Renewable Transport Fuel Obligations (Amendment) Order 2024

Lord Ravensdale Excerpts

Tuesday 26th March 2024 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Davies of Gower) (Con)]

My Lords, this order would amend the Renewable Transport Fuel Obligations Order 2007 so that recycled carbon fuels, known as RCFs, are eligible for support under the renewable transport fuel obligation—RTFO—scheme.

The RTFO scheme establishes targets to drive the supply of renewable fuels. It does this by placing obligations on suppliers of transport fuel to ensure that renewable fuels make up a proportion of their overall supply. The amount of renewable fuel that should be supplied is calculated as a percentage of the volume of relevant fossil fuel supplied in a calendar year.

This obligation is met by acquiring certificates which are issued for the supply of sustainable renewable fuels. These certificates can be redeemed at the end of an obligation period, as well as traded between parties. The value of these certificates therefore provides a revenue stream for producers of renewable fuels and demand for their products in the fuel market. While the RTFO has operated successfully since 2008, it is important that it continues to evolve as new technologies and opportunities for emissions-reducing fuels are developed.

We committed to supporting RCFs in the Government’s transport decarbonisation plan and this statutory instrument delivers on that goal. It is the product of two consultations with industry and in-depth working with industry experts and across government departments. The instrument will help to maximise the greenhouse gas savings that can be achieved under the RTFO by broadening the available feedstocks for eligible fuels and encouraging the development of a new industry.

So what are these new fuels? RCFs are fuels produced from fossil wastes that cannot be avoided, reused or recycled, and have the potential to reduce greenhouse gas emissions relative to petrol, diesel or kerosene. To date, the RTFO scheme has supported only fuels produced from renewable feedstocks, such as biomass and renewable energy. However, emerging technologies and production methods mean it is possible for fuels produced from fossil wastes to contribute to emissions reductions to a similar degree to renewable fuels.

For example, wastes such as municipal solid waste—black binbag waste to most of us—can be processed using advanced techniques to form alternatives to fossil diesel and jet fuel. These fuels can provide significant greenhouse gas emissions savings compared with their alternative end-of-life fate, such as incineration in energy- from-waste plants.

Recent amendments to the Energy Act via last year’s Energy Bill permit RCFs to be included in the RTFO as well as other renewable transport support schemes, such as the forthcoming mandate for sustainable aviation fuels, provided they cause or contribute to a reduction in carbon emissions. The amendment to the Energy Act recognised that RCFs can play an important role in decarbonising different transport modes, including harder to electrify vehicles such as heavy goods vehicles and airliners.

Turning to the specific content of this SI, it amends the RTFO order to add wastes of fossil origin as an eligible feedstock for fuel production. Importantly, it also designates RCFs as a “development fuel”. These development fuels can be used to fill a sub-target in the RTFO designed to encourage the supply of novel and strategically important emerging technologies for fuel production. As a development fuel, qualifying RCFs also need to meet additional eligibility criteria in the order ensuring that only fuels that comply with existing fuel standards can qualify. This mitigates any air quality or compatibility concerns, as the fuels will in essence be chemically comparable with transport fuels already in use today.

This order will also allow RCFs to claim one development fuel certificate per litre of fuel supplied, which is half that of similar eligible renewable fuels. This is in recognition that truly renewable fuels remain more valuable, while still rewarding emissions savings from RCFs. To ensure that we mitigate any unintended consequences, the order also introduces detailed sustainability criteria. These ensure that support is provided only to fuels that are produced from genuine non-recyclable wastes and that they provide a saving on carbon emissions of at least 50% compared to traditional fossil fuels such as petrol and diesel. These criteria ensure that the policy complements the waste hierarchy and avoids incentivising the creation of wastes while still delivering emissions savings compared to the alternative likely end-of-life fate for different waste streams.

Why we are supporting RCFs? We expect that RCFs will have an important part to play in meeting our future emission reductions targets. Renewable fuels already contribute one-third of transport emissions reductions from the current carbon budget. Widening eligibility to include RCFs will ensure that such fuels can continue to make that important contribution as part of the transition to the electrification of road vehicles. Advanced fuels such as RCFs can generate significantly lower emissions compared to traditional fossil fuels.

