UK Decarbonisation and Carbon Capture and Storage

Philip Boswell Excerpts

Tuesday 24th January 2017 Westminster Hall

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

I beg to move,

That this House has considered UK decarbonisation and carbon capture and storage.

It is an honour to serve under your chairmanship, Mr Betts, and to have secured this debate. First, I declare an interest. Prior to coming to this place, I was Shell’s contract lead on the carbon capture and storage project at Peterhead. I moved the project from its previous format in Longannet. Further to that, I was on the CCS parliamentary advisory group working under Lord Oxburgh. It reported to the Secretary of State for Business, Energy and Industrial Strategy in September last year with the report, “Lowest Cost Decarbonisation for the UK: The Critical Role of CCS”. I therefore have great interest in the subject, and I commend all Members who have come forward to speak in the debate.

It is prudent to consider, at least summarily, the background against which the debate has been brought to the House. Since successfully winning a narrow majority, the Conservative Government have been rapidly drawing back from the previous coalition Government’s much-lauded green policies. Tony Juniper described it in his article in The Guardian on 24 July 2015 as

“an anti-environment ideology based on the view that ecological goals interfere with the market, increase costs and are against the interests of people.”

The cancellation of the ring-fenced £1 billion funding for the carbon capture and storage competition on 25 November 2015 is just one of a succession of cancellations of green policy initiatives and renewable programmes. Those cancellations include scrapping support for onshore wind; axing solar subsidies; removing the guaranteed level of renewables obligation subsidy for biomass; killing the flagship green homes scheme; privatising the green investment bank, which my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) will discuss tomorrow; removing incentives to buy greener cars; abandoning the plan for zero-carbon homes; a U-turn to allow fracking on sites of special scientific interest; dropping the green targets; and—this is what triggered the CCS parliamentary advisory group’s report and, subsequently, this debate—scrapping the ring-fenced £1 billion of funding for the carbon capture and storage competition in November 2015.

With so much backtracking on green and renewable energy initiatives, the scrapping of that funding may not have been a shock to everyone. I forecasted it, but the industry, which was four years into the £1 billion competition, was shocked. Quite honestly, it virtually wiped out the industry in the UK in one fell swoop. Dr Luke Warren, chief executive of the Carbon Capture & Storage Association, said that the decision was

“just incredible. Only six months ago the government’s manifesto committed £1bn of funding for CCS…Moving the goalposts just at the time when a four-year competition is about to conclude is an appalling way to do business.”

What does that do for investor confidence? The litany of cancelled, diluted and abandoned renewable and green initiatives, as well as those within the energy industry as a whole, have virtually destroyed investor confidence in the UK energy sector. The third report of the 2015-16 Session by the Energy and Climate Change Committee, “Investor confidence in the UK energy sector”, was published on 23 February 2016. The Committee is chaired by my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil), and the report identified six factors that combined to damage investor confidence in the UK. The fourth was:

“Policy inconsistency and contradictory approaches have sent mixed messages to the investment community”.

The report goes on to cite three specific examples, of which the third is

“emphasising the important role of gas while scrapping support for carbon capture and storage.”

Earlier in the same month, the same Committee released a report, “Future of carbon capture and storage in the UK”, which opened with the warning:

“Meeting the UK’s climate change commitments will be challenging if we do not apply carbon capture and storage (CCS) to new gas-fired power stations and to our energy intensive industries.”

It goes on to state that alternatives to CCS are likely to cost the UK more in the future to meet legally binding climate change targets as set out in the Climate Change Act 2008. The report went on to criticise the Government’s focus on investment in shale gas exploration and quoted the then Secretary of State for Energy and Climate Change as saying:

“In the next 10 years, it’s imperative that we get new gas-fired power stations built.”

The report concluded that

“the manner in which the carbon capture and storage competition was cancelled, weeks before the final bids were to be submitted and without any prior indication given to the relevant parties, was both disappointing and damaging to the relationship between Government and industry.”

There will be positive news for the Government on that later in my speech.

[Alex Cunningham (Stockton North) (Lab)]

I congratulate the hon. Gentleman on securing the debate. The National Audit Office said that CCS is still proving costly. The Treasury pulled the funding away before there was an opportunity to prove whether or not it was going to be too costly. CCS would provide such a major boost to industries such as those on Teesside, which include cement, steel and fertilisers. Does he agree that it is about time the Government re-engage? They are seen as disengaged at the moment.

[Philip Boswell]

I completely agree with the hon. Gentleman. There are signs that the Government will be considering that. I look to the hon. Member for Waveney (Peter Aldous) and the Minister to confirm that they will consider that in their strategies. The hon. Member for Stockton North (Alex Cunningham) is absolutely right about investment in a key industry. When I was in the project in Peterhead, the technology was basic. We were capturing 90% of the carbon. With advances in technology, we will increase that, and with economies of scale and improved technologies, it will be cheaper. While the report understands the difficult balancing act that the Government face with public expenditure, the delay in bringing forward any plans to implement CCS in the UK while proceeding with fracking means we will not remain on the lowest-cost path to our statutory decarbonisation target.

