Energy: Biofuels

Earl Attlee Excerpts

Monday 8th October 2012 Lords Chamber

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what assessment they have made of the impact of the ending of the duty exemption for biofuels and the implementation of the renewable transport fuel obligation on companies in the United Kingdom that manufacture biofuels from recycled food waste.

[Earl Attlee]

My Lords, the Government strongly believe that the renewable transport fuel obligation—the RTFO—delivers effective and sustainable market-based support to the biofuels industry. The RTFO provides additional support to biofuels made from waste by awarding two renewable transport fuel certificates—RTFCs—for each litre of fuel supplied. The Department for Transport has committed to a review of the double-certificate scheme and support provided under the RTFO in 2013.

[Lord Kennedy of Southwark]

I would like to draw the noble Earl’s attention to the SME producers who recycle local food waste into biodiesel which has a remarkably low-carbon footprint. These companies have had to cope, in effect, with a 20p per litre reduction in their income because of the current value of certificates. It is clearly a difficult issue for these smaller companies, some of which have actually gone out of business. Will the noble Earl agree to facilitate a meeting between me, representatives of SME producers and the relevant Minister?

[Earl Attlee]

My Lords, I am well aware of the difficulties being experienced by these SMEs with their commendable work in producing biofuels. I would of course be delighted to invite the noble Lord, and any other noble Lord who would like to come along, to a meeting with the Minister and officials—the experts who understand these quite complex issues.

[Lord Bradshaw]

Let us bear in mind that the people who recycle the food waste to which the noble Lord opposite referred are almost all very small businesses. They are not large corporations. They go round and collect fish-and-chip oil and similar things from shops, and of course they are doing a service in that this stuff is not going to landfill. Will the Minister refocus, please, on the plight of small businesses that are being very adversely affected? The RTFO certificates to which he referred are not compensating for the reduction from the previous scheme.

[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.

[Lord Teverson]

My Lords, making transport fuels sustainable has to be a key aim of a low-carbon economy as they account, I think, for a quarter of all carbon emissions. What research are the Government doing to make sure that we develop sustainable biofuels for the future? It is such an important area for a sustainable economy for the future.

[Earl Attlee]

My Lords, I do not know what research has been commissioned but I would like to inform the House of one of the difficulties with biofuels, which is some of the complex effects of indirect land use change. For instance, if you start using tallow as a biofuel then the use of certain types of tallow could increase the demand for palm oil, which could have effects on land use change far away from the United Kingdom. It is a complicated area. There is research into understanding this, but I am not sure what research the Government are directly commissioning.

[Lord Davies of Oldham]

My Lords, will the Government consider doing what several other European Governments are doing and separate bioethanol and biodiesel in the RTF obligation, thereby offering the possibility of avoiding exactly the problem he identified regarding what might suit large traders and significant commerce as well as the small businesses providing this very important service at a more local level?

[Earl Attlee]

My Lords, the danger, which we are drifting into, is providing state support for small businesses. We must provide the regime with the incentive from the renewable transport fuel obligation, but we must be careful not to provide state aid to certain types of businesses.