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Agriculture: Renewable Fuel

Volume 694: debated on Thursday 26 July 2007

asked Her Majesty’s Government:

What role they envisage British agriculture playing in reaching the road transport fuel obligation target.

My Lords, before I answer the Question, perhaps I may say how nice it has been to work with the noble Baroness over the past few years. I understand that this is her last day on the Front Bench for the Opposition. Her charm and experience have been valuable to the House and certainly to the Ministers who have answered her many, many questions.

It is expected that the biofuel supplied to meet the 5 per cent target will come from a mixture of domestic and imported feedstocks. UK farmers will be able to play a significant role and compete in this market, and we understand that several biofuel production facilities anticipate using domestic feedstocks. But much will depend on the ability of UK farmers to compete on price and quality with overseas producers.

My Lords, I thank the Minister for his response, and particularly for his generous words. I started opposite the noble Lord, Lord Donoughue, and I think that the noble Lord, Lord Rooker, is my fifth Agriculture Minister. I am not claiming that I got rid of them; it is just a fact of life. However, I thank the noble Lord for his generous comments.

Can he assure the House that UK-produced biofuel crops will not be disadvantaged by overzealous accreditation and that those rules will apply equally to imported crops?

My Lords, the noble Baroness is right: we want a level playing field for UK producers. The potential for them to become involved is quite substantial, probably through a mixture of crops. Supplying the whole 5 per cent for the renewables obligation would require some 1 million to 1.5 million hectares. We farm about 5 million hectares and about 500,000 hectares are currently in set-aside, some of which is used for such crops. There are problems with imported biofuel from the United States, where there are tax subsidies, but they are being dealt with. It will take a while, but negotiations are going on. We have contacted the European Union and the Trade Commissioner to get those problems sorted out so that our farmers are not disadvantaged.

My Lords, if the penalty buy-out price was increased to 20 pence a litre, would this not therefore encourage the oil companies to invest in this exciting new venture?

My Lords, I do not think there is a problem about investing. I have a list of almost a dozen plants for biofuels currently under construction in the country, some of which are very substantial. The programme should not require a great deal of public subsidy; there is a lot of money to be made on this, both for farmers and others. The renewables obligation is designed to set up a market for producers to respond to. Obviously at the present time there is that change in the tax arrangements for biofuels, which will continue.

My Lords, will the Minister turn his attention a bit further ahead to when there will be substantial pressure throughout the world both for motor fuel and for food? Are the Government developing any long-term strategy to assess the ability of this country to meet possible future shortages of both?

My Lords, that issue is being raised. We want biofuels to be imported and used around the world, but from sustainable areas. It is not much good chopping down the forests to plant biofuels; that would damage the environment and so negate the purpose of doing it in the first place.

This is only the beginning of this technology, and it may not stand the test of time. It may stand for a generation or more, but biomass for heating and the technology of anaerobic digestion could well be the way to deal with climate change. This is not a panacea; there is not enough land to grow the crops, so it is not the silver bullet that some people might think.

My Lords, I thank my noble friend Lady Byford for the tremendous job she has done over a period of years. It has been a privilege to sit behind her and give what support one can from time to time, and we wish her well in a sort of semi-retirement—although one could not believe that she would ever retire.

Does the Minister accept that there are around 900,000 acres of set-aside land in this country and that therefore land is available to grow more crops? Does he further accept that in a normal year—although one does not know what sort of harvest we will have this year—we have around 3 million tonnes of wheat to export? The investment, as he has said, is taking place, and there is therefore tremendous scope for fulfilling our commitment of the amount that will be required to add to the other forms of producing energy.

My Lords, the noble Lord is right. The plan is to abolish set-aside anyway; it is proposed to have zero set-aside. We do not want to lose the environmental benefits that accrue from set-aside, although there are arguments about how good they have been. Some farmers have used set-aside as part of the rotation; others have used it for land that has been set aside for some years. Now they are able to grow energy crops on set-aside land, but some 900,000 acres—500,000 hectares or more—have not been used for growing food, so that land is available for this. It is up to farmers. It will require co-operation, and it will be good for the farmers to co-operate with each other. The capacity is being put in to use these products, and we wish them well in the future. It will be another income stream for farmers, which is important.

My Lords, as one of the many former agriculture Ministers the noble Baroness, Lady Byford, saw off, I join in the appreciation of her around the House. I did not always appreciate her when I was sitting where the Minister now is, but I appreciate her contribution to agricultural matters in this House. I was also the Minister who saw through the transport fuel obligation at the behest of the late, lamented Lord Carter, the noble Lord, Lord Palmer, and others. One of the strategies envisaged at that time was not only that we would grow biocrops here and elsewhere in the world, but also that we could mobilise waste from food, agriculture and forestry in order to make both biomass and biofuels. Will the Minister indicate that that is still part of the strategy and that the regulatory barriers and other resource measures to mobilise such waste are part of the plan for meeting the obligation?

They certainly are, my Lords. We waste between 30 per cent and 40 per cent of the food that is grown and produced in this country. There is green waste, as well as an enormous amount of animal waste from cattle and pigs. None of that should be going to landfill. All of it contains energy, and the technology is there to extract it. We have funded anaerobic digestion plants around the country on an experimental basis, and some are in commercial operation. That is probably the future; we could benefit from it long-term. The Germans have 3,000 anaerobic digestion plants on their farms. That is an integral part of what we are doing to protect the environment, reduce waste to landfill and mitigate climate change.