Bioeconomy: S&T Committee Report

Earl of Selborne Excerpts

Wednesday 10th December 2014 Grand Committee

[The Earl of Selborne (Con)]

My Lords, I thank the noble Lord, Lord Krebs, most warmly for not just introducing this debate so comprehensively but for chairing the inquiry and the Science and Technology Committee from 2010 until earlier this year. In that time, the committee has produced no fewer than 12 reports. This is the penultimate report. All who served with him on the committee are enormously grateful to him for his calm, wise and very well informed leadership. May his successor be half as successful. I also thank our clerk, Chris Clarke, and our specialist adviser, Ian Shott. We were very well served.

I repeat the fundamental question that we posed: is there a case for developing an industry in the United Kingdom which derives high-value products from carbon-containing wastes? If there is an economic and technological opportunity in this case, should the Government have a role or could this new industry be expected to develop through market forces? If the Government have a role, how will they enable the market to work more effectively? After all, the reason for government involvement would presumably be because of market failure.

As we have heard from the noble Lord, Lord Krebs, the technology opportunities are clear. This is a new technology. There are only a few examples around the world of it being operated on a large commercial scale, although there are plenty of pilot schemes. As the noble Lord said, it is not just a gleam in scientists’ eyes: it is a fact. The greatest opportunities lie in industrial and commercial waste simply because you are dealing with larger quantities of a homogenous nature. The processing of fuels, flavourings, pharmaceuticals and plastics from these waste streams is seen not just as an opportunity but, indeed, is already in production.

Domestic and municipal waste is more varied and fragmented and there is less of it. Even though the data in this area are rather poor, we know that domestic waste comprises very much the minority of waste. Nevertheless, if properly organised, it could contribute to these high-value products, and that should be the aim. The reason this new opportunity should be grasped is obvious: it would offer new jobs, often in rural areas, would make an important contribution to the United Kingdom and there would be environmental benefits. Most of these processes, probably all, would lead to reduced greenhouse gas emissions, although that would always have to be tested process by process. Reusing waste products by definition reduces our demand for natural resources which have not already been exploited.

So the answer to the first question is that there is, indeed, an economic and technological opportunity and we should exploit it. The second question is: do the Government have a role? The Government are already setting the waste agenda by transposing into domestic law the waste framework directive and the landfill directive, and they fund the Waste and Resources Action Programme, which has responsibility for delivering the United Kingdom Government’s policies on waste and resource efficiency.

As we have heard, the waste framework directive sets out the requirement to manage waste in accordance with the waste hierarchy. This is one of the holy cows of the environment movement. However, like many holy cows, it needs to be challenged from time to time. As regards waste prevention, reuse, recycling, other types of recovery and, finally, disposal or landfill, there is no explicit incentive or requirement to promote higher value uses of waste. I think that such a measure needs to be put into the waste hierarchy.

The Government’s reaction to this waste hierarchy tends to be sector-focused and to support particular technologies. Particularly in Defra, which is obviously looking at rural and agricultural waste and the like, anaerobic digestion in some ways meets the SME requirements for energy production. However, there is very little opportunity to derive high-value products from anaerobic digestion. Indeed, as we have seen in Germany—the noble Lord, Lord Krebs, referred to this—there is a risk that eventually, as you try to scale up in order to make sure that your anaerobic digestion plant is fully serviced, you start growing maize and other crops in place of food. That is clearly a conflict which is not necessarily desirable. The sectoral approach that we seem to have in this country at the moment, driven very clearly by the waste hierarchy, misses the overall opportunity to contribute to the national economy to the greatest advantage.

The Royal Society of Chemistry, as quoted in paragraph 64 of our report, referred to the review of waste policy which took place a year or two ago:

“Much of the Waste Policy review focuses on waste management practices, rather than treating waste as a resource … Existing policy dealing with waste recovery is largely focused on energy generation, rather than creation of higher-value products”.

That is precisely the conclusion that we also came to and puts it quite well. The Government need to lead the way in refocusing national waste priorities, and there is a need to develop a new waste strategy which recognises waste as a feedstock for high-value products.

