To ask the Secretary of State for Transport whether he will review the renewable transport fuel obligation following the finding of the report commissioned by the Department for Transport that the production of biofuels will result in forests being logged or burnt down and converted to plantations.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest, this time as a grower of sugar beet, which may be used as a biofuel.

My Lords, the independent Gallagher review found that biofuels have the potential to achieve approximately 338 million to 371 million tonnes of global CO₂ savings a year. We have commissioned research on the emissions from different forms of biofuel production to inform future policy in this area. Biofuels will become the first agricultural commodity with mandatory European sustainability standards by 2011.

I thank the Secretary of State for that Answer. Given that the Renewable Fuels Agency states that only 4 per cent of biofuels imported for use in the UK meet the environmental sustainability standards set by the RTFO, how can he be satisfied with the scheme?

My Lords, a good deal of research is taking place in this area. A research programme is in place at the moment to quantify and mitigate the impacts of indirect land-use change in respect of biofuels. The UK research is due to be completed this summer and we will publish it. It will feed into a consultation being held by the European Commission on the subject later this year. That will form part of the obligation on the European Commission to produce a report on indirect land-use change and, if appropriate, to propose a methodology to account for indirect land-use change in future.

My Lords, as one of the instigators of the RTFO and as a biofuel supplier and grower does not the Minister agree that, to meet the RTFO, all biofuels must come from truly sustainable sources, and, one hopes, from sources within the European Union?

My Lords, I indeed agree and pay tribute to the noble Lord for his work in this area. To give an example, the Ensus biofuels from wheat plant that recently began operation in Teeside claims that it can produce a third of our current biofuel obligation under the RTFO when it is fully operational. Using British and European wheat for biofuels is a positive use of land. It encourages wheat production, which has positive co-products, including animal feed.

My Lords, does the Minister agree that no matter how we produce oil, there will always be some downsides? Bearing that in mind, does he agree that encouraging the use of public transport should be seen as the major answer to transport needs in future? Furthermore, if cars are to be needed for short journeys, considering the increase in the production of electric cars which has been announced, will he ensure that all new train station car parks can charge those cars?

My Lords, the noble Lord makes an important point about electric car production. Today, we have announced that the Leaf will be produced in the north-east. That is a decisive step forward in making the United Kingdom a manufacturing base for plug-in hybrid and electric cars. We have also recently provided £30 million of funding for a plugged-in places initiative that will identify three significant regional centres for electric charging infrastructure: London, the north-east and Milton Keynes. I launched that scheme in London a few weeks ago in a supermarket car park, so we are taking very seriously the points that the noble Lord raises. It is important that, over time, we establish an electric charging infrastructure across the country that encourages people, including those who do not have off-street parking, to buy electric and hybrid cars.

My Lords, the report from E4tech appears to indicate that a spectrum of biofuels fails to meet the EU’s standards for emissions reduction. Does that not reinforce the case made by my noble friend Lord Taylor for a major review of the work that the EU is promoting in this sector to ensure that we are getting value for money on the large sums that are being used for agricultural support in this area?

My Lords, as I said in my answer to the noble Lord, Lord Taylor, it is precisely for that reason that we are conducting that research at the moment. We will ensure that the European Commission takes full account of it when determining future policy.

My Lords, the E4tech report indicated that there were grave problems with biofuels and the stripping down of rainforests internationally. The EU has also produced a report which, as has been said, has not been published. Has the Secretary of State had sight of that EU report? If so, what did it say?

My Lords, there are so many EU reports; I am not quite sure to which one the noble Baroness refers. If she would like to give me more precise particulars, I will be happy to follow up with her as to the publication.

I turn to palm oil, which is the particular source of biofuels at issue in the research work reported in the newspapers recently. It is important to understand that palm oil is a small proportion of biofuel production. It accounts for 10 per cent of the 1,284 million litres of biofuel used in the UK in 2008-09, and less than 4 per cent of global demand for palm oil comes from biofuels. It is not the case that all palm oil production is unsustainable, even in the terms of the research that was conducted. Research carried out by the Renewable Fuels Agency suggests that certain practices can be undertaken to limit the unwanted impacts of biofuels. Specifically to palm oil, this report highlighted that there are potentially 35 million hectares of unused land in Asia where suitable biofuel production, including palm oil production, could take place. The issue at stake is not simply the source of the biofuels but the land in question when it comes to production. Clearly, deforestation or the transfer of land from agricultural purposes to certain types of biofuel production may be undesirable, but there is plenty of marginal or unproductive land across the world which would be suitable for these forms of biofuel production.