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Energy: Biofuels