The UK is leading the way in developing many of these technologies, supported by grant funding from the Department for Transport via the Future Fuels for Flight and Freight competition and, more recently, the Advanced Fuels Fund. Introducing RCFs into the RTFO now sets a helpful precedent for the forthcoming mandate for sustainable aviation fuel, which the Government have committed to introduce on 1 January 2025 and which will operate in a similar way, but for the aviation sector. Including RCFs in both schemes is important, as production processes mean that many facilities will produce both road fuel and SAF at the same time. Supporting RCFs under the RTFO will also increase the range of feedstocks eligible for support and encourage the innovation needed to increase the deployment of low-carbon fuels in harder to decarbonise vehicles such as heavy goods vehicles and airliners.

A further benefit of supporting RCFs is to provide a productive alternative for difficult to manage wastes. Examples of RCF feedstocks include unrecyclable, often contaminated plastics such as black bin bag waste. These wastes are currently mostly incinerated or sent to landfill. Processing them into fuels offers a more sustainable method of waste management. RCF production also utilises many of the same processes and technologies needed to be developed in order to increase the efficiency and capability of chemical recycling. Providing extra investment into these processes will therefore lead to wider waste management benefits in future.

In conclusion, as I have said, fuels supplied under the RTFO scheme currently deliver about one-third of all domestic transport carbon savings under current carbon budgets. However, it is vital that we expand the range of feedstocks we use if we are to continue to grow their contribution and meet our net-zero goal. RCFs have the potential to deliver emissions savings across the transport sector, while also supporting the efficient handling of wastes, and provide an opportunity for a valuable emerging UK industry, something I think we should all support. I beg to move.

[Lord Ravensdale (CB)]

My Lords, I declare my interests as set out in the register, particularly as a chief engineer working for AtkinsRéalis, an engineering consultancy, and as a co-chair of Legislators for Nuclear.

I very much welcome this statutory instrument, not least because I put forward and agreed with the Government the amendment to the Energy Act 2023 which gave them the primary powers to undertake this change. As the Minister said, recycled carbon fuels can provide significant carbon savings compared with traditional fossil fuels such as petrol, diesel and kerosene, and will save large quantities of carbon for hard-to-abate sectors. They will also enable RCFs as key near-term components of sustainable aviation fuels in the SAF mandate. Clearly, how these carbon savings are to be determined will be a key point in the implementation of these regulations, so can the Minister perhaps expand to the Committee on the detail of how this carbon savings process will be undertaken?

Secondly, the other part to my amendments to the Energy Act 2023 related to nuclear-derived fuels and enabling these to obtain support under the RTFO. These powers will be important in the near term for plans for hydrogen-powered construction vehicles and for hydrogen-powered buses at Sizewell, and in the medium term for the SAF mandate, given the unique characteristics of nuclear plants and their ability to produce hydrogen and synthetic fuels economically and at large volumes, leveraging the heat that they generate as well as electricity to generate large volumes of sustainable aviation fuel. Can the Minister perhaps update the Committee on when we will see a similar statutory instrument for nuclear-derived fuels, and indeed on the timescales of those associated consultations?

Finally, I highlight the need for cross-departmental working in this area, particularly on sustainable aviation fuels, which I know is already happening. There is a need for ministerial sponsorship of a senior-level, cross-Whitehall discussion, including the relevant departments, including the DESNZ, the DfT and the Treasury, to initiate those activities and dialogue on policy, funding and collaborations needed to unlock this SAF opportunity from recycled carbon fuels and from nuclear-derived fuels. This would really help break down those silos and move this area forward. Can the Minister also please state what plans there are for such cross-departmental work in the future?

[Baroness Randerson (LD)]

My Lords, I thank the Minister for his introduction. The noble Lord has just referred to the significance of this instrument. It is a very modest little piece of secondary legislation, but it could well usher in a whole new era in relation to fuels. This is about recycled carbon fuels, which are potentially a useful extension to the RTFO order. It increases the range of fuels, as the Minister has said, which can be rewarded under the order, and will therefore increase potential total carbon savings.

