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Biofuels

Volume 497: debated on Tuesday 13 October 2009

Motion made, and Question proposed, That this House do now adjourn.—(Ms Butler.)

Barry Gardiner (Brent, North) (Lab): There is a challenge facing the world, and it is to seal the deal on combating climate change at the UN conference on climate change meeting in Copenhagen in December. In its last report, the intergovernmental panel on climate change considered that the 2° C rise in temperature that marks dangerous climate change would be triggered by a CO2 emissions concentration level of 450 parts per million. Many of us now believe that figure to be hopelessly optimistic, and consider a concentration level of 380 ppm, or even 350 ppm, to be more in keeping with the latest science. However, for the purpose of this debate, I shall use the 450 ppm figure.

To stay within the target of 450 ppm, the world must curb its projected greenhouse gas emissions by 17 gigatonnes per annum by 2020. However, by 2050, the total emissions each year from the entire global population must be no more than 20 gigatonnes if we are to stabilise the climate within the 2° C dangerous climate margin. That is a huge mitigation challenge—a reduction of at least 47 gigatonnes from a business-as-usual scenario.

Globally, biofuels and biomass could play an important role in meeting those mitigation targets. Nationally, the UK renewable energy strategy, published earlier this year, has indicated that approximately 30 per cent. of the UK’s renewable energy target could come from bioenergy for heat and power. That could rise to 50 per cent. if biofuel for transport is included.

The target is for 15 per cent. of our energy to come from renewables by 2020, which means that in the next decade we should see the UK growing 4.5 per cent. of its heat and power. In 2006, Peter Kendall, the president of the National Farmers Union, argued that British farmers were uniquely well placed to deliver the renewable transport fuel obligation in a sustainable manner, thanks to the widespread adoption of farm assurance schemes. He said:

“Developed in a sustainable way, in the context of a wide-ranging strategy for alternative crops, biofuels offer society a win, win, solution.”

Part of the win for farmers is the £47 million subsidy that the Government provide through the rural development programme, under which payments of 40 per cent. of the actual establishment costs of energy crops are made to encourage farmers to plant for energy. However, this is where farmers need to gauge relative reward: certainly, the high price of wheat, even from lower yields on poor-quality land, has not encouraged them to switch from traditional food crops as fast as the Government would have wished. That has prompted the Government to decide to increase the planting grants from 40 per cent. to 50 per cent. of actual establishment costs in England from 2010.

But subsidy is a two-edged sword. It should be used to tackle market failure; it should not be used as market manipulation for the protection of domestic interests. Last year’s report from the World Bank entitled “Biofuels: The Promise and the Risks” highlighted the effects of the support for biofuels among different Governments around the world. It stated:

“Governments provide substantial support to biofuels so that they can compete with gasoline and conventional diesel. Such support includes consumption incentives (fuel tax reductions); production incentives (tax incentives, loan guarantees, and direct subsidy payments); and mandatory consumption requirements.”

The report said that more than 200 support measures costing around $5.5 billion to $7.3 billion a year in the United States amount to 38 to 49 cents per litre of petroleum equivalent for ethanol. It added:

“Even in Brazil, sustained government support through direct subsidies was required until recently to develop a competitive industry. Domestic producers in the European Union and the United States receive additional support through high import tariffs on ethanol.

Biofuel production has pushed up feedstock prices. The clearest example is maize, whose price rose by over 60 percent. from 2005 to 2007, largely because of the US ethanol program combined with reduced stocks in major exporting countries.”

Subsidy drives land use change, and the effects of that can be considerably more than tortilla riots in Mexico—as we have seen—and food price spikes on the world market. Land use change that replaces biodiversity with monoculture can do incalculable damage to the ecosystem, and is capable of turbo-charging climate change, ultimately resulting in greater greenhouse gas emissions rather than lesser.

Malaysia and Indonesia have seen a staggering loss of forest cover, which has been replaced by oil palm trees. Such monoculture plantations drive the loss of tropical forest biodiversity, which is not simply a problem for the orang-utans, around which such a notable campaign has been organised recently; it is a problem for the planet, as the planet loses all the ecosystem services that the forest provides, including carbon sequestration, climate regulation, soil stabilisation and watershed protection, as well as the habitat and provisioning services. When those are factored in, the price of biofuel may appear very high indeed.

The grain required to fill the tank of a Range Rover with ethanol is sufficient to feed one person in the developing world for an entire year. American ethanol from maize uses fossil fuel at every stage of its production process—from fertiliser production to tractor harvest, to processing and transportation to destination. It has been calculated that the growing of maize for ethanol uses 30 per cent. more energy than the finished fuel produces. It also leaves eroded soil and polluted waters in its wake.

