Draft Renewable Transport Fuels and Greenhouse Gas Emissions Regulations 2018

John Hayes Excerpts

Monday 26th February 2018 General Committees

[Mr John Hayes (South Holland and The Deepings) (Con)]

It is a delight to serve on this Committee, Ms McDonagh, and to contribute briefly to the consideration of these regulations, which, as the Minister generously reminded the Committee, I was involved with as a Minister at the Department for Transport. The anxiety that he expressed to get this right, which was reflected by the shadow Minister’s words, is why the Government consulted widely and considered this over a considerable time.

It is right that we address emissions from transport—as the shadow Minister said, they are significant—and the principal way of doing so is to move to low or zero-emission vehicles. However, there is a strong case for biofuels, and it is perfectly possible to continue with our ambition to encourage the purchase of low or zero-emission vehicles—electric vehicles being the obvious case in point—while taking a generous view about the contribution that biofuels can make. That is not only because the biofuels industry is, as has already been said, significant in particular places, but because it is increasingly well established and invested.

I want to add only three things, given the broad agreement about those principles. First, it is important that we make this case in a way that has the most powerful resonance. For me, that is about the welfare of people who have to deal with emissions as they go about their daily lives. I spend considerably more time thinking about the air that children breathe, particularly in congested parts of our country—cities and so on—than about the rather more ethereal, remote and distant matters that sometimes dominate in the debate about gases and emissions. It is in those bread-and-butter terms, those fundamental terms—the quality of life that comes from the air that we breathe—that we should have this debate and conduct this argument. When we do so, suddenly people realise just why this matters so much and why the Government—alongside others; the Opposition have been just as forceful—are devoting so much time to these issues.

Secondly, thinking about the detail of the regulations, I was keen that there was a step change and that it took place over time. Indeed, the regulations now reflect just such an approach in respect of the production of biofuels from crops. That was because the industry is geared up to deliver biofuels by certain means and has invested accordingly, and it is important that we do not make a radical change that does irreparable harm to the biofuels industry. That step change will allow the industry to adjust in a practical way. However, it is really important that we look, with ever closer attention, at the production of biofuels from waste. The ability to turn waste into biofuels requires both technology and investment, but the industry is making that. I was able to visit some of the companies concerned and saw how they were taking waste and turning it into fuel. There is nothing more efficacious, because simultaeneously the waste is dealt with and people benefit from that.

We need to do much more of that, but I have to say to the Minister that that will require a really close association between our waste policy and our energy policy. At the heart of that will be the work done by his Department, the Department for Business and Energy—I cannot quite remember what it is called; hon. Members know what I am getting at—and the Ministry of Housing, Communities and Local Government. I am not sure that, historically, that collaboration has been well enough co-ordinated or as effective as it might have been. Waste policy can drive the alternative means of producing biofuel: obtaining it through crops.

With all that in mind, it is important that the Government understand that they can make all this happen only by working in partnership with the people who will deliver it on the ground; working with the biofuels industry and the manufacturers so that we can achieve the objectives of the draft regulations through a close association between what they want to achieve, their commercial interests and the interests of the Government in protecting the welfare of the people. Disraeli said that the Government have no greater purpose than the welfare of the people, and the welfare of the people is at the heart of the draft regulations.

Government can be a force for good, but only really when it is bold enough to know what needs to be done and modest enough to know that it can achieve what can be done only if it works with others. I know that the Minister both embodies—indeed, epitomises—that boldness and personifies that modesty.

[Jesse Norman]

I am grateful to the shadow Minister and my right hon. Friend the Member for South Holland and The Deepings for their useful, important and valuable contributions. I will respond to them in turn.

The shadow Minister raises the questions of whether we lack ambition, whether the target should be increased and whether there should be regular reviews of the cap on crop usage and the like. Let me say a variety of things. There is always a balance involved in legislation of this type, as he will absolutely appreciate. There is a risk to land use and there is a desire to stimulate the use of biofuels from all possible sources. Of course, an attempt is made to take that balance in the right way.

As he will know, this has been the product of—and is reflected in the delay he describes—considerable months of consultation in reaching the draft regulations and the balance that they strike. As he will be aware, the draft regulations have changed, as regards the crop cap; it has gone from being 2% to, as my right hon. Friend said, a stepped process, from 4% to 3% to 2% over time. I have had assurances, as I think has the industry, that given the level of utilisation at the moment, the draft regulations will not act as any kind of constraint on the growth of biofuels well into the next decade. Of course, they are being regularly reviewed, and we can look at that in further detail if such a constraint applies.

On the introduction of E10, I absolutely understand that it is a live and important issue, and my officials continue to work closely with the industry, as the shadow Minister will know. The taskforce did not recommend a mandate. There are conflicting views on these issues, as he will appreciate. It is important that we do not fetter suppliers even further, having done so a little bit in order to support the industry as we have done through the fuel obligation. One lesson from looking at international experience is that it is not merely, in some cases, an argument that there may be value from a mandate, but that the clear projection of information is important. We continue to look closely at that. It would require legislation, which raises a further question about how that consultation would take place and when legislation could be introduced. For all those reasons, we are not minded at the moment to move further in the direction that the shadow Minister described, but it is a matter for continued consultation and discussion.

With regards to the comments of my beloved colleague, my right hon. Friend the Member for South Holland and The Deepings, he is absolutely right to focus on the people who work most closely with those fuels and who are most directly affected by them. He rightly mentioned the step change that he engineered in the crop cap and pointed to the need for continued co-ordination across Departments. I hope he agrees that that has significantly improved in recent years. Whether on air quality, clean growth, connected and autonomous vehicles or ultra low emission vehicles, we continue to work closely with the Department for Environment, Food and Rural Affairs, the Department for Business, Energy and Industrial Strategy and the Ministry of Housing, Communities and Local Government.

[Mr Hayes]

I certainly acknowledge that—our work on air quality is evidence of it—but I am not yet convinced that we have waste right. I am not sure that across national and local government, in co-operation between local authorities or in collaborations between Departments, we are yet far enough advanced to ensure that waste policy ties to what the Minister has very sensibly set out today.

[Jesse Norman]

I take my right hon. Friend’s point, which has landed well with my officials. It is a two-dimensional problem: there is the question of whether Departments are co-operating and the question of how they interact with local authorities. I thank him for that. My officials have taken it on board and we will actively pursue it.

These regulations begin the implementation of a 15-year strategy for renewable transport fuels, which is designed to support investment in sustainable advanced fuels for automotive, aviation, road freight and other sectors; to maximise the industrial opportunities to be gained for the UK; to maintain public confidence in the value of renewable fuels; to provide certainty to UK producers and to the farms that supply them that their existing installed plant capacity for biofuels from crops will be fully utilised; and to continue to support the transformation of wastes into fuel where that gives the greatest economic and environmental benefits. That is no small challenge.

So far, UK suppliers have responded to the challenge by supplying renewable fuels that have increasingly higher greenhouse gas reduction benefits and are sustainable. My Department is confident that suppliers will also respond to the opportunities presented by these regulations.

We recognise that policy in this area is not without controversy and that the gestation period for these regulations has been long, as the shadow Minister mentioned. The proposed changes are not a surprise to industry—how could they be after such a period of time?—and there is broad agreement about the direction that these regulations will set, which emerged from extensive consultation. The debate has been very useful and I thank hon. Members for their contributions.

Question put and agreed to.