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Energy: Biofuels (EUC Report)

My Lords, I do not have the expertise of the noble Earl, Lord Selborne, on this subject, but the debate is timely and I congratulate the noble Lord, Lord Sewel, on achieving it. Demand for fuel is growing fast and will continue to do so. A 10 per cent target share for biofuel use in the transport sector by 2020, as proposed by the European Union, is demanding simply because of the rising consumption trend. Meanwhile, the search for energy economy and efficiency must continue apace. That was partly what the noble Earl, Lord Selborne, was referring to. The fact that we are looking for more fuel should not blind us to rapidly rising demand throughout the world. Biofuels are therefore not ““instead of”” issues but part of a multi-pronged attack on energy use. Can the Minister say whether ““the transport sector”” includes aviation? If so, it would make the subject even tougher than it already is. The Select Committee draws attention to many things and while nobody wants over-regulation or over-direction, there are several very important roles that the European Commission should play. We must remind ourselves continuously, despite the noise, that we are an integral part of the European Commission. We have Ministers and Members of the European Parliament there and we should seek to influence policy. I despair sometimes at the continual whingeing that we hear about it. The United Kingdom is not doing as well as some other states. We have to admit that and learn from those other states. A European-wide system of certification is necessary. The noble Earl, Lord Selborne, said that such systems do not work very well as regardstimber, but we are talking about things that are internationally tradable. We do not want to lay waste to the forests of Brazil, Indonesia or elsewhere to feed our appetite for fuel, and lifecycle environmental performance is vital for imported and domestic biofuels. The taxation system is a very powerful weapon in our armoury. It has to be exercised carefully to avoid transgressing the state aid rules to which the Select Committee drew attention, but it is noticeable that other countries in the EU give greater tax and other incentives without apparently offending EU rules. I sometimes wonder whether this country is oftennot the victim of EEC rules but a victim of the assiduousness with which we apply them. Those are two different things. Blending limits, as mentioned by the noble Lord, Lord Sewel, have to be addressed on an EU basis, because the vehicles and the fuel that they use are in common use and are freely traded and the automobile industry really only negotiates with the EU and Japan together. It certainly cannot be done on a national basis. As has been mentioned, the oil and vehicle industries must be persuaded to set higher limits for bio-ethanol and they should consider that alongside other clean technologies. I give those few examples—and there are others—to show Ministers and officials that they should get in there and seek to drive policy the way that they want it. They should find allies. Just as you do not win sports events from the touchline, you will not win this debate from a passive position. To return to targets, how does the Minister intend to implement the binding 10 per cent target for 2020 as agreed by the European Council? Often, when energy Questions are asked in this House, they are played back with a dead bat by Ministers answering from the Dispatch Box. However, we are not asking potentially embarrassing questions about nuclear power this time, but constructive, neutral questions about how we move forward to achieve a target that we assume is already part of government policy. I do not think that Ministers can play this back by referring to the Comprehensive Spending Review, for example, which we recognise is off limits; we want positive indications in the Minister’s reply. That would be very welcome. As has already been said, we do not want to seethe self-sufficiency policy with the EEC for food abandoned, but we welcome the prospect of more land being productively and intensively used for feedstock, if that is possible. With that in prospect, it is necessary to address issues such as the transport of material to processing plants, because it is no good, for example, growing crops in Scotland if you are going to use lots of fuel getting them to the processing plants wherever those happen to be. We hope that the Government have plans to support these developments, particularly in developing the technology from renewable resources and upgrading what are now demonstration products to the commercial scale at which they have to operate. Those demonstration projects are best supported on an EU basis, withthe prospect of moving forward commercially on a national basis. A commitment to long-term relief on excise duty is something that the Government ought to consider. It is necessary in the long term to encourage investors, and it could be at no net cost to the Treasury. It is the differential that matters. All sorts of other environmental factors can be taken into account in designing congestion charging schemes or implementing the long-awaited lorry charging scheme, when environmental performance can be one of the factors taken into account, covering all lorries—domestically owned and foreign registered—as it does in Germany. Will the Minister say whether, in his opinion, the incentives for the oil industry to engage fully in the process of adopting biofuels are sufficiently strong? We know that the oil giants are very large and powerful, but they need to be committed to the process. I would like to think that the oil industry is considerably more committed than, for example, the tobacco industry may be to stopping smoking or the drinks industry to combating alcoholism. That is one of the reasons why I was slightly discouraged by the second two paragraphs of the foreword of the report, which talked about things being pursued on national basis. This is a matter of international significance and it can be effectively pursued by this country only through the efforts of the European economic union.