of their obligation, rather than meeting it by redeeming the RTFCs that are issued to those supplying sustainable biofuels. The cost of buying out is 30p per litre of fuel that the supplier would otherwise have been obligated to supply.

The noble Lord also asked about the efficiency and effectiveness of biofuels, and whether there were any problems. He will recall that I recently answered an Oral Question in the Chamber about ethanol and petrol, which can cause some problems. However, they are not insurmountable.

The noble Lord, Lord Grantchester, asked me what I would say in response to industry concerns that there has been inadequate time to prepare for this and that consultation on the RTFO guidance has been very brief. We have no intention of delaying transposition and implementation. The renewable energy directive was published in 2009 and set mandatory sustainability criteria for biofuels. The implementation of the criteria should not come as a surprise to industry. Those companies that have taken the opportunity to report on a voluntary basis and to establish a sustainable biofuel supply chain will be well placed to meet the requirements of an amended RTFO.

Biodiesel

Lord Palmer Excerpts

Tuesday 18th October 2011 Lords Chamber

Asked By

[Lord Palmer]

To ask Her Majesty’s Government how they plan to support the use in the United Kingdom of sustainable biodiesel produced from waste products, such as used cooking oil, beyond April 2012.

[Lord Palmer]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in so doing, declare that I am the unpaid president of the transport division of the Renewable Energy Association.

[Earl Attlee]

My Lords, in a recent consultation on the renewable energy directive, we proposed amendments to the renewable transport fuels obligation. These proposals included providing twice the financial support to waste-derived biofuels as will be provided to conventional biofuels through the award of two renewable transport certificates per litre of waste-derived fuel. Crop-derived biofuels will continue to receive one certificate per litre and biofuels that do not meet the required sustainability standards will receive no support.

[Lord Palmer]

My Lords, I thank the noble Earl for that lengthy reply. This is a very complex issue. I know for a fact that if the 20p per litre rebate is abolished, an enormous number of current users will revert to fossil fuels. Is this what the Government really want?

[Earl Attlee]

My Lords, Treasury Ministers confirmed at the 2011 Budget that the duty differential for biodiesel produced from used cooking oil will end on 31 March 2012, as was always intended. It is appropriate that support for waste-derived biofuels in transport will be provided through double rewards as part of the renewable transport fuels obligation. That, of course, has a sharper sustainability focus. By providing two renewable transport certificates per litre of waste-derived fuel, the UK is moving away from the guaranteed return of 20p provided by the duty differential for biodiesel produced from used cooking oil and moving towards an environment where the competitive market decides the price that will be awarded for each renewable transport fuel certificate. But each RTFC will still be worth around 20p.

Airports: Heathrow

Lord Palmer Excerpts

Monday 12th September 2011 Lords Chamber

[Earl Attlee]

My Lords, we welcome all these suggestions. The mayor’s input and suggestions will be considered alongside the many other contributions to the debate about our future airport aviation policy.

[Lord Palmer]

My Lords, could the noble Earl try to persuade his colleagues in the Treasury to look again at this terrible problem of air passenger duty, which is one of the reasons that Heathrow has lost its premier slot in the world?

[Earl Attlee]

My Lords, the noble Lord will know that air passenger duty is under review. However, it is a matter for the Treasury, as well as the Department for Transport. We are giving it careful consideration and will make an announcement in due course.

Sustainable Local Transport

Lord Palmer Excerpts

Wednesday 19th January 2011 Lords Chamber

[Earl Attlee]

My noble friend makes an extremely important point. I confess that, like him, I have not yet read the White Paper in full. Whether I will ever read every page is doubtful. Local authorities will bid directly to the Department for Transport, but we have devised a system which is as simple as possible. There will initially be two tranches, and guidance about the application process is in the Printed Paper Office and online.

[Lord Palmer]

My Lords, I very much look forward to reading the White Paper. I am a resident of Scotland, and I have a particular worry relating to my part of Scotland, which I know does not come under the noble Earl’s jurisdiction. In northern England, a number of local authority-funded coaches travelling from X to Y and A to B are nearly always empty. I hope that the White Paper will look at this most carefully to make certain that we have a really good public transport system which will actually have people travelling on these buses.

[Earl Attlee]

My Lords, the noble Lord makes an interesting and important point. I have started to use a bus service from Alton to Bordon in Hampshire, and it always surprises me how very few people are in the bus, despite it being quite large. However, part of the policy is to allow more suitable vehicles to be used by a variety of schemes.

Severe Winter Weather

Lord Palmer Excerpts

Monday 20th December 2010 Lords Chamber

[Earl Attlee]

My noble friend raised the interesting point of winter tyres. They are effective, but it is a personal choice and it would be peculiar for the Government to take any steps to mandate them. Suppliers of essential services in remote rural areas might want to consider stocking some vehicles with winter tyres, but it is entirely a matter for them. I suspect the capital cost of winter tyres rarely justifies the investment.

[Lord Palmer]

My Lords, will the noble Earl ask his ministerial colleagues to look very carefully at the question of winter fuel payments, particularly for the disabled and the elderly? What they are getting at the moment is pretty minimal, bearing in mind the incredibly low temperatures.

[Earl Attlee]

My Lords, I am sure that my ministerial colleagues are carefully considering whether the payments are at the right level, but it is not a matter for me to comment on.

Roads: Cyclists

Lord Palmer Excerpts

Wednesday 13th October 2010 Lords Chamber

Asked by

[Lord Palmer]

To ask Her Majesty’s Government what steps they are taking to ensure that cyclists abide by the Highway Code.

[Earl Attlee]

My Lords, the Government support a combination of information, education, training and enforcement to ensure that cyclists abide by the Highway Code. The enforcement of cycling offences is a matter for individual chief officers of police. The hazards caused by cyclists who break road traffic laws are recognised by chief officers and action is taken where offences are detected. The Government support action taken by the police to deter and reduce the number of cycling offences.

[Lord Palmer]

My Lords, I thank the noble Earl for that slightly unexciting reply, but does he not agree that it is a scandal how remarkably few prosecutions are made against cyclists who do not adhere to the Highway Code—most especially driving on pavements?

[Earl Attlee]

My Lords, I entirely agree with the noble Lord. I know that all noble Lords are extremely concerned about that type of offending. It adversely affects noble Lords, because they tend to be a little bit older than the average member of the population.