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Renewable Transport Fuel Obligation

Volume 830: debated on Tuesday 13 June 2023


Asked by

To ask His Majesty’s Government when they intend next to review the renewable transport fuel obligation.

My Lords, the department continually keeps the renewable transport fuel obligation under review to ensure that it delivers cost-effective emission reductions and is best placed to meet our carbon targets.

I thank the Minister for her information, but at the last estimate over 107,000 hectares of land in the UK grew crops for biofuels—land that could have fed 3.5 million people. First, given the pressure on land, the need for greater UK food security and the global shortage of cereal crops caused by the war in Ukraine, will the Government end biofuel production from food crops in the UK? Secondly, on imported biofuels, will the Government ensure that only biofuels produced from waste, agricultural or otherwise, are imported for use in the UK?

The Government have incredibly high standards of sustainability for the fuels that we allow under the renewable transport fuel obligation. As I am sure the noble Baroness is aware, many of the crops grown for biofuels are not fit for human consumption. However, they are grown because they are useful not only for biofuels but for animal feedstock. There is a very careful balance to be struck. The Government are well aware of the land use issue and the need to be able to develop enough human-supporting crops. As I say, we keep all of this under review.

My Lords, I declare my interests in the register. I have two questions. First, what progress is being made with regulations to enable support for nuclear-derived fuels and recycled carbon fuels within the RTFO following the recent amendment to the Energy Bill? Secondly, quota-based systems such as the RTFO are being implemented in other countries for the purposes of decarbonising ammonia and fertiliser production. What plans do the Government have for similar schemes to clean up ammonia?

As the noble Lord will be aware, the Energy Bill is currently working its way through the other place. I am very pleased that we were able to get the amendment for recycled carbon and nuclear-derived fuels, as it goes into primary legislation. We are working concurrently on the secondary legislation to bring that into effect as it is needed and into the various schemes. On ammonia and various other renewable fuels, we are looking very carefully across the entire suite of low-carbon fuels. The Department for Transport will be publishing a low-carbon fuel strategy later this year.

My Lords, the logistics sector is calling for a stronger partnership with government over the use of low-carbon fuels. What arrangements will the Government put in place with the logistics industry for this to happen, including the much-promised publication and delivery of a low-carbon fuel strategy? It was promised last year and then at the end of this year. When will that be published?

As I mentioned in the previous answer, it will be published later this year. The low-carbon fuel strategy is incredibly important. We have been working very closely with the freight and logistics sectors to understand their needs in terms of decarbonisation. For example, we have invested £200 million in the zero-emission road freight demonstration programme. An enormous amount of work is going on in this area. The low-carbon fuel strategy is but one of those things.

My Lords, I refer back to the original Question asked by the noble Baroness, Lady Walmsley. We import 90% of the fuel we use for transport. It is coming from land that could be used to grow food. Last year we imported crops from Ukraine that were then used in biofuels in this country. It is a question of due diligence. Can the Minister reassure the House that we are genuinely using stuff that would otherwise be wasted?

I agree that there is an issue of due diligence here. The Government are always willing to hear from anyone who has any insight as to crops or biological items that may be coming from places that are not within the sustainability criteria. It is not fair to say that renewable fuels come from biogenic materials. It is the case that biofuels from waste represent 76% of the renewable fuels supplied; for example, 93% of all biodiesel comes from used cooking oil, which has very few other uses. While I accept that we need to look at crops and whether they are for human consumption or not—obviously, the latter is the one we focus on—we need to recognise that alternative sources of bioethanol are fairly thin on the ground at the moment.

My Lords, the Renewable Transport Fuel Obligations Order 2007, as amended, says in Article 1A:

“The Secretary of State must from time to time … carry out a review of the regulatory provision contained in this Order; and … publish a report setting out the conclusions of the review … The first report must be published before 15th April 2023”.

Now, I think that date has passed. Has such a report been published? I spent time with my friend Google this morning, and after two hours, could not find it, but with the messy way our legislation is formed, I may have missed it. If it has not been published, why not? It is crucial that commitments such as this are honoured.

I agree with the noble Lord, and I accept that it should have been published by 15 April. It is in its very final stages of preparation and will be published as soon as possible. There is an important component of this post-implementation review: there will be an opportunity for feedback on the scheme as it currently exists. Therefore, I hope that the noble Baroness, Lady Walmsley, and anyone else with an interest will look at the post-implementation review, consider various reports which have recently come into the public domain, and think carefully about how we can improve the scheme. We are always looking for improvements, we keep the scheme under review, and I am willing to keep an open mind.

My Lords, does my noble friend agree that, looking at the long term and particularly our 30 by 30 commitment on land use, we should not be devoting agricultural crops to vehicle fuels—certainly not ordinary vehicle fuels—and that anything we can get from waste should be directed at aviation and other sectors where it is extremely difficult to create substitutes, rather than ordinary domestic road vehicles?

The noble Lord is right. It is the case that the road vehicle sector is at a transition moment, as we go to battery electric and hydrogen fuel cells, but we can use it in this transition period. We are focused on using things such as recycled carbon fuels for sustainable aviation fuels, because we see that as a key way to decarbonise sectors that are much harder to abate, such as aviation. We will be looking at similar technology for maritime, if that exists.

My Lords, long-haul flying looks to be the most challenging sector to decarbonise. It is likely that sustainable aviation fuels will have a major role in doing that. Will the Minister commit to introducing a price stability mechanism, to encourage the development of a UK-based sustainable aviation fuel industry, so that we have the jobs and investment coming to this country, rather than going to our competitors overseas, as it looks like at the moment?

The Government have already recognised the strong case for sustainable aviation fuel for all types of flying, whether short- or long-haul. We will implement a sustainable aviation fuel mandate requiring operators to use 10% SAF by 2030, which acts as a pull on the market. Therefore, we are considering what else needs to be done to make SAF plant projects in the UK investible. This will not be a government-sponsored contract for difference as the SAF mandate does an awful lot of the heavy lifting, but we are working very closely with industry to look at an industry-led solution to improve the revenue certainty when it comes to SAF.

My Lords, is it not the case that this small island is crying out for a land strategy policy, and that the House of Lords Land Use in England Committee recommended that we have the strategy and resources for it, and that all departments take part? Does the Minister share my disappointment that this is not happening?

I understand that it is happening, but I am slightly more excited by the biomass strategy, which will look at all the elements of biomass—what their potential uses are for our domestic environmental goals but also how they interact with our land-based goals. Therefore, we will also have the opportunity to look at our sustainability criteria, and how they can be strengthened in the context of looking at land strategy.