Oral Answers to Questions

Andrew Bowie Excerpts

Tuesday 28th February 2023 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

4. Whether he has made a comparative assessment of the adequacy of protection against carbon leakage for energy-intensive industries under the (a) UK emissions trading scheme and (b) EU emissions trading system.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

The UK has committed to protecting our industry from carbon leakage, and like other carbon pricing systems, including the EU ETS, we currently provide free allocations to at-risk sectors. We are undertaking a review of both free allocation and carbon leakage policy.

[Sammy Wilson]

Since it was set up in 2020, the result of the UK emissions trading scheme has been that the cost of carbon allowances has consistently been much higher than in the EU and other competitive countries, partly due to the fact that the net zero policy has led to a reduction in those allowances. That has led to heavy industries such as steel, aluminium and oil refining going abroad, with a loss of jobs and strategic industries. Given the impact that this is having, will the Minister commit first to rejecting the 50% reduction in allowances planned for 2024, and secondly to reforming the cost containment mechanism to make it easier to intervene in future?

[Andrew Bowie]

I hear what the right hon. Gentleman says. We currently give sectors at risk of carbon leakage a proportion of their allowances for free, to reduce their exposure to the carbon price, with those free allowances being worth billions of pounds per year at current prices. The 2021 “Developing the UK ETS” consultation proposed to guarantee this level of free allocation until 2026, subject to activity level changes. We will consult no later than the end of 2023 on the methodology for distributing free allowances and explore ways to better target free allocations at those most at risk of carbon leakage.

[Tom Hunt (Ipswich) (Con)]

6. What steps he is taking to help businesses with their energy bills.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

The Government are supporting hydrogen projects around the country, including in the north-west, with capital support from the £240 million net zero hydrogen fund, support through the hydrogen production business model and through the cluster sequencing process. As my hon. Friend is aware, HyNet North West is included in the track 1 cluster.

[Andy Carter]

My Warrington South constituency is home to one of the largest aluminium can recycling plants in the UK. It takes used beverage cans and turns them into brand new cars. It is eager to transition its furnaces to hydrogen and is part of the HyNet carbon capture and storage programme. What Government support is available to major industrial manufacturers such as Novelis to help it to reduce its emissions?

[Andrew Bowie]

The Government have a range of policies to incentivise and support industry to invest in innovative, clean technologies, including low-carbon hydrogen. Those include the £170 million industrial decarbonisation challenge, the £350 million industrial energy transformation fund, the £26 million industrial hydrogen accelerator and the £55 million industrial fuel switching competition. If my hon. Friend were to invite me, I would be delighted to visit Warrington to see that world-leading aluminium plant as it transitions to hydrogen.

[Mr Speaker]

And they are playing rugby tomorrow night.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Are the Government taking hydrogen seriously enough in the north-west and other regions? We have built a network of hydrogen filling stations for trucks across the UK and hydrogen has enormous potential. What is the Minister doing to work with our leading universities on the development of hydrogen energy?

[Andrew Bowie]

I thank the hon. Gentleman for his question. The Government take the potential of hydrogen incredibly seriously and we are very positive about the benefits that hydrogen will bring to this country as we move towards a clean, green, renewable future. That is why we are working with BP, Equinor, Scottish Power, Octopus, RES and research institutions across the country to maximise the potential for hydrogen.

[Boris Johnson (Uxbridge and South Ruislip) (Con)]

T1. I congratulate my right hon. Friend—[Interruption.] Oh sorry, question 1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I have been hearing from Hillingdon Council and Harrow Council about their ambitious plans to improve my constituents’ access to electric vehicle charging. Does my hon. Friend agree that it should be a higher priority for the Mayor of London to improve access to environmentally friendly transport, rather than imposing a ULEZ?

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

I could not agree more. Frankly, if the Labour Mayor of London were to focus more on that, rather than imposing yet another tax on the hard-working people of outer London, he might actually not be failing this great capital and its people as much as he is, unlike the two Conservative councils that are acting positively to increase the availability of and accessibility to electric vehicle charging points across the region.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

T6. I listened carefully to what the Secretary of State said about prepayment meters. Could he confirm that forced installations will not go ahead until the penalty on prepayment meters has been abolished— yes or no?

--- Later in debate ---

[Andrew Bowie]

Yes. Representing a rural constituency myself, I understand just how important fertiliser manufacturers are. The energy bill discount scheme will start on 1 April, providing eligible businesses with a discount on high energy bills until 31 March 2024. The list of eligible sectors has been published, and I am delighted to confirm that it will include manufacturers of fertilisers and nitrogen compounds.

[Mohammad Yasin (Bedford) (Lab)]

T9.   Last summer, I attended the opening of Infarm, a vertical farm facility in Bedford, focusing on locally grown food to help us to improve our domestic food security and to reduce our carbon footprint. Within six months, the company announced that it was closing, citing energy prices, supply chains and the rising cost of materials. Given the empty shelves in our supermarkets, what action is the Secretary of State taking to ensure that businesses that are trying to ensure our food security can operate?

[Andrew Bowie]

I am afraid the hon. Gentleman has not been listening to what we have been saying for the past hour. We are determined to ensure that we move towards net zero in a sensible and measured way, leading the world as we do so while ensuring food security across the country.

[Selaine Saxby (North Devon) (Con)]

Contracts for difference have been successful in driving down the cost of renewable energies. However, industry bodies and developers are warning that the draft strike prices for allocation round 5 are too low. Can my right hon. Friend commit to a review of strike prices to ensure that the allocation round is a success for renewable energy technologies such as floating offshore wind?

--- Later in debate ---

[Martin Vickers (Cleethorpes) (Con)]

Knauf, a major manufacturer based in Immingham, seeks to build a hydrogen-ready combined heat and power plant to reduce its emissions. The project may stall, however, because Northern Powergrid has told Knauf that it cannot provide a connection until 2031. Could the Minister intervene and try to overcome the problem?

[Andrew Bowie]

Yes, I would be happy to intervene. I am very happy to meet my hon. Friend and the company concerned to see what we can do to resolve the issue.

[Alison Thewliss (Glasgow Central) (SNP)]

As the proud host venue of COP26, the Scottish Event Campus in my constituency well understands the challenges of reaching net zero, but like many businesses in the events sector, it is facing astronomical energy bills. Would a Minister be willing to meet the Scottish Event Campus to discuss those bills and its ambitious plans for reaching net zero through investment in the campus?

[Andrew Bowie]

I would be absolutely delighted to meet the hon. Lady and the Scottish Event Campus. We are doing everything we can to support businesses that are struggling with energy bills at the moment. It is just a shame that, as a result of the Scottish Government cutting local authority budgets north of the border, Glasgow City Council will not be able to do as much as it would like to support the Scottish Event Campus as we move forward.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

Leisure centres such as Kidsgrove Sports Centre, and particularly those that have swimming pools, are feeling very nervous about the end of the energy support that they are receiving today. What discussions has the Secretary of State had with the Treasury to ensure that support continues so we do not lose these community assets?