What of forward planning? On 26 February 2016 in an interview in Utility Week, the chief executive of the Committee on Climate Change, Matthew Bell stated:

“We’ve been very clear that, with the 2050 target in mind, it is much less expensive to meet if we’re able to develop successfully CCS. The government needs to come up with a very credible plan on how it’s going to push forward with CCS.”

Bell says that, without such a plan, that investment in the power sector, at least on the more conventional generation front, could suffer. Gas is being pushed by the Government as the bridging fuel in the transition towards a low-carbon economy, although no new combined-cycle gas turbine power stations have been built in the UK in the past six years.

Acknowledging what is widely expected to happen as coal-fired power stations leave the energy system, Bell said:

“Between now and the early 2030s, gas could have an increasing and significant role”.

He also said:

“However, from some point in the 2030s, if you’re going to hit the 80 per cent gas target and don’t have CCS, then gas has to be virtually off the system…That would imply that during the course of the 2030s gas has to play a declining role – but there is a big ‘if’ there as that depends on CCS.”

--- Later in debate ---

[Mr Clive Betts (in the Chair)]

The sitting is resumed and the debate can continue to until 4.10 pm.

[Philip Boswell]

Thank you, Mr Betts. I will continue with my quotation from Matthew Bell:

“We have a 15 to 20-year time horizon with reasonable certainty for the role of gas, then we have an uncertain period—is that enough for investors to decide to go ahead with their projects? There is a way of clarifying that uncertainty, and that is for the government to be clear on CCS.”

There is a consensus from watchdogs and experts alike. They agree that the Government have the opportunity to get this right. Getting it right, including carbon capture and storage, will be more economical for the UK in achieving our climate change targets, while simultaneously creating CCS as a leading, technologically advanced industry within the UK.

What of the costs of meeting our climate change commitments without CCS? The National Audit Office’s report of 20 January 2017, “Carbon capture and storage: the second competition for government support”, found that carbon capture and storage “formed an important part” of the Department for Business, Energy and Industrial Strategy’s role in reducing carbon dioxide emissions. The report goes on to state:

“Given its potential to decarbonise different sectors, many stakeholders still regard CCS as being critically important to the UK achieving its decarbonisation target. It is currently inconceivable that CCS projects will be developed without government support.”

That support would enable investment in CCS, creating a large-scale demonstration of CCS technical and commercial viability, and leading to further-improved CCS schemes in the UK and the development of CCS as a successful industry. Although the report is constrained by the very specific NAO brief, which was to assess how the Department ran the second competition before its cancellation, it is none the less unequivocal in its support for CCS as the least-cost route to decarbonisation.

What of the most detailed report focused on the determination of whether CCS offers the solution of lowest-cost decarbonisation? I am referring to “Lowest Cost Decarbonisation for the UK: The Critical Role of CCS”, which is cited as Oxburgh 2016, a report from the parliamentary advisory group on carbon capture and storage to the Secretary of State for Business, Energy and Industrial Strategy. The report was requested by the then Secretary of State for Energy and Climate Change, the right hon. Member for Hastings and Rye (Amber Rudd). Its terms of reference were to assess the potential contribution of CCS to cost-effective UK decarbonisation and to recommend accordingly to the Secretary of State by the end of summer 2016.

The report was delivered by Lord Oxburgh and his team in September 2016. The group comprised some of the most qualified and experienced representatives of politics, industry and academia. They did not carry out primary research but instead, given the substantial volume of work already published on the subject, focused on synthesising experience and knowledge into an optimum recommendation. They also considered walking away from CCS as an option.

The report found six core recommendations that are worth repeating in full:

“1. Establish a CCS Delivery Company…A newly formed and initially state-owned company tasked with delivering full-chain CCS for power at strategic hubs around the UK at or below £85/MWh on a baseload CfD equivalent basis. Formed of two linked but separately regulated companies: ‘PowerCo’ to deliver the power stations and ‘T&SCo’ to deliver the transport and storage infrastructure, the CCSDC will need c.£200-300m of funding over the coming 4-5 years.

2. Establish a system of economic regulation for CCS in the UK…The government will establish a system of economic regulation for CCS in the UK which is based on a regulated return approach. This will draw heavily on existing regulatory structures in the energy system and hence include: a CCS Power Contract based on the existing CfD or capacity contract to incentivise CCS for power…

3. Incentivise industrial CCS through Industrial Capture Contracts…The Industrial Capture Contract, will be funded by the UK government and will remunerate industry for capture and storage of their CO₂. It will be a regulated contract which will have a higher price in the early period in order to deliver capital repayment in a timescale consistent with industry horizons…

4. Establish a Heat Transformation Group…The Heat Transformation Group will assess the least cost route to the decarbonisation of heat in the UK (comparing electricity and hydrogen) and complete the work needed to assess the chosen approach in detail. The HTG has a likely funding need of £70-90m.

5. Establish a CCS Certificate System”—

this is completely self-explanatory—

“Government will implement a CCS Certificate System for the certification of captured and stored CO<sub>2.

6. Establish a CCS Obligation System…Government will also implement a CCS Obligation from the late 2020s as a means of giving a long-term trajectory to the fossil fuel and CCS industries. This will put an obligation on fossil fuel suppliers to the UK to sequester a growing percentage of the CO2 associated with that supply.”