Then there is the further question of whether industry could be expected to develop this strategy itself and why it should have to look to government for assistance. The Chartered Institution of Wastes Management is the trade association or body for the waste industry. Its written evidence referred to the paucity of data on commercial and industrial wastes. It wrote that,

“we are sailing steadily towards a market failure to recover resources or value from up to 15 million tonnes per year of wastes from businesses in the UK and Ireland. Failure to secure adequate … commercial and industrial … infrastructure will lock us into either continued landfill or reliance on export markets which may or may not be there in the future”.

It also said that the lack of reliable data is a key barrier to convincing financial backers that a proposed facility would be viable. How you attract investment into this area is of course the main question. Research Councils UK drew attention to the,

“many excellent academic groups and active small companies developing new technological approaches”,

but noted that,

“the UK appears to lack sufficient numbers of large companies … who have the financial backing to develop a whole ‘process’, integrating a range of technology platforms, taking feedstocks to end product(s)”.

If this investment is to be attracted, confidence needs to be provided to investors, which will require demonstration facilities. The catapult in the north-east is providing that for at least one sector, but this will have to be rolled out further—another role for government or at least for government funding.

British Airways, which has a particular interest in the production of biofuels from waste, stressed the importance of government support to reduce the risks of high-capital intensive projects. There are other barriers to the development of the industry, such as the long contracts that exist for domestic or municipal waste—including, incidentally, contracts to export waste for refuse-derived fuel on the continent. Then there is the fragmentation of the household waste collection system, which is a historical fact. Much as one would like to say that this needs to be resolved, it is an issue that simply has to be recognised. Again, if there is an overall long-term strategy, time will eventually make it possible to co-ordinate and produce the sort of quantities of material and to build the infrastructure to meet the needs of this burgeoning technology.

We have put a lot of effort nationally into co-firing biomass with coal in power stations. That immediately provides an opportunity. Just think of the prodigious quantities of wood that has been stacked up in the generating power stations. Incidentally, this wood very often is imported. However, Professor James Clark very reasonably suggested to us that once one has accumulated so much biomass, one should extract the valuable chemicals first before burning it. After all, the calorific value is not affected. There is an opportunity here but one would not expect, I fear, a company whose business was generating electricity to start thinking in these terms. However, again, it is an opportunity. How do we encourage this little bit of lateral thinking? Indeed, as the noble Lord, Lord Krebs, pointed out, in other technologies it is not either/or; one can often first extract the high-value chemicals and then use the remaining biomass or biological material for energy.

We were careful to restrict our inquiry to what is defined as waste—something that at the end of an industrial, agricultural or forestry process becomes waste. However, in practice, once the infrastructure is in place, I am quite confident—particularly in the case of wood—that there will be an enormous amount of other raw material, or feedstuffs, available. I should declare an interest as a farmer and therefore own some rather scruffy woodland in the south-east; that is the nature of woodland in the south-east of England. It is a highly wooded area but, frankly, the woods are deciduous and are not managed commercially. They tick over. They used to be managed, when one could afford coppicing and there were charcoal burners. However, the woods are not producing the sort of products that they used to when there were charcoal burners. Once one starts to create a market for the thinnings and by-products, one suddenly finds that a lot more waste is generated than one ever knew existed—certainly not in the current statistics. In my case, our woodlands would be enormously improved by a start-up business—perhaps someone who had graduated from the local rural college, bought a chainsaw, set himself up in business having suitably qualified, and who would feed timber into these new infrastructure plants. It would be to the benefit of everyone.

We have now two champions in Matthew Hancock and Dan Rogerson. I welcome the fact that we have Whitehall champions, provided that this proves to be an example of joined-up government. I suggest that the first thing they do is, at least for the purposes of the United Kingdom, rewrite the waste hierarchy, make sure that adding the most value to waste is a high priority in our waste strategy and, with a bit of luck, we will soon be able to say that landfill has been consigned to history. It would be an embarrassing failure to explain to future generations why we had made such poor use of our resources.