Future of Biomass

Graham P Jones Excerpts

Monday 20th February 2012 Commons Chamber

[Graham Stringer]

The hon. Lady makes an important point.

The committee warns that the danger of that error is “immense”, stating that

“current harvests…have already caused enormous loss of habitat by affecting perhaps 75% of the world’s ice- and desert-free land, depleting water supplies, and releasing large quantities of carbon into the air.”

On that basis, it urges that European Union regulations and policy targets should be revised to allow bioenergy use only from additional biomass that reduces net greenhouse gas emissions without displacing other necessities such as the production of food and fibre. It advises that accounting standards should fully reflect all changes in the amount of carbon stored by ecosystem, and that energy production from biomass should be based on by-products, wastes and residues rather than on stem wood that would otherwise continue happily to grow as forest biomass.

The implications of that analysis were explored by Atlantic Consulting in “Biomass’ Forgotten Carbon Cost”, published on 8 November 2011. I have sent a copy of that paper to the Minister’s Department, as well. Atlantic Consulting looked at the pattern of typical biomass plants in the UK and found that 58% of their fuel tonnage derived from wood. Some of that is waste, such as end-of-life furniture and arboreal cuttings, and some is residue, such as that from sawmills. Unfortunately, however, the largest fuel component of biomass power is stem wood—that is, tree trunks harvested with the intent of using them for boiler fuel.

Atlantic Consulting proceeded to estimate the carbon footprint of a typical UK biomass plant. Interestingly, its footprint is 690 grams of carbon dioxide equivalent per kWh, which is well above the current UK average footprint of 520 grams per kWh and the lowest-carbon conventional gas-fired combined cycle at 401 grams per kWh. It also far exceeds the eligibility hurdle of 285.12 grams per kWh set for renewable obligation certificates from 2013. In that light, more than half of biomass-powered capacity would not qualify for credits under the renewables obligation. That could be a shock to the owners if they found that they did not benefit, and it would certainly be a shock to taxpayers if they found that they were subsidising higher-carbon power generation than the existing average.

Will the Minister provide the owners and the taxpayers with a measure of reassurance, because it appears that the current sustainability criteria for biomass are not stringent enough? If the European Environment Agency scientific committee or Atlantic Consulting are wrong in their thinking, will he please explain the situation, so that we can get this right for all concerned? The interests of the economy and of the environment demand clarity.

In October last year, the Scottish Government published a consultation that proposed removing all subsidy from large-scale woody biomass electricity plants. Large-scale electricity-only biomass was, in their view, inefficient and required more wood than the UK could produce. Although current plans are to import wood, there is no guarantee that biomass plant operators will look exclusively abroad for their wood, and the overseas supply might not be stable or secure. The current subsidy means biomass providers will be able to afford more than the current market rate for wood, which might push prices up and price out traditional wood industries such as sawmills, wood panel mills, furniture manufacturers and construction, which in turn, the Scottish Government said, puts hundreds of skilled rural jobs at risk. What is the Minister’s view of the Scottish policy stance? Are the Scottish Government wrong, or are they ahead of the game?

[Graham Jones (Hyndburn) (Lab)]

In the past five years we have seen wood prices rise by 55% because of biomass subsidies. An employer in my constituency, the furniture manufacturer Senator, which employs about 1,000 people has to compete against rising wood prices simply because of the biomass subsidy. Should not the Government consider the impact of biomass subsidies on employment in furniture manufacturers and other wood-using companies, as well as the impact on the environment?

[Graham Stringer]

My hon. Friend makes exactly the same point as I did in a different way.

I think that biomass deserves a place in the renewable energy mix of the future, but we need to get the rules of the game straight in advance, so that society is not left picking up the pieces of an impetuous policy.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I congratulate the hon. Member for Blackley and Broughton (Graham Stringer) on conducting this timely and important debate. I recognise the real concern and knowledge he has brought to it. Many serious issues relating to our future energy strategy were raised, albeit briefly, including the potential impacts on human health and the sustainability of biomass feedstocks. These are issues that my Department takes extremely seriously.

The hon. Gentleman argued passionately and with genuine conviction, so I welcome the opportunity to explain the Government’s policy on the issues raised. Above all, I seek to reassure hon. Members of the coalition’s commitment to protecting human health and the wider environment.

The coalition is building an economy that counts and cuts our carbon emissions. We are making our energy secure in a volatile world and helping to create more green jobs and a more sustainable economy. As my right hon. Friend the Prime Minister has said, we are determined to make this coalition the greenest Government ever. That pledge has many strands, but an increased use of sustainable biomass is clearly an important element of it. Sustainable biomass is extremely versatile; its efficient use will play a key role in helping to meet the many challenges of decarbonising our economy. This is true not just for energy, but right across the thriving bioeconomy we want to develop.