Climate change bodies, politicians and industry alike almost all agree that CCS is the optimum low-cost option for decarbonising the UK, but it is generally accepted that only Government intervention will stimulate it in the UK. I therefore ask the Minister please to consider carefully carbon capture and storage as part of the Government’s new, hands-on, interventionist industrial strategy for Britain.

What is the way forward? The way to a greener industrial future and lowest-cost decarbonisation for the UK without doubt includes carbon capture and storage. The proven technology continues to improve and we should not be frightened to embrace the new technologies that continue to spring up around CCS, such as Toshiba’s new 25-MW-gross electric turbine, the headline for which reads:

“Toshiba Ships Turbine for World’s First Direct-Fired Supercritical Oxy-Combustion CO2 Power Cycle Demonstration Plant to U.S.”.

That supercritical CO2 power-cycle system achieves the same level of generating efficiency as a combined-cycle power plant. It separates and collects CO2 at high pressure, eliminating the need for separate carbon capture equipment or processes, and secures full CO2 capture—I repeat: full CO2 capture—without any increase in the cost of electricity, using supercritical CO2 as a working fluid to generate low-cost electricity while eliminating emissions of nitrogen oxides and other pollutants. We must embrace such technology or risk falling further behind or completely missing out on a unique opportunity.

Where should we develop the first CCS project? We already have some shovel-ready projects.</sub>

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate the hon. Gentleman on securing the debate. He is making some good points. Has he considered the impact that leaving the European Union might have on Britain’s ability to deliver on its climate change obligations? Previously, we looked towards a European-wide solution at the Paris climate change summit, so what more do we now need to do in Britain to meet those carbon-reduction obligations?

[Philip Boswell]

The hon. Gentleman makes a good point. Now that we have chosen this path for the country, I hope that Brexiteers and remainers alike will make the best fist of it and work collectively with our European neighbours for the best, but he is right that we should do more in Britain and should focus on that. His point is well made.

[Alex Cunningham]

Further to the previous intervention, it is all the more important that, post-EU membership, we ensure we get our emissions-trading regime correct to protect the industries I mentioned in my earlier intervention.

[Philip Boswell]

Again, I agree completely with the hon. Gentleman. Given the coal mining in Europe for power generation and having to deal with climate change, we certainly ought to look at that.

Shortly before the demise of the Department of Energy and Climate Change—it is now the Department for Business, Energy and Industrial Strategy—it commissioned a study from the Energy Technologies Institute to examine where CO₂ clusters and commercially viable storage could be developed around the UK by 2030. The study identified five locations. Only one is deliverable right now, and I will spend a few moments describing how that so-called Acorn project could grow into a mighty oak tree of carbon capture, transport and storage.

To get a CO₂ takeaway network to operate, we need to gather CO₂ from multiple sources onshore and to transport it to the coast through a pipe and then through an offshore pipe to its carbon storage destination. St Fergus in north-east Scotland is the offshore oil industry equivalent of Clapham Junction. Many of the gathering pipes from the North sea bring oil and gas to landfall at St Fergus, which has a huge amount of pipeline infrastructure and processing equipment available. With the decline of North sea activity in certain fields, some of that equipment is no longer required.

Specifically, pipelines from St Fergus to the Atlantic and Goldeneye gas fields have now ceased hydrocarbons transport and are in fact scheduled to enter a decommissioning process. Onshore, three facilities service different offshore pipeline networks and produce about 400,000 tonnes per year of carbon dioxide, which at the moment is vented into the atmosphere. The Acorn project aims to capture and store that CO₂. The SAGE—Scottish Area Gas Evacuation—plant is also in St Fergus but, given the time, I will move on to allow other Members the opportunity to speak.

What of the Government’s new industrial strategy? My colleague the hon. Member for Waveney will discuss that in more detail, so I will touch on it only lightly. Publication this month of the initial “Building our Industrial Strategy” Green Paper is the first step towards introducing a new, engaged Government-industry relationship, which is to be commended. The paper invites engagement and comment, and is most welcome. I urge the Minister to include CCS in the final strategy, and ask him to give assurances today that CCS will be considered carefully and implemented as one of the many steps into Britain’s new industrial future, which looks to both industrial development and a greener, cleaner industrial future for our children and our children’s children.

The summary of the key findings of the CCS parliamentary advisory group’s report states:

“CCS is essential for lowest cost decarbonisation

1. This report addresses the policy disconnect that arises between the previous Government’s cancellation of the…CCS …competition on grounds of cost and the advice it received from a number of independent policy bodies that CCS was an essential technology for least cost decarbonisation of the UK economy to meet international agreements (most recently Paris 2015).

2. The Committee on Climate Change…recently reported the additional costs of inaction on CCS for UK consumers to be £1-2bn per year in the 2020s, rising to £4-5bn per year in the 2040s…The group agrees carbon capture and storage is an essential component in delivering lowest cost decarbonisation across the whole UK economy.

