Bioeconomy: S&T Committee Report

Lord Krebs Excerpts

Wednesday 10th December 2014 Grand Committee

Moved by

[Lord Krebs]

That the Grand Committee takes note of the Report of the Science and Technology Committee on Waste or resource? Stimulating a bioeconomy (3rd Report, Session 2013–14, HL Paper 141).

[Lord Krebs (CB)]

My Lords, I start by thanking the members of the Science and Technology Select Committee for their excellent contributions to this inquiry. At the same time, I thank our specialist adviser, Mr Ian Shott CBE, who is an experienced expert in the bio-based industries. I also thank the committee support team for their superb contributions, and I thank the Minister for the Government’s response to our report, to which I will come later.

This report deals with just one aspect of waste—namely, carbon-containing waste. In this, we include biological materials such as food waste, wood offcuts and farming waste, including manure and plant remains, and the carbon-containing gases, such as carbon dioxide and carbon monoxide, which come out of our factory chimneys.

Our central question was simply: should this carbon-containing waste be treated as an environmental problem or as a business opportunity? Before delving into the report, perhaps I may set it in a wider context. The United Kingdom, in common with other advanced economies, produces a colossal amount of the stuff that we call waste. According to official figures, the tonnage of waste produced in this country is equivalent to the weight of 200 million cars—that is, six times the total number of cars on the UK’s roads. This waste includes the biological material that I have referred to, including food, and it includes building materials, industrial bioproducts and discarded consumer goods, as well as the industrial gases that I mentioned.

The disposal of this waste is to a large degree governed by a number of EU directives—in particular, the waste framework directive and the landfill directive. EU policy is based on the well known principle of the waste hierarchy. The first priority is to reduce it—that is, to produce less waste. The second is to reuse material or recycle it, and there are other types of recovery, including energy generation. The last, at the bottom of the hierarchy, is to dispose of it—for instance, into landfill. All four Administrations of the UK have policies to deal with waste according to the EU directives.

The UK has traditionally lagged behind many other European neighbours in dealing with waste. For instance, we still put nearly half of our municipal waste into landfill, while some other countries, such as Germany and the Netherlands, put none of theirs into holes in the ground. While this could be seen as bad news for the environment and for business, it may also present us with an opportunity, as I shall explain shortly.

Our Select Committee report is not the only recent analysis to point to the business opportunities that could arise from waste. The 2020 commission’s report, Sweating our Assets, produced by a group of parliamentarians within the last year, makes the important point, which we echo, that waste is a business opportunity. It estimates that £1 billion-worth of materials is thrown into landfill each year instead of being used for productive purposes. The report goes even further, suggesting that, rather than measuring our economic performance in terms of labour efficiency—per capita GDP—we should measure ourselves in terms of how efficiently we use resources. As I understand it, the report was produced at the request of the Chancellor of the Exchequer, and I should like to ask the Minister whether she is aware of any impact of this important and thoughtful report on thinking in the Treasury.

Food waste has been very much in the news in the last few days, particularly in relation to food poverty and the provision of food by food banks. It has been estimated that more than one-third of our food in this country is wasted, mainly in retail, catering and the home. The ideal, according to the waste hierarchy, would be to eliminate this waste but, given where we are, the highest priority is to reuse it, which is what the Oxford Food Bank—I declare an interest because my wife is a trustee—is trying to do. But, however good we are at eliminating and reusing, we will inevitably produce food waste and other carbon-containing waste. Therefore, the question both now and in the long term is: how can we make the best use of it?

Current policies incentivise relatively low-value uses of carbon-containing waste such as feed stocks for generating energy in the form of heat, liquid fuel or electricity—for example, through anaerobic digestion facilities. While this may be better than putting waste into landfill, it may not be the best possible solution. In fact, some other countries, such as Germany, have gone much further down the anaerobic digestion route, and are having to grow crops to feed their AD facilities as not enough waste is available. Rather than rushing in this country to build many more anaerobic digestion facilities, we have an opportunity to think about smarter uses for carbon-containing waste.

In our inquiry, we heard how developments in microbiology, synthetic biology and enzymology will in the future enable carbon-containing waste, including waste industrial gases, to be turned into high-value products. These include speciality chemicals such as limonene—a fragrance—pharmaceuticals, polymers such as polylactic acid, and commodity chemicals such as esters. Many of these chemical compounds are built of atoms of carbon, oxygen and hydrogen, the major components of carbon-containing waste. By harnessing the power of biological chemistry it is possible to reassemble waste into valuable products instead of simply burning or burying it. This is not just a gleam in the scientists’ eye. The technology for some of these transformations already exists, and for others it is within reach in the next few years. We heard of one industrial-scale example already in practice, a partnership between Virgin Atlantic and LanzaTech to use bacteria to convert carbon monoxide waste gas from steel mills into jet fuel. LanzaTech estimates that 19% of the world’s jet fuel demands could be met by this technology, which has a carbon footprint of probably around half that of conventional jet fuel.

The bioeconomy may also have a role in helping us to meet our legally binding target for reducing our greenhouse gas emissions. At the moment, one of the key strands of the nation’s strategy is the development of carbon capture and storage—putting waste carbon dioxide underground. If we are smart, in the future we may see carbon capture and storage replaced by carbon capture and use, as a way of generating a new economy and tackling the challenge of climate change.