I understand the concerns—very important ones—expressed about the effect on air quality, on the natural environment and on the wider health of communities. I recognise that these are crucial issues and not just for those in the immediate vicinity of biomass power plants. Hon. Members will be aware of the Environmental Audit Committee’s ninth report, “Air Quality: A follow-up report”. I am unable to pre-empt the Government’s formal response to that report, which has yet to be published, but I would certainly acknowledge that there are significant health and environmental benefits from reducing air pollution.

I believe that the hon. Gentleman has erred in his calculations on mortality linked to biomass emissions. I am happy to correct some misapprehensions. Larger-scale industrial and commercial plant do not have the same properties as domestic boilers; they are very different indeed. Plant of this scale is more likely to have chimneys appropriately sized to allow emissions to disperse much more easily into the immediate atmosphere. This reduces the impact of the emissions on ground-level concentrations very significantly indeed. Larger-scale plants operate better and are more efficient, and I can also reassure the hon. Gentleman that all modern biomass plants here in the United Kingdom are subject to stringent pollution controls. Indeed, emissions from waste incinerators are more strictly regulated than those resulting from any other form of thermal power generation.

The hon. Gentleman referred to Peel Energy’s proposed new plant at Trafford, Greater Manchester. I am, of course, unable to comment specifically on that particular project, but the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry), discussed similar issues in Westminster Hall in 2010.

Let me remind the House of the extremely rigorous permitting process to which a 20 MW biomass plant will need to be subjected. Developers must produce an environmental statement covering transport, social and environmental issues. It may be necessary to comply with the waste incineration directive, which sets strict emission limits for pollutants. The Environment Agency will not grant the requisite permits for a waste incinerator if it does not comply with the directive, and the plant would be likely to be subject to the environmental permitting regulated by the agency.

The legislation sets strict environmental standards for thermal plant, which cover a range of pollutants including nitrogen oxides, sulphur dioxide, heavy metals and dioxins. If the Environment Agency were to issue a permit, it would cover such issues as limits on emissions to air, water, sewer, land and groundwater; the disposal of ash; operating conditions such as temperature, oxygen and polluting gas concentrations; conditions relating to the fuel that can be burnt; monitoring and reporting requirements; and conditions to achieve control of noise emissions and energy efficiency. The agency would then regulate the plant by requiring continuous monitoring of the main pollutants for which strict limits are set and periodic monitoring for other substances, conducting regular announced and unannounced inspections, investigating non-compliance with any condition of the permit, and taking enforcement action if necessary.

Let me also dispel some myths about emissions from biomass specifically. Emissions from biomass and energy from waste plants have fallen considerably in recent years as a result of new stringent standards. Biomass burning causes only a small fraction of the air-quality impacts in the United Kingdom, most of which are caused by transport. Studies of the health of communities living near energy from waste plants have not established convincing links between emissions and any adverse effects on public health. It is clearly not possible to rule out adverse health effects completely, but any potential damage from modern, well-run and well-regulated incinerators is likely to be undetectable.

Let me now deal with the reasons for supporting biomass energy, alongside other uses of wood and biomass. There is a great diversity of biomass feedstocks, including energy crops, waste wood and municipal waste. Our future energy landscape will require a mix of technologies, including onshore and offshore wind, solar, nuclear, fossil fuel with carbon capture, and, of course, biomass. There will also be a mix of sizes, from decentralised householder energy to large electricity plants and coal-to- biomass conversions.

Biomass is one of the most important contributors to the new energy landscape that we are building. Its second defining feature is versatility: it can be used for heat, electricity and transport. Moreover, bioenergy can provide significant new business and employment opportunities for the UK. For example, the expansion of biomass heat in off-gas-grid areas in the UK will mean a growing order book for specialist boiler manufacturers and demand for new local businesses to provide installation and maintenance, and will create opportunities throughout the biomass production and distribution chain. Since April 2011, investments totalling at least £1.6 billion have been announced for biomass technologies, and they have the potential to create nearly 5,000 jobs.

[Graham Jones]

May I take up a question asked earlier? Has the Minister carried out a study of the effects on employment, particularly in the furniture industry? He has spoken of jobs being gained, but what about the jobs that will be lost if wood-making industries are adversely affected?

[Gregory Barker]

We do not believe that this is a zero-sum game. We believe that the majority of biomass for use in waste or energy plants will be imported; this is not about sucking in the available biomass that, rightly, goes into other industries, and I will address that later.

Of course, building a low-carbon energy system will not be easy, and we know that substantial changes will be required as we move away from the familiar technologies of today. Decisions taken now will shape our energy future for decades to come, so it is vital that we make the right strategic decisions. We will make sure that safeguards are in place to ensure that technologies are low-carbon, efficient and sustainable.