CCS works and can be deployed quickly at scale…Current CCS technology and its supply chain are fit for purpose”—

as I said, CCS works are shovel-ready—

“UK action on CCS now will deliver lowest cost to the consumer. There is no justification for delay. Heavy costs will be imposed on current and future UK consumers by a continued failure to enact an effective CCS policy…Ample, safe and secure CO₂ storage capacity is available offshore in the rocks deep beneath UK territorial waters and this represents the least cost form of storage at the scale required…CO₂ re-use, such as enhanced oil recovery and the production of materials such as building products, already exists and should continue to be encouraged,”

but it will not be able to deal with the huge volume required to make a difference in meeting our climate change targets. The summary continues:

“The lowest cost CO₂ storage solution for the UK at the scale required will be offshore geological storage in UK territorial waters. There is no reason to delay…

CCS in the power sector has an essential enabling role.

CCS has direct or indirect implications for the decarbonisation of all four of the major fossil fuel consuming sectors of the UK economy—industry, power, transport and heating. They need to be considered together so that synergies of a common infrastructure can be exploited…

With some 200TWh/year of new clean power generation needed in the UK system in the 2020s fossil fuels with CCS will play an important role as a cost competitive and potentially flexible power generation technology.

There is a widespread view that CCS has to be expensive. On the contrary, the high costs revealed by the earlier UK approaches reflected the design of these competitions, rather than the underlying costs of CCS itself.”

The poor design in the second CCS competition

“led to the lack of true competition and the imposition of risks on the private sector that it cannot take at reasonable cost for early full-chain”

development. The summary also states:

“Previous third party analysis by the CCS Cost Reduction Taskforce and for the Committee on Climate Change as well as analysis performed for this report show full-chain CCS costs at c.£85/MWh under the right circumstances. This report concludes that, under the right conditions as set out in this report, even the first CCS projects can compete on price with other forms of clean electricity.

To ensure that least cost CCS is developed when earlier approaches have foundered a CCS Delivery Company…should be established that will initially be government owned but could subsequently be privatised”

if the Government so wish. The summary continues:

“This company will have the responsibility of managing ‘full-chain’ risk and will be responsible for the progressive development of infrastructure focused on industrial hubs to which power stations and other emitters could deliver CO₂ which, for a fee, will be pumped to appropriate storage.

The CCSDC will comprise two companies: ‘PowerCo’ tasked with delivering the anchor power projects at CCS hubs and ‘T&SCo’ tasked with delivering transport and storage infrastructure for all sources of CO₂ at such hubs.”

It is clear that we must think and act more holistically about our energy needs and uses, and the inevitable effects of our behaviour on our planet. I hereby recommend that CCS be included in the Government’s new industrial strategy for the benefit of everyone in the UK now and in the future, as our children and our children’s children will be presented with our bill should we get this wrong again.

[Several hon. Members rose—]

--- Later in debate ---

[Jim Shannon]

My hon. Friend may regret it, but it will not diminish our friendship in any way whatever. It is good to have a broad church of opinion within our party.

I will pose some questions because it is important to do so. Environmental issues are of great importance, so it is essential that our strategy is effective. I say to the Minister that I am not sure that we have managed to achieve all we could or should thus far. That is the question many have posed, including the hon. Member for Coatbridge, Chryston and Bellshill during his introduction.

It is opportune that we are having the debate on the back of the industrial strategy Green Paper announced by the Department for Business, Energy and Industrial Strategy yesterday. Many believe that the Department has not achieved value for money for its £100 million spend on the second competition for Government financial support for carbon capture and storage. Other hon. Members have said that there must be an investment to get a return, and that the return will justify the investment.

It is my understanding that CCS is a process to avoid the release of carbon dioxide into the atmosphere, and that it has the potential to help to meet the UK’s target for a reduction of CO₂ emissions in both the power and industrial sectors, which is commendable. We have pledged to cut 1991-level emissions by 57% by 2030. While that is a great goal, how will we achieve it? Hon. Members have outlined potential job creation and the opportunities that will come if it is done in the right way. To achieve the goal is most certainly a challenge, given the untried nature of the technology.

[Philip Boswell]

I point out to the hon. Gentleman that the technology is truly tried and tested. The curious scheme in Northern Ireland aside, I would urge both hon. Members from Northern Ireland, who are my friends, to read the Oxburgh report and contrast the less than £85 per KWh that is achievable under this system with the Hinkley Point strike price of £92.50. Furthermore, the networks already exist. That is the attraction of having an existing infrastructure.

[Jim Shannon]

I will respond to the hon. Gentleman’s intervention during my comments. The future costs for the duration of the CCS project are unknown, and perhaps the figures do not add up on all of the lines.

Two projects that were shortlisted for the CCS process both failed to meet the proposal goals. The work done centrally by the Department in sustaining negotiations for the second competition for the project with its preferred bidders must be noted—a process is in place. The hon. Member for Coatbridge, Chryston and Bellshill has clearly outlined some of the evidence, and I will pose some questions on that. I can clearly say that I support the principle of what we are trying to achieve, but I wonder whether it can be achieved by that process. There are lessons to be learned, and hopefully valuable commercial knowledge and technical understanding of how to deploy the competition projects will have been gained, as he said. If we have that information, let us see how we can use it to further the project.