Globally, the land cover under biofuel crops is projected to grow by 240 per cent. between 2005 and 2030. That has to be set against the rising demand for food crops as the planet’s population rises from 6 billion towards 9.7 billion by 2050. That is not just 50 per cent. more mouths to feed, but 50 per cent. more carbon footprints at a time when rising living standards for developing countries are seeing rising demand for less efficient meat over cereals.

The Gallagher report, which the Government commissioned, confidently predicts that sufficient appropriate land will be available to meet both biofuel and agricultural food needs through to 2020. However, very openly, very honestly, the report also states that it has made no estimate of the likely conflicts over land use that may arise after that. I suggest to the Minister that this is an important piece of research that must be commissioned urgently. We must ensure that credible, robust and widely accepted sustainability standards are put in place so that biofuel production does not lead to a net carbon debt and so that land of high agricultural, food and biodiversity value does not experience conversion to biofuel production. Only if such standards are established can biofuels and biomass play an important and positive role in the mitigation of greenhouse gas emissions and in avoiding dangerous climate change.

In the remainder of my speech, I shall set out key policy proposals and trust that in his reply my very good friend, the Minister—

First, I pay tribute to the work my hon. Friend has done through the global organisation, both on biodiversity and on biofuels. As he sets out his proposals, will he consider the following points? First, will he touch on the need for an assessment of the impact on diversity of some of those crops? That is very important.

Secondly, biofuels will never be a completely substitute for fossil-based fuels. Should there be some kind of targeting, such as that in the aviation sector for example, which has fewer options compared to the automobile sector? Thirdly, should not the subsidies be directed away from conventional crops, and their distortion of the market in the US, and more towards second-generation biofuels, in particular growing them on marginal land in developing countries?

I am delighted; although my right hon. Friend intervened at some length, every word that he said was apposite. I am grateful for his intervention and his deep knowledge of the subject.

I trust that in his reply, my hon. Friend the Minister will be able to indicate three things for each of the policy proposals that I shall put forward. First, does he accept that the proposal is correct? Secondly, will he indicate whether it is already Government policy? Thirdly, where it is not, will he indicate whether he will endeavour to make it Government policy?

I turn to the proposals. First, the expansion of biofuel production should occur only where there is conclusive evidence of significant full life cycle CO2 reductions relative to fossil fuel comparators. The Minister will realise that if the land under cultivation has a high stock of carbon in the soil, or if existing vegetation is removed to enable biofuel planting, there is a strong risk that carbon from the soil or pre-existing vegetation will be released into the atmosphere, offsetting any potential positive carbon reductions from the use of the biofuel product. Land where carbon stock cannot be compensated within a reasonable period by the greenhouse gas savings from use of the biofuel should not be converted to biofuel production.

In accordance with the EU renewable energy directive, the calculation of emissions of greenhouse gas from biofuel production, EB, should account for all of the following: emissions from the extraction or cultivation of raw materials, including tillage, cultivation, the carbon costs of waste and leakage, and the production of chemicals or products used; annualised emissions from carbon stock changes caused by direct land use change; emissions from processing; and emissions from transport and distribution, as well as the emissions from the biofuel when used.

There should be subtracted from that any carbon capture and sequestration and/or excess electricity from co-generation, together with the proportion of emissions saved through co-products. Those emissions should be compared against a fossil fuel comparator—EF—and the net saving, if any, calculated as That will indicate an overall percentage greenhouse gas saving, and the biofuel in question should be considered sustainable only if the percentage saving is significant.

The second proposal is that the expansion of biofuels should not come at the expense of food security or of land of high biodiversity and conservation value. To achieve that, land use planning both in the UK and in developing nations should be promoted, so that account can be taken of the likely impact of land use changes upon food prices, particularly for local indigenous communities.

The third proposal is that the Government should work with stakeholders to create internationally recognised sustainability criteria that are credible, consistent and independently certifiable. Fourthly, trade regulations and barriers should be reviewed so as to promote certified biofuels as a means of reducing greenhouse gas emissions and promoting economic development. Biofuels classified as agricultural goods are subject to high and sometimes punitive duty when exported into the US or EU, as well as other major markets. That distorts the market, stifles economic growth in developing countries, and perversely rewards those producing fuels that contribute to greater carbon emissions. It must stop.

Finally, considerable investment is required into research and development of the next generation of biofuels to improve the quality of feedstocks, into research to reconcile anomalies between the end of waste directive and the environmental permitting regulations that govern the treatment of the biofuel manufactured from waste, and into research to develop soft cellulose-derived fuels and to improve the efficiency of conversion. That will require substantial investment. How much will the Government commit?