At the heart of this is the fact that this is not zero carbon but lower carbon: up to 50% lower than traditional fossil fuels. Of course, we are with various techniques moving away from our traditional fossil fuels: therefore, one would say that perhaps 50% lower might be more modest as a percentage later on, as the move away from fossil fuels is generated. That is very important, because it is based on waste of fossil fuel origin, such as municipal solid waste. So, in terms of providing a new fuel, this is also solving an old problem, and is therefore very welcome.

Renewable Transport Fuel Obligation

Lord Ravensdale Excerpts

Tuesday 13th June 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

The Government have incredibly high standards of sustainability for the fuels that we allow under the renewable transport fuel obligation. As I am sure the noble Baroness is aware, many of the crops grown for biofuels are not fit for human consumption. However, they are grown because they are useful not only for biofuels but for animal feedstock. There is a very careful balance to be struck. The Government are well aware of the land use issue and the need to be able to develop enough human-supporting crops. As I say, we keep all of this under review.

[Lord Ravensdale (CB)]

My Lords, I declare my interests in the register. I have two questions. First, what progress is being made with regulations to enable support for nuclear-derived fuels and recycled carbon fuels within the RTFO following the recent amendment to the Energy Bill? Secondly, quota-based systems such as the RTFO are being implemented in other countries for the purposes of decarbonising ammonia and fertiliser production. What plans do the Government have for similar schemes to clean up ammonia?

[Baroness Vere of Norbiton (Con)]

As the noble Lord will be aware, the Energy Bill is currently working its way through the other place. I am very pleased that we were able to get the amendment for recycled carbon and nuclear-derived fuels, as it goes into primary legislation. We are working concurrently on the secondary legislation to bring that into effect as it is needed and into the various schemes. On ammonia and various other renewable fuels, we are looking very carefully across the entire suite of low-carbon fuels. The Department for Transport will be publishing a low-carbon fuel strategy later this year.

Midlands Rail Hub

Lord Ravensdale Excerpts

Tuesday 15th November 2022 Lords Chamber

Asked by

[Lord Ravensdale]

To ask His Majesty’s Government what assessment they have made of the Outline Business Case of the Midlands Rail Hub.

[Lord Ravensdale (CB)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I declare my interests in the register and note that I am co-chair of the Midlands Engine.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, the Department for Transport received the outline business case for the Midlands Rail Hub on 14 November. We now need to assess the contribution of the scheme to the Government’s objectives, value for taxpayer money and affordability, considering the forthcoming Autumn Statement. I expect that decisions on how to proceed with the Midlands Rail Hub will be made in 2023.

[Lord Ravensdale (CB)]

I thank the Minister for that Answer. Aside from the clear economic benefits of the scheme, what struck me about the rail hub is that all stakeholders in the Midlands have come together to support it. What additional assurances can the Minister give me that the Government will give the project their full support, including Midlands Rail Hub east to Leicester? Can the Minister also give some assurance on funding the quick win in the business case of Snow Hill platform 4, which could be delivered by 2025, allowing us to take a new train from Birmingham’s business district direct to London?

[Baroness Vere of Norbiton (Con)]

My Lords, as I said, we received the outline business case yesterday, so I hope the noble Lord will forgive me in that, clearly, we need to review what it says and what quick wins or otherwise there may be. I am aware that the reinstatement of platform 4 at Snow Hill station in central Birmingham is a key part of the work. It could be a quick win but no funding decisions have been made, and we expect that works will be delivered within the RNEP.

Transport: Zero Carbon Target

Lord Ravensdale Excerpts

Tuesday 27th April 2021 Lords Chamber

[Baroness Vere of Norbiton (Con)]

The Government are of course focusing on our supply lines from Asia, but also on what we can do domestically. Recent experiences have shown us that being overreliant on any particular country is possibly not the wisest idea. The Government are investing £318 million in the Faraday battery challenge. Part of that is the amount of money we are investing in the Faraday Institution, which within two years has become a world leader in electrochemical energy storage research. There are 400 researchers there, looking at batteries with longer range; they are lighter, faster charging, durable, safer and sustainable. Allied to that, we will look at the supply chain for the constituent elements that need to go into those batteries.