I think that we can all agree that biomass, and its use for energy, raises complicated issues, and we have heard several such examples from the hon. Member for Blackley and Broughton. That is why the Department of Energy and Climate Change will publish a cross-government UK bioenergy strategy next month, which will recognise the complexity and importance of these issues. Key for the strategy has been understanding the value of the alternative uses of biomass in decarbonising the economy, in terms of both cost-effectiveness and carbon-effectiveness. There are very real questions as to what is the best of use of the world’s limited biomass feedstocks and, indeed, how far bioenergy saves carbon compared with fossil fuels.

We also want to understand how the growth of bioenergy has an impact on other uses, which relates to the point made by the hon. Member for Hyndburn (Graham Jones). We have considered the availability and price of feedstocks, including for traditional uses of wood, and we have also worked closely with the Committee on Climate Change, which published its own review in December. We are also working closely with stakeholders. I hope that hon. Members will see that this is an extensive piece of work, but the strategy is not yet finished. It is clear that the use of wood and energy crops for energy production can lead to positive carbon balances, and that is true even when accounting for life-cycle analysis. Our evidence shows that wood products are valuable as carbon stores, and they have an important role to play alongside bioenergy in decarbonising the economy. Clearly, we need to take a holistic view of biomass uses in setting bioenergy policy, and that is what we will do in taking policy decisions, for example on the renewables obligation banding review. We will also do that when looking at support for renewable heat technologies and renewable transport. We will also ensure that our carbon objectives marry up with our wider energy ones.

However, it is crucial that we take action on biomass sustainability. We will therefore ensure that bioenergy does not result in the loss of important habitat or release more carbon than it saves. Biomass can be a very low-carbon energy source, but that requires it to be grown, harvested, processed and transported sustainably. That is why we have introduced sustainability criteria into the renewables obligation, which means that only sustainable biomass will be supported in the future. Generators will report on their performance against a target of 60% greenhouse gas emissions savings compared with fossil fuel use and they will also have to report on land use criteria. We have set an ambitious but, we believe, achievable target that will ensure that investment in new bioenergy comes forward to deliver our energy and climate goals. From April 2013 we intend that the payment of renewable obligation certificates will be linked to these standards. Biomass that does not meet these standards will not qualify for financial support, and we expect to introduce similar standards into the renewable heat incentive.

Using wood and biomass feedstock for renewable energy is a necessary step towards our goals, but it is not the only use of this resource. Wood products and other non-energy uses of biomass are also important in decarbonising and strengthening our economy. The Government are committed to ensuring a strong future for the wood products industry. We recognise that the growth of bioenergy must not be at the expense of the other sectors that serve similar aims, and we are committed to a close and continuing dialogue with biomass-using industries to ensure we understand their needs appropriately.

We intend that there be competition between sectors, but that competition needs to be positive, sustainable and not destructive. Developing local sources of supply to fuel the growth of renewable heat is another gain, as is using locally produced residues such as straw and waste products at the end of their life. The Government are also very aware of the potential of the global market for sustainable feedstocks. We expect much of the growth of bioenergy in this country to be fuelled by imports, particularly from north America and the EU, which are sources of sustainable timber. Expanding imports is an important way to avoid damaging competition for domestic supplies. Wood fuel is increasingly traded as a global commodity, so UK wood supplies can and will be exported for energy use in other countries where that will deliver a better price.

[Graham Jones]

The Minister is generous in accepting interventions. As I alluded to earlier, wood prices have risen by about 55% in the past five years, which is clearly the result of market forces. Does he not think that that will carry on, thus putting pressure on those other industries that use wood?

[Gregory Barker]

The hon. Gentleman makes a sensible point, and I understand that friction. Traditional users of British timber and wood waste have legitimate concerns, which we continue to hear. We will continue to ensure that their voice is clearly heard in policy making. The representations that they have made have been reflected in the way in which we have responsibly ensured that the users of biomass are not over-subsidised, which can be seen in the renewables obligation review and the renewable heat incentive. We think that there is a fair balance to be struck. There is a global market, which is one of the main reasons why domestic feedstock prices have been rising—it is not just the result of domestic demand.

I thank the hon. Member for Blackley and Broughton for introducing this valuable debate, which has allowed the Government to put some important data on the record. Our challenge is to build a low-carbon economy that is based on energy supplies that are safe, secure and sustainable; that creates green jobs and sustainable growth; and that delivers economic prosperity. The efficient use of sustainable biomass in all sectors will play a key role in helping us to meet that challenge. We will of course continue to maintain our commitment to the protection of human health and the environment above all things.

Question put and agreed to.