British Bioethanol Industry

Phil Wilson Excerpts

Wednesday 16th January 2019 Westminster Hall

[Nic Dakin]

I know.

[Phil Wilson (Sedgefield) (Lab)]

I congratulate my hon. Friend on securing this debate, which is really important for Teesside and the south Durham area. I want to raise an issue about farming. The National Farmers Union has put out a report on the importance of bioethanol. My constituency covers 150 square miles and is an agricultural area of County Durham. Does my hon. Friend understand what the NFU has briefed on the implications of this for climate change? It could lead to 700,000 cars being taken off the road. We require an infrastructure that can secure that, especially in the agriculture industry, where we can grow the appropriate crops for this kind of industry to prosper. We are missing an opportunity should we not invest in it.

[Nic Dakin]

My hon. Friend makes the point very well and begins to answer the question from the hon. Member for Henley (John Howell) about the 700,000 cars that would be taken off the road if E10 were introduced, and on the impact on both air quality and carbon reduction. The bioethanol industry makes an important contribution to farming across the country.

In 2005, the Labour Government gave a very clear message to investors that they would support a substantial growth in demand for renewable fuels, announcing that 5% of petrol sold in the UK would come from renewable sources by 2010. The subsequent coalition and Conservative Governments retained these commitments. On the back of that, large scale investments of over £1 billion were made to ensure that the UK could produce high-quality and sustainable bioethanol to meet forecast demand. During the following decade the Government reduced target levels for renewable biofuels while addressing questions on the sustainability of biofuels. The installed capacity, which was put in place to meet the Government forecast of demand, was substantially higher than demand. Producers have suffered regular and sustained losses, which have led to recent plant closures. Higher demand has not materialised, because at present only E5 petrol with a 5% blend of bioethanol is available at British petrol stations, which is insufficient to support a viable British bioethanol industry as it currently exists.

There have been signals from the Department for Transport that suggested that E10 would be introduced imminently, giving the sector further false hope. The Department’s transport energy taskforce recommended lifting the blend level and reintroducing E10 in 2020. The industry interpreted that as meaning that the Government were fully behind it. Nearly four years on, the Government have still to act on that recommendation.

The Minister’s Department issued a consultation and call for evidence on E10 in June last year. The consultation closed in September, but the Department has yet to publish its response to the submissions. Unfortunately, the consultation did not propose to mandate the introduction of E10. Instead, it proposed the introduction of a protection grade requirement to ensure the continued availability of E5 petrol, representing 95% of all petrol sold today. If implemented, that may be a disincentive to move to E10.