[Lord Ravensdale (CB)]

My Lords, I declare my interests as in the register. In my mind, the Question from the noble Lord, Lord Berkeley, is a good illustration of why a whole-systems approach is needed to tackle net zero. Can the Minister say what steps the Government are taking to address the problem of silos inherent in individual departmental responsibilities—for example, in BEIS and DfT? Does she agree with me that a cross-departmental delivery body sitting below the Cabinet committees is required to properly implement a systems approach to net zero?

[Baroness Vere of Norbiton (Con)]

It is probably above my pay grade to try to reorganise government from the Dispatch Box, but the noble Lord is absolutely right that numerous government departments have a very strong interest in what we are doing. For example, the Department for Transport will publish its transport decarbonisation plan in the coming weeks. As part of that, we will set out what we will do when it comes to hydrogen technology. Subsequent to that, BEIS will publish the UK hydrogen strategy, which will of course talk about how we can focus on the low-carbon production of hydrogen. We are capable of working together across departments and are doing so well so far, but the noble Lord may be right; something may be set up in future.

HS2: Phase 2B

Lord Ravensdale Excerpts

Monday 8th February 2021 Lords Chamber

Asked by

[Lord Ravensdale]

To ask Her Majesty’s Government what assessment they have made of the impact on (1) the East Midlands, and (2) Yorkshire, of not delivering the eastern leg of HS2 Phase 2B in full.

[Lord Ravensdale (CB) [V]]

I beg leave to ask the Question standing in my name on the Order Paper and declare my interests as co-chair of the Midlands Engine All-Party Parliamentary Group.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, the Government are committed to ensuring that the Midlands, Yorkshire and the north-east realise the benefits of high-speed services. The integrated rail plan will set out the best way of delivering the eastern leg of HS2 phase 2b and will consider how to sequence its delivery to ensure that benefits are realised sooner and that it is integrated with other major schemes such as Northern Powerhouse Rail and Midlands Engine Rail.

[Lord Ravensdale (CB) [V]]

I thank the Minister for her reply. Only the full HS2 eastern leg and Midlands Engine Rail—including the developments from regeneration around the HS2 East Midlands hub at Toton—would deliver the connectivity and ambition needed to revive the Midlands economy post Covid. Does the Minister agree that the HS2 East Midlands hub should remain at Toton? The scale of development at Toton, creating 84,000 jobs and adding £4.8 billion to the value of the regional economy, will be key to levelling up the Midlands region after years of underinvestment.

[Baroness Vere of Norbiton (Con)]

My Lords, we have been very impressed by the scale of the regeneration plans for the proposed HS2 station at Toton. In the IRP it is very important that we consider regeneration and economic impacts on local areas, as well as how to create the right kind of rail network.

Trains: East Midlands

Lord Ravensdale Excerpts

Monday 19th October 2020 Lords Chamber

[Baroness Vere of Norbiton (Con)]

The integrated rail plan announced in February 2020 will look at the delivery of high-speed rail alongside all the other rail enhancements across the Midlands, including the Midlands rail hub. Network Rail is already developing work in this area, including connectivity improvements between Birmingham and Nottingham.

[Lord Ravensdale (CB)]

My Lords, I declare my interest as co-chair of the Midlands Engine All-Party Parliamentary Group. Rail is playing a vital role in levelling up the Midlands and capitalising regional developments. A dedicated ministerial champion to drive this key programme forward within government would be hugely beneficial. Is that something that the Government will consider?

[Baroness Vere of Norbiton (Con)]

The Government take their relationship with Midlands Engine and Midlands Connect extremely seriously, and I have had a number of meetings with them. On transport for the east Midlands, the Transport Secretary, Grant Shapps, announced on 3 September a new collaborative agreement between local leaders in the east Midlands and the department. We have created two new posts within the department specifically for the east Midlands to provide a more influential role when it comes to rail service enhancement decisions.