I am confident that my hon. Friend the Minister will agree privately with all five points in his own mind. If he can formally agree with all five in his speech, I shall think that the future for biofuels and the prospects for our avoiding dangerous climate change have come a little closer to being reconciled with feeding an expanding global population.

It is a pleasure to see you in your seat, Mr. Speaker. I congratulate my hon. Friend the Member for Brent, North (Barry Gardiner) on securing such an important debate and on making such an important contribution to the issue. Given his depth and breadth of knowledge of the subject, there is little that I can teach him; he has written the book on the subject, or, if he has not done so already, it is time that he did.

I shall respond to my hon. Friend’s five points, but I regret that I shall not be responding on my feet in the kind of detail that he would like. However, I promise to write to him on any points that he feels have not been covered by what I say now in response to his contribution.

I, like my hon. Friend, would like to make the point that land and our natural environment play a vital role in helping the UK to achieve its own goals of decarbonising its energy production and increasing its security of supply. The conversion of biomass through a range of technologies to produce renewable heat, power or transport biofuels can cut carbon emissions and provide a valuable contribution to our energy mix. However, land is not a boundless resource, and that was the entire point of my hon. Friend’s argument. Issues such as rising populations and changes in lifestyles in the developed and developing worlds mean that the demands on space are greater than ever. In the agricultural sector, in particular, we see increased requirements for food, animal feed and energy production. Scientific evidence suggests that any changes in the way that land is used or managed can have direct and indirect environmental, economic and social impacts. Of course, that is the entire point of my hon. Friend’s case.

Sustainability and land use considerations are therefore at the heart of the Government’s policies and actions to build a competitive, low-carbon bioenergy sector. We intend to reduce greenhouse gas emissions without harming the environment, and, in doing so, we aim to maximise the benefits to biodiversity, farming and forestry, rural communities and employment.

I know that my hon. Friend is less focused tonight on the renewable energy strategy that the Government produced in July, but, as he said, the Government set out a comprehensive action plan for meeting the UK’s target of 15 per cent. renewable energy by 2020. It is an ambitious but, I should say, legally binding target that was agreed at European Union level, requiring an almost sevenfold increase in current renewable energy levels. So my hon. Friend accurately pointed out that the production of heat, power and transport fuels from a range of biomass feedstocks can play a key role in meeting that target cost-effectively. Analysis indicates that about 30 per cent. of the UK renewable energy target could come from bioenergy for heat and power, and, as my hon. Friend said, that equates to 4.5 per cent. of the UK’s overall energy needs in 2020.

I shall move on to the very important points that my hon. Friend has raised with me, but I just point out in pursuit of that renewable energy strategy the contribution made by the renewables obligation that already exists, the feed-in tariffs that will exist by April next year and a renewable heat incentive that will exist in the April beyond that. In addition, my hon. Friend mentioned the grants that are available for the installation of various types of biomass heat and power installations to help to develop a biomass supply change and infrastructure.

Before I move on to the thrust of my hon. Friend’s contribution, I want to mention the good work that he did as a Minister, when he launched the Forestry Commission’s wood fuel strategy in March 2007. In doing so, I want also to praise the work of my noble Friend Lord Clark of Windermere, who has been the commission’s chairman for the past eight years. He tells me that he is to stand down at the end of this year, and I should like to put on the record already my appreciation of his wisdom and enthusiasm and the way in which he has led the Forestry Commission and made it so much more relevant to the kind of debate that we are having tonight.

The Government are taking forward several measures to ensure that increases in biomass production in this country are sustainable. That is why, in April this year, we introduced mandatory sustainable reporting on biomass under the renewables obligation, for example. We are very aware of concerns that energy crops will compete for land used for food production, so we are already, as my hon. Friend asked me to confirm, encouraging and contributing to research on the social, economic, environmental and land use effects of biomass for heat and electricity. For example, results will shortly be available from Government-funded research identifying idle and marginal land for energy crop production and developing solutions for growing crops so that their potential benefits to soil carbon and biodiversity are realised. That is the kind of work that my hon. Friend wants to encourage not only in this country but around the world.

Much of this debate has focused on the finite land resources of the planet, but I would like to raise one point that has not been made—the huge waste of land resources that results from the waste of food production because we throw so much food away. It is thought that almost 50 per cent. of our food is wasted. If we dealt with that, it would release more land resources for more productive and more climate change-friendly uses.

I thank my hon. Friend for her contribution; I can only say, “Hear, hear.” She is right to say that the produce of that land, in terms of food, should not be wasted. There is a similar argument about not wasting our energy resources. Tonight, however, I am going to try to deal with the issues that my hon. Friend the Member for Brent, North raised about the sustainability criteria for the use of land.

