British Bioethanol Industry

Anna Turley Excerpts

Wednesday 16th January 2019 Westminster Hall

[Anna Turley (Redcar) (Lab/Co-op)]

It is an honour to serve under your chairmanship, Mr Gapes. I thank my hon. Friend the Member for Scunthorpe (Nic Dakin) not only for securing this important debate, but for all his work over many years in championing the bioethanol industry in a cross-party manner.

My constituency of Redcar is home to the Ensus bioethanol refinery, which produces fuel-grade alcohol, animal feed, and carbon dioxide for the beer and fizzy drinks industry. In November, production was paused at the facility for the fourth time since 2011 owing to difficult market conditions. I stand here today to speak up for the employees of Ensus whose jobs now hang in the balance, unsure whether the pause is another temporary blip or a death knell for their industry. One hundred Ensus workers are waiting to hear whether they have a future in an industry that has a huge role to play in this country’s transition to a greener, more sustainable economy. The plant also supports around 2,000 jobs in the supply chain across the north of England, so many people are worried about what the future holds. I sincerely hope the Minister will be able to give them some reassurance.

The Government play an important role in shaping the direction of travel for growth industries as part of the industrial strategies that we hear so much about, but it is clear that the present difficulties that the sites face have come about because Whitehall has said one thing, but done another. It has been especially equivocal in supporting the greater use of bioethanol in fuels, which is the cause of many of the industry’s problems today. The dithering must stop and this next-generation industry must be supported to be the British—indeed, the Teesside—success story that it has the potential to be.

More than 10 years ago, the Government introduced targets to increase renewables, sending a signal to the bioethanol industry that it was time to invest in the capacity needed to deliver on those targets. Since then, more than £1 billion has been invested in state-of-the-art facilities by bioethanol companies. In 2015, when the Department for Transport’s taskforce recommended increasing fuel blend levels to 10%, a further signal was sent to the industry that the Government were fully behind the industry and many in the sector prepared for the future. However, more than three years later, the consultation has only just concluded and we are no further forward. Now the UK’s two largest plants, Ensus in my constituency and Vivergo in Hull—I pay tribute to my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), whose excellent speech was full of passion and a commitment to fight for her constituents’ jobs—have announced they will either close or pause production, demonstrating how fragile the situation is. Jobs in the bioethanol industry and the closely connected agricultural sector hang in the balance. Under this Government, my constituency has already been forced to handle many industrial job losses—more than 3,000 when our steelworks closed—and I do not want to see another industry close its doors for good.

Some of the questions that we need to hear the Minister answer today—I remind her that employees are watching and listening closely—include how she plans to reverse the industry’s decline in 2019 and give it the support it needs. Will she commit to giving British bioethanol a future, or will the UK source it from abroad when domestic capacity is lost? As we have already heard today, there are wider implications for other renewable energy producers. Why would investors trust the Government’s word and put hundreds of millions of pounds into projects that we desperately need in this country, when, given the experience of the bioethanol project, they might later prove out of fashion with this Government? Certainty and stability is vital for business, and the sector is clear that that has to mean making E10 mandatory for fuel suppliers. Anything less will not provide sufficient confidence that the demand for E10 is there, and the facilities will close for good.

As my hon. Friend the Member for Sedgefield (Phil Wilson) mentioned, there is a concern for the agricultural sector, too, which produces the feed wheat for the industry and consumes the high protein animal feed co-produced by it. The two industries work hand in hand, serving as a stable and reliable co-dependent supply chain. We are not talking about backing E10 for the sake of the producers. We know there is a strong environmental case for introducing E10, reducing carbon emissions equivalent to the removal of 700,000 cars from Britain’s roads, and improving air quality by lowering carcinogens, particulate matter, hydrocarbons, and oxides of nitrogen. Given that transport is now the UK’s most polluting sector, accounting for 28% of the UK’s greenhouse gas emissions, we will not meet our climate change targets without getting to grips with the problem.

Since 2016, E10 has been the optimal reference fuel for all new cars, meaning some 3 million new vehicles are now ready to use it, and more than 95% of cars—those built since 2000—are warrantied for the use of E10, so there can be no concerns that our nation’s vehicles cannot cope with this blend.

This debate is extremely important today because we need the Government to recognise how vulnerable this British industry is, and we need urgent action on E10. I wrote to the Transport Secretary in October to ask for greater urgency in supporting E10. I have also asked many questions in Parliament, as have other colleagues here today, yet here we are with another consultation while jobs in the industry look more vulnerable by the day. Ensus employees in my constituency and people working across the industry and in the supply chain are waiting for reassurance that urgent action from the Government will be forthcoming. I hope to hear that from the Minister today.

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[Ms Ghani]

Indeed, and I apologise if I have given any other interpretation. Without wanting to give a promise, we see this sector as very important to what we are trying to achieve.

[Anna Turley]

I am deeply frustrated that the consultation closed such a substantially long time ago. Can the Minister identify the barriers in the civil service and the ministerial process to getting a decision? In the light of today’s debate, was there not some kind of briefing, impetus or a rocket put under this urgent issue? Will the Minister confirm that, following this debate, a rocket is under it?

[Ms Ghani]

The Teesside massive, as I will call them, have no doubt put this issue back firmly on the Minister’s agenda, although no doubt it was already there. We always want to ensure that any consultation we undertake provides a good response to all involved—not just the sector providing the fuel but those putting the infrastructure in place and owners of classic or older cars.

There was mention of the impact on international roll-out. I was reflecting that the roll-outs in Europe have been quite mixed: in some places, they have done well and in others they have not fared as well as one might have assumed. We have to ensure that we get this right. I am hearing, and no doubt the Department is too, frustration at getting a response. That is why a meeting was agreed.

[Ms Ghani]

When Government make rash decisions that are not fully thought through, when a sector is involved, that further undermines trust in Government. That is why it is our responsibility to ensure that we get the right decision. Unfortunately, on occasion, that can take time. The hon. Lady’s frustration has no doubt been noted. It is absolutely right that if and when we roll out E10, we do so in a successful way, not least for EU bioethanol suppliers.

Given the barriers to introduction, it is right that we have taken time to learn from the experiences, good and bad, of the roll-out of E10 in other countries. If a decision were taken to mandate E10 further to last year’s call for evidence, we would also need to test the costs and benefits against firm proposals, ensuring that all those with an interest, including fuel retailers and motorists in particular, have an opportunity to submit evidence. If E10 is rolled out in future, the Government remain committed to ensuring that E5 remains available and that any introduction of E10 is well managed, with information on compatibility made available to vehicle owners.

[Anna Turley]

I appreciate the Minister giving way—she is being extremely generous with her time. I want to pick up the point about costs. We know that the cost of ethanol is lower than oil; unfortunately, bioethanol is currently more highly taxed than petrol, which makes E10 fuels about 1p more expensive—about £20 per year for the average motorist. Tax incentives are extremely important to incentivise behaviour. Are the Government looking at tax incentives to encourage the roll-out?

[Ms Ghani]

The Government will be looking at all issues to ensure that, if a roll-out is suggested, it is an option favourable to those pulling into petrol stations. That is why it is interesting to learn what has happened in Europe. In France, I believe, the roll-out was more underwhelming than had been expected and in Germany it did not deliver the impacts that had been hoped, so it is important that we look at this closely.

--- Later in debate ---

[Ms Ghani]

I believe that the door has already been bashed down, because a meeting is set in the diary.

[Anna Turley]

With the Teesside massive?