Extracting high-value chemicals from waste is not necessarily an alternative to the lower value use of using it to generate energy. Once the high-value products have been extracted, the residue can often be used in anaerobic digesters or syngas generators for energy production. There is no doubt about the potential to develop significant money and economic benefit from carbon-containing waste. BIS gave us an estimate for the market of £100 billion for the bioeconomy as a whole, of which products from carbon-containing waste will be a substantial proportion. INEOS estimated that waste could supply the equivalent of 40% of our petrol needs in this country.

Turning waste into useful products may also make good environmental sense, but this needs careful life-cycle analysis for each case. We recommended that a more consistent approach to life-cycle analysis should be adopted, in order to assess the environmental costs and benefits.

Let me turn to some of our other conclusions and recommendations and some questions for the noble Baroness the Minister to answer in her reply, I hope. I should say at once that we were very pleased that the Government accepted some of our key recommendations without reservation. In their response, the Government agreed with our recommendation that the lead department for developing a long-term strategy for a waste-based, high-value bioeconomy should be BIS rather than Defra, reflecting the transformation from treating waste as an environmental issue to treating it as a business opportunity. The Government’s response said that the Minister of State for Business and Energy was the lead Minister, with a cross-departmental steering group. We were pleased with this response. However, more recently—that is to say yesterday—the Government updated this by telling us that the ministerial champion role is now shared between that Minister and the Parliamentary Under-Secretary of State in Defra for Water, Forestry, Rural Affairs and Resource Management. I understand from the recent update that a working group across departments is supporting the two Ministers in developing a long-term plan. Naturally, if a responsibility is split between departments, there is a danger of it falling between the cracks, so I seek a reassurance from the noble Baroness that that will not be the case. Perhaps she would also update us on the progress of the working group.

We also recommended that the research councils and the Technology Strategy Board should work together to ensure that funding is available to enable the UK’s outstanding academic community of scientists, chemists and process engineers to develop the knowledge base that would underpin the new industries. In their response, the Government referred to a number of new initiatives, including the new Industrial Biotechnology Catalyst with £45 million-worth of funding, which is most welcome. We were also concerned about the “valley of death”; that is, how ideas which are developed in the laboratory may not be able to cross the development phase into full-scale industrial application. We recommended that BIS should review whether the High Value Manufacturing Catapult, which was set up to help to bridge the valley of death, has sufficient capacity to support technology transfer in this area, and again I hope that the Minister will give us an update on this from the Government’s perspective.

We drew attention to the fact that the current subsidies for generating energy from biowaste may be distorting the market, and the Government share our view that subsidies should not inhibit the development of high-value products from waste and that the policy framework should be stable to encourage investment by the private sector. I hope that the Minister will offer a comment on this.

Finally, I come to two areas in which we were a little disappointed with the Government’s response. The first, perhaps remarkably, is that it is difficult if not impossible to get an accurate picture of precisely how much waste there is. I shall quote from one industrial witness, who told us that the,

“publicly available data is poor and patchy, coarse-grained and gathered for different purposes and hard to compare from source to source. It throws into stark relief how poorly informed we are as a sector to make robust strategic decisions about the future delivery of waste infrastructure”.

That is not a good comment to come from the industrial sector, which we hope will step in to take forward this important new area. We recommended that BIS should take steps to ensure that information on both domestic and non-domestic waste is collated in such a way that it is able to be used as a resource. The Government did partially accept that, but it was not totally clear that our recommendation had been accepted. I would very much welcome clarification from the Minister on this point. Are the Government really committed to creating a single database that will be of use to the industries?

Secondly, we were told in our inquiry that the different pattern of waste collection by local authorities in England was a real barrier to fully effective utilisation of biological waste. Strikingly, we heard that while 95% of Welsh local authorities had separated food waste collections, and that by next year 100% of non-rural Scottish local authorities will have separated food waste collections, for England the figure is a mere 27%. This may explain why fully one-third of food waste goes into landfill in England, which is a shocking statistic given that this is a potentially valuable resource. Unfortunately, the Government’s response was to say that waste collection is a matter for local councils. It does seem to me that if the Government are serious about utilising biowaste as the feed stock for a new high-tech bioeconomy, they will need to do more to ensure that waste is collected in a way that helps rather than hinders the emerging industry. I hope that the Minister will be able to make some positive remarks on this matter. I know that she has a local authority background herself and thus will be well tuned to these matters.

In closing, I should confess to the fact that I come from Sheffield, where I learned the local saying, “Where there’s muck, there’s brass”. Waste has traditionally been seen as a problem, but it now needs to be seen as a valuable resource—a way of making brass. However good we become at reducing waste, there will always be some and this will, if we get it right, be the basis of a new high-tech economic sector creating jobs and wealth, and at the same time helping to protect our environment. I look forward to hearing the contributions of other noble Lords to this debate and the Minister’s reply. I beg to move.

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[Lord Krebs]

My Lords, I thank the Minister for her detailed response to the various points that I and other noble Lords raised in the debate. We certainly look forward to the publication in the spring of next year of the road map, which will set out more fully the Government’s strategy for dealing with this important area. I, too, thank all noble Lords who have contributed to the debate and made such interesting and important points.

Motion agreed.