Let me turn to international sustainability criteria. Biomass is a global commodity, and as supply is set to expand across the world, we clearly need to act internationally to ensure sustainability. The UK Government are actively working at European and global level to develop efficient and effective sustainability criteria for bioenergy. The Government believe that mandatory sustainability criteria for large- scale users and suppliers of biomass are essential. That is a tick for another of my hon. Friend’s questions. At the end of the year, the European Commission is due to report on the need for sustainability criteria for the solid biomass used for energy generation in the EU and to bring forward proposals as appropriate. The Global Bioenergy Partnership project to develop an international approach to sustainability is due to finalise its criteria and indicators for bioenergy in 2010. Given the close interest that my hon. Friend shows in these issues, he is probably aware that that project is chaired by the UK.

Recent growth in global biofuel production has generated much debate about land use change and the impact that that can have on food availability and prices, as well as other social and environmental outcomes, as my hon. Friend vividly set out. The renewable energy directive does indeed contain an ambitious target for the UK to source 10 per cent. of our transport energy from renewable sources by 2020. I heard what he said about the urgent need for a greater research base for the years 2020. Biofuels, as a readily deployable renewable transport technology available on a large commercial scale, are expected to provide the major contribution to meeting the target. If produced sustainably, biofuels have the potential to offer considerable carbon savings compared with traditional fossil fuels.

However, the Government recognise that we need to do more to ensure sustainability with regard to the indirect effects on the environment. Our challenge is to support and promote the “good” biofuels—those that do not cause environmental or social damage. The UK is already at the forefront of the debate on sustainable, cost- effective biofuels. We are one of the first to establish a reporting system for the sustainability of our biofuels, and we are pursuing an ambitious research strategy based on the best available science, which will inform our policy on all levels. The Government are supporting the development of sustainable advanced—or next generation—biofuel technologies, which my right hon. Friend the Member for Scunthorpe (Mr. Morley) asked about, and which can produce fuels from a wide range of biomass feedstocks, including crop residues and biodegradable wastes, and from ligno-cellulosic processes.

The Government are also active internationally, and the UK has been instrumental in ensuring that the renewable energy directive contains mandatory sustainability criteria for biofuels, including delivering greenhouse gas savings of at least 35 per cent. and making it a condition that they must not be sourced from areas of high biodiversity or from high-carbon soils such as rainforests or wetlands.

I welcome what my hon. Friend is saying about the Government’s sustainability criteria, and indeed they have done an awful lot in relation to such things as forestry standards. However, he raised the matter of certified biofuels. Can he tell me whether there is any progress on that in European discussions or in Government thinking on standards?

All that I have said about the research and discussion to develop the policy in the European Union leads to the conclusion that that is needed, but we are not at the stage of concluding that work. I strongly agree that it is necessary, but I cannot say tonight that we have reached that position yet. We aim to do so.

The criteria do not currently cover the indirect effects of biofuel production such as the indirect land use change that my hon. Friend the Member for Brent, North pointed to as being so crucial to our deliberations. Those effects relate to new biofuel crops that displace existing agricultural production into areas of rainforest and high biodiversity, for example. We agree that the European Commission needs to produce a report on indirect land use change in 2010, and the UK will be focusing its research efforts on trying to find a workable methodology for accounting for the indirect impacts of biofuels under the renewable energy directive.

Does the Minister believe that his sustainability criteria would bear scrutiny by the World Trade Organisation, which has so far failed to recognise such considerations when examining barriers to trade?

I was just coming to some of the five questions that my hon. Friend the Member for Brent, North asked me about policies, and this matter was one of them—it was No. 4. That is a tricky question to answer, which is why my hon. Friend raised it. It will require difficult and, I suspect, long-lasting discussions in the WTO to bring the work on sustainability that we are discussing tonight into the trade environment. I commit to my hon. Friend that I will investigate how best to move forward with that work and bring the matter into that discussion forum, but I cannot say tonight what the WTO’s response will be. It is, after all, a member organisation with many member Governments around the world.

I have just one of my hon. Friend’s points left to respond to, which was about investment in research. I have said a lot about the research that we are doing, so I hope he will agree that the Government are committed to doing the appropriate research. However, when he asks how much the Government will commit and whether I can give him the figure tonight, he is being a little ambitious. That is definitely one of the points about which I will write to him.

Decarbonising energy supply and use is at the heart of the Government’s efforts to tackle climate change. We have put in place a clear strategy and an action plan to deliver significant increases in the production of renewable energy in the UK, and we expect sustainable biomass-based energy and fuels to play an important part in achieving our goals. Ensuring sustainability is key to the development of a viable bioenergy sector, and the Government will continue to focus on optimising our land-based resources to deliver food, feed and energy in a way that meets environmental, social and economic objectives.

Question put and agreed to.

House adjourned.