There are currently no examples of large-scale CCS projects in the UK, and only 16 operational projects worldwide. BEIS should maximize its expertise for future CCS strategies and put into practice the lessons it has learned—in other words, the evidence should be used for the betterment of delivering such projects. If and when CCS projects are self-sustaining and economically viable, we will see clean electricity from renewable sources, which we wish to see and are committed to trying to achieve. However, the sticking point is in the phrase “if and when”, meaning we could achieve those things “if and when” the Government and BEIS find a happy medium and the in-between. Hon. Members are often tasked with finding a balanced in-between or the correct way forward.

The substantial future benefit of the CCS process is to avoid the release of CO₂, as several hon. Members have indicated. However, it is clear that there are serious problems and critical issues with such projects that we cannot ignore. As I have discussed, there are no large-scale examples of long-term storage projects in the UK, despite a series of UK Government and EU initiatives aimed at incentivising their development. It has been argued that CCS technology is too expensive to be commercially viable for private developers without Government support in the shape of a strike price. Government involvement is critical in taking this forward.

I am aware of the work carried out by the parliamentary advisory group on carbon capture and storage, which found that good design could make CCS affordable. However, I have reservations about the cost of CCS competitions to the taxpayer.

--- Later in debate ---

[Philip Boswell]

I am delighted to see such excellent and almost comprehensive cross-party support for the inclusion of CCS in the Government’s commendable industrial strategy doctrine. Clearly, we are mostly on the same page, and I am sure the application from the hon. Member for East Antrim (Sammy Wilson) to work for the Trump Administration will be successful.

Although the Minister understands that the cost of developing CCS is an existing issue, I am sure he recognises that the cost of not developing and including it will be greater—that is well articulated in the report. None the less, he has undertaken to keep to climate change commitments, to publish the Government plan in quarter one of 2017, to publish details about decarbonisation across all sectors including CCS, and to consider the Toshiba option, which is to be highly commended. I very much look forward to developments in the near future.

I am delighted to see Lord Oxburgh in attendance and thank all hon. Members for their contributions. Finally, I thank you, Mr Hollobone, and all the staff who enabled the debate to take place.

Question put and agreed to.

Resolved,

That this House has considered UK decarbonisation and carbon capture and storage.

Oral Answers to Questions

Philip Boswell Excerpts

Tuesday 13th December 2016 Commons Chamber

[Margot James]

We have an ongoing dialogue with Ofgem on a number of issues, but apropos the cost of supporting investment in low-carbon technologies, this is expected to increase, but so too are the savings from energy efficiency policies. This means that by 2020 household energy bills are still estimated to be lower on average than they would have been in the absence of those green policies.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

11. What recent steps he has taken to develop confidence in the advanced manufacturing sector.

[The Minister for Climate Change and Industry (Mr Nick Hurd)]

We are working to make the UK even more competitive in advanced manufacturing by cutting corporation tax and red tape and by increasing our support for the research and innovation that is crucial to success. We are doing that not least through our £300 million investment in the high-value manufacturing catapult centre.

[Philip Boswell]

Given the potential increase in tariffs due to Brexit, how does the Minister plan to ensure that high-value manufacturing does not deteriorate?

[Mr Hurd]

High-value manufacturing is extremely important to our future—it presents many opportunities but also presents risks that we have to manage—and so will be an important part of our industrial strategy. On the broader concerns about tariffs, the hon. Gentleman has heard it often enough, so he should start believing it: the Government are listening carefully, as I witnessed yesterday, to manufacturing and other sectors about their priorities and concerns as we shape and finalise our negotiating position.

Corporate Governance

Philip Boswell Excerpts

1st reading: House of Commons
Tuesday 29th November 2016 Commons Chamber

[Greg Clark]

I completely agree with my hon. Friend. The times when we had very high levels of shareholder participation were ones when there was an enhanced understanding of the importance and role of business. I will take his recommendation seriously and take it forward.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

I urge the Minister to consider that corporate governance leans too much in support of shareholders and dividend, and the protection thereof. The focus of any good corporate governance initiative should be: supporting workers’ rights; driving towards a fairer pay distribution, an issue much covered by colleagues here, and away from inflated corporate management remuneration; and the reinvesting of any funding in research and development, and good protective governance for employees and management, as well as job creation and job security.

[Greg Clark]

When the hon. Gentleman reads the Green Paper, I think he will welcome our proposals, which address some of the points he is making to ensure that the pay of the top management is aligned with the long-term success of the company, and to require a greater connection between the workforce and the management, as well as customers and other groups. That is a step in the right direction, and as my colleagues have pointed out, business has warmly welcomed it. This is a timely and useful upgrade in the standard of corporate governance in this country.

Paris Agreement on Climate Change

Philip Boswell Excerpts

Wednesday 7th September 2016 Commons Chamber

[David T. C. Davies]

My hon. Friend is making the assumption that carbon dioxide is some sort of pollutant. It is not. Sulphur dioxide is a pollutant, and we have done wonderful things in getting rid of that. Carbon dioxide is actually the elixir of life, and a small increase in carbon dioxide has a very beneficial effect on the ability of farmers to grow crops. So I do not accept the premise of my hon. Friend’s question, which is that CO₂ is a naturally bad thing.

I would of course accept that we should concentrate on making sure our air quality and environment are good. I have been a surfer for 20 years—or I was until I had children, anyway—and I strongly believe in the environment. I was a member of the environmental group Surfers Against Sewage for years. I am not some kind of lunatic who wants to tear the environment apart and build everywhere, but I do have concerns about policies that are going to be enormously costly and have an impact on businesses, including some in my area.

I suggest that Ministers should ask themselves whether they actually believe what the NGOs that call on them to adopt certain policies are saying. A good point was made earlier about nuclear power. I believe it is absolutely safe. It is very interesting that whenever anyone proposes a nuclear power station somewhere, some of the biggest supporters are the people who live in that area. In Anglesey, or Ynys Môn, the Wylfa site is being supported by Members of Parliament right across the political spectrum, including those of Plaid Cymru, who normally try and paint themselves, literally and figuratively, as the most green party of them all. When it comes to nuclear jobs, Plaid Cymru is very enthusiastic about nuclear power and I commend it for that. It is right to be so. Let us contrast that with what happens when people want to put up wind farms. I know of Liberal Democrat politicians in Wales who will bang the drum for wind farms at every opportunity until someone suggests that one should be constructed in their own constituency, at which point they come up with all sorts of reasons why that should not happen.

One of my concerns is that green groups—and perhaps the hon. Member for Brent North (Barry Gardiner)—say that global warming is the greatest threat to mankind but then oppose proposals for a nuclear power station, which could resolve some of our energy problems without creating any extra carbon dioxide. The same attitude has been shown repeatedly by green groups towards the Severn tidal barrage. I do not know whether that project would stack up economically, but from an environmental point of view it has the capacity to produce about 5% of the UK’s electricity without creating carbon dioxide emissions.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

One word: Sellafield.

[David T. C. Davies]

The hon. Gentleman will no doubt take the opportunity to discuss that with his close colleagues in the Welsh national party, Plaid Cymru, who are incredibly enthusiastic about the prospect of a nuclear power station in a constituency that it represents in the Welsh Assembly. No doubt that will be an interesting discussion.

My concern is not so much that we are adopting renewable energy schemes, because I understand the arguments about the need for energy security and diversity, but if we go too far, we are going to end up adopting energy generation systems that will cost a lot more money. I have had a lot of emails recently from environmental groups complaining about Hinkley, saying, “Mr Davies, it costs too much. Solar power and wind power would be much cheaper than Hinkley.” I am tempted to suggest that the Secretary of State should have a look at those emails and, on this basis, perhaps cut the renewables subsidies further and bring them down below the £92.50 per MWh that we are promising for Hinkley, given that we are paying up to £150 for some offshore wind farms.

I also get frustrated when I receive emails from Friends of the Earth, Greenpeace and all these other environmental groups complaining about fuel poverty, because fuel poverty will get worse if we continue to have to pay more for our electricity because we are adopting schemes that require strike prices. Similarly, I cannot understand why Opposition Members and non-governmental organisations will not support fracking, when it is quite clear that if we get rid of our coal-fired power stations and instead use gas that is produced in this country, we can create jobs and cut carbon dioxide emissions. That is surely something that they should support.

I do not want to be a thorn in the side of Ministers. I understand many of the concerns that people are expressing, and I hope that Ministers will put the pertinent questions to the experts. I also hope that they will remember at all times that it is rising tempers about increased energy prices that have caused companies such as Tata to consider closing down in Wales. That is the big cause for concern, rather than rising temperatures, which mankind has coped with quite happily for thousands of years.

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[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

We in the SNP find ourselves in full agreement with the hon. Member for Brent North (Barry Gardiner), who was both comprehensive and passionate; he and my hon. Friend the Member for Aberdeen South (Callum McCaig), who is no longer in his place, are quite right to be so, given the critical nature of this issue.

Confidence in the UK Government’s commitment to tackling climate change is on the wane. They have rolled back almost every green policy, and in the previous Prime Minister’s strong language on the subject lies the truth of it. The rolling back of policies that supported energy investment and domestic energy efficiency is more than disappointing; it is irresponsible.

The Minister spoke of how business was very much behind him. I can forgive him for that misapprehension, because he is new to the job—I sincerely wish him all the very best in his new role—but for quite some time, investment in the UK, particularly in energy, has been undermined by the almost continuous moving of the legislative goalposts by the Government. Backtracking on issues such as privatisation of the Green Investment Bank, the withdrawal of the renewables obligation element for onshore wind and the cut to solar subsidies have been well covered in the House, particularly by the hon. Member for Southampton, Test (Dr Whitehead), who provided us with a comprehensive list; it does, indeed, go on.

The aforementioned reversals and the withdrawal by the UK Government of the £1 billion carbon capture and storage competition with no prior warning has left a hugely damaging legacy for investment incentive and consumer confidence in the UK. On the plus side, I am delighted to say that the carbon capture and storage advisory group will report its findings this coming Monday 12 September, as requested by the former Secretary of State for Energy and Climate Change. The CCS report is a cross-party, pragmatic solution that includes industry, academia and parliamentarian input from both Houses, and I urge the Government to implement its good-value recommendations, which are fully supported by the Conservative hon. Member for Waveney (Peter Aldous).

The recent Brexit vote should not become a flippant reference. This is the UK leaving the European Union—the biggest single market in the world. It is a frightening prospect, hence why many Brexiteers have simply run away. They are like the proverbial dog that has finally caught the bus that it was chasing and now has no idea what to do with it; in fact, they cannot even define Brexit. This grave uncertainty has plunged the UK’s energy sector into yet further uncertainty. As such, the SNP calls on the UK Government to halt their damaging programme of austerity and inject the economy with the investment necessary to stimulate growth and create a healthy environment for investors and consumers alike.

[Patrick Grady (Glasgow North) (SNP)]

The behaviour of the UK Government stands in contrast with the ambitious programme for government set out by the Scottish Government yesterday, which will inject resources into the economy to help it to withstand the trials of Brexit. The Scottish Government are also leading the way in tackling climate change, with one of the most ambitious climate change Acts anywhere in the world to tackle carbon emissions. Does my hon. Friend share my concern that all the UK Government’s actions that he is outlining are undermining our ability to meet those targets?

[Philip Boswell]

I will come on later to some of the points that my hon. Friend has raised, but he has encapsulated them perfectly.

I ask the Minister: will his Government reverse austerity and make the necessary investment? As my hon. Friend the Member for Aberdeen South and, more recently, my hon. Friend the Member for Glasgow North (Patrick Grady), have illustrated perfectly, Scotland is a world leader in tackling climate change, with ambitious statutory targets and strong progress to date. We must work together to tackle the issue, and it is most encouraging that all contributors to this debate agree on that. We will support the Minister in any way we can to find a collegiate solution to our requirements in this country.

Scotland has made a leading contribution to the EU-wide effort to reduce greenhouse gas emissions. Considering that Scotland is the biggest EU oil producer, the second biggest EU gas producer and has about 25% of the EU’s renewables potential, we would of course be extremely well placed to do so were the decision only ours to make.

I agree with the hon. Member for Brent North in criticising this Government’s approach to energy in the UK—their almost complete reliance on the rash dash for gas, fracking and nuclear. While I must applaud the current Prime Minister for pausing to reconsider Hinkley Point C, I condemn her party for the poor decision in the first place.

The Minister touched on the domestic and European processes for ratification, but how difficult is the process? The hon. Member for Southampton, Test, also touched on the process, but what is it? To put it simply, there are two separate processes for the ratification of the agreement: one for the European Union, and one for the UK Government. For the UK, an EU treaty requiring ratification is presented to Parliament as a Command Paper and approved in secondary legislation. A draft Order in Council is laid before Parliament, which may be debated and approved in both Houses under the affirmative procedure. This process seems straightforward enough, so let us get on with it.

--- Later in debate ---

[Nia Griffith]

That sounds like a very exciting project indeed. The whole point is not to think about the cost of an initial project, but the huge impact of rolling it out: reducing emissions, finding good markets for our components industries and ensuring we are up there as a world-first. There would be huge kudos for the Government if they did that.

[Philip Boswell]

I had the good fortune to speak in the Swansea tidal lagoon debate. I am sure the hon. Lady agrees that the ultimate aim is for a chain of tidal lagoons that could power all of Wales and meet up to 8% of the UK’s energy needs. Does she agree that that would be an investment well worth making?

[Nia Griffith]

Absolutely—indeed it would.

Sadly, the Government’s record has not been very good to date. The green deal was a complete fiasco. It proved to be a very unattractive deal, as the figures show, with only 2.7% of those who had had the assessment done actually taking out the investment in energy-efficiency measures. Indeed, many of us have had constituents who have experienced real difficulties with the scheme. It is no wonder that the National Audit Office was scathing in its assessment, pointing out what poor value for money the scheme was. In spite of warnings from the Labour Benches about the scheme’s faults, the Government did not do anything to improve it.

The sudden ending of the scheme in itself produced problems. One constituent of mine, who was in receipt of pension credit, paid for an up-front survey. She then found she had difficulty getting a copy of that survey. After I chased it up, we got the copy but found that it was too late and the scheme was no longer up and running. She lost her money on that survey. That is an appalling situation in which to leave a pensioner in receipt of pension credit.

There is an awful lot more to do on very simple matters, such as recycling. We should be trying to ensure as many products as possible are either completely recyclable, such as steel, or biodegradable. For example, will the Government consider banning polystyrene takeaway trays, as some local authorities are already seeking to do, and asking catering businesses to use alternative, biodegradable ones?

I very much welcome the inclusion in the Department’s title the words “industrial strategy”. I very much hope the Government are really serious about developing consistent long-term policies for both manufacturing and energy. Business leaders are crying out for clarity and consistency. The Government are continually moving the goalposts, which completely reduces business confidence. We saw that in the massive job losses in the solar industry when the feed-in tariff regime was changed at short notice. To get businesses to invest in energy projects and measures to help us reduce our emissions and tackle climate change, we need long-term certainty from the Government.

As we no longer intend to remain in the EU, companies need to know exactly what the Government are going to offer them. Sadly, Ford in Bridgend has slashed its investment plans from £181 million down to £100 million, and instead of creating 700 jobs it will be creating only 500 jobs. That is really, really worrying. The Government urgently need to provide the certainty and reassurance that the UK will be a good place to invest in and that we have the right sort of policies that both favour industrial development and reduce emissions. We need to ensure we are seen as a place in which to invest. More than anything else, I urge the Government to get on with the carbon plan. It is very important that the carbon plan is a major part of their strategy, that the “industrial strategy” part of the title of the Department becomes a reality, and that we give the certainty that investors need for the future of our country.

--- Later in debate ---

[Patrick Grady]

I wholeheartedly agree with my hon. Friend. That is an example of the kind of innovation we see in small countries such as Norway, which was mentioned earlier, Malawi and Scotland. What is particularly important about the Scottish Government’s climate justice fund is that it is additional to the international development fund that they make available for mainstream international development programmes. It is encouraging that the Minister for Climate Change and Industry was formerly a Minister in the Department for International Development. I hope that will mean that there will be joined-up conversations across the Government as we take forward these important concepts.

The other matter on which I wish to reflect briefly, which I mentioned in an intervention, is the message from Pope Francis about climate justice and tackling climate change, and our own personal responsibilities to take action in our daily lives to reduce our footprint on the planet. Much of this has already been discussed in terms of where our energy comes from in the first place and clean electricity generation, but we have a responsibility to drive demand reduction through the more efficient use of electricity and by purchasing more efficient electrical appliances. We do not need to live in the stone age, but we should make much more efficient use of the energy that is generated, hopefully in a clean manner. The idea of climate justice is due to the fact that people who have contributed the least to climate change and can least afford to deal with it are experiencing the greatest impact.

[Philip Boswell]

Prime Minister Modi of India has said that his country, which has only recently been industrialised, should not be presented with a full share of the bill for carbon emissions. He said that that would be like being presented with a full bill for a meal having had only a dessert. Does my hon. Friend agree that justice should take that into consideration?

[Patrick Grady]

Yes, absolutely. We must take responsibility for our history. We live in such an industrialised country because of the extent of industrialisation that took place. Buildings in this very part of the world—even the building in which we are standing—had to be cleaned of the soot that had been generated, and those carbon emissions are having an impact today through the climate change that we are experiencing, so we absolutely have a responsibility to lead on these issues. Even in our own country, it is the people who can least afford it who are being hit the hardest. Pensioners living in fuel poverty during colder winters are finding their incomes squeezed as they try to heat their homes. Indeed, people who cannot afford air conditioning in the excessive heat of the summer, as we have seen in France, are feeling the impact. This concept works both at home and overseas. We have heard about all kinds of interventions. In my home town of Glasgow, we are introducing food waste recycling, with all of us having grey bins. It will be interesting to see how the uptake of that scheme goes; I encourage everyone to make the best of it.

The hon. Member for Wakefield (Mary Creagh) was absolutely right to say that this is one of the greatest challenges of our time. That is why there is not just a political, economic and social impetus behind tackling climate change, but a moral impetus, which is why the Government have a moral responsibility to show leadership on this issue and to ratify the Paris agreement as soon as they possibly can. This is much like the position on the Istanbul convention, which my hon. Friend the Member for Banff and Buchan (Dr Whiteford) is having to address by bringing forward a private Member’s Bill because the Government are dragging their heels so much. Again, this is another example of the Government ceding the moral high ground in global political leadership to other countries, which is quite disappointing.

I said to the Prime Minister earlier that we should mark the 50th anniversary of “Star Trek”. The fourth movie in the series has the crew going back in time to save the whales as a bit of a metaphor for the damage that our generation is causing to the planet. It is fair to say that, if we want to live long and to prosper, we really must tackle climate change.

Draft Carbon Budget Order 2016

Philip Boswell Excerpts

Monday 18th July 2016 General Committees

[Jesse Norman]

Legal advice between an attorney and a client is privileged information, so it is not the Government’s practice to publish legal advice that is given, or generally even to publish summaries of legal advice, but I am happy to take the point up and consider it, as the hon. Gentleman has raised it.

On shipping emissions, the International Maritime Organisation has talks under way at the moment. This is an international issue and not something where one can simply make decisions based on simplistic calculations of port of origin or arrival. It is entirely appropriate that the Government continue that process of participating in those negotiations with the IMO. The point is important: shipping emissions, like aviation emissions, should in the fullness of time, if proper methods of calculating an agreement can be reached, be included in the scheme because obviously there are economic impacts and, potentially, perverse incentives that occur from not doing so. The wider point is well taken.

The point about ETS credits reverts to that which I made earlier. In general there is some benefit to having credits because they confer additional flexibility on Government. It would not send a useful signal to investors to have to make changes in policy just because of marginal differences in performance, which credits could address. The position is sensible, but again the point is taken.

Finally, on the 10% gap, I would simply say that we are some way away from the policy development stage. One naturally expects—in particular in an area such as climate change and emissions control—there to be a dynamic response from the economy as these budget constraints start to get set and embed themselves. We are already seeing some of that economic behaviour and one might easily expect to see more of that to come.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

In respect of the gap that the Minister spoke of, will he perhaps look at making ground on the transport and the heating sectors, where much more can be done?

[Jesse Norman]

I have no doubt that the Government will continue to look, as part of the infrastructure planning process over the rest of this year, closely at that sector, as they will at other key contributors to carbon emissions.

Question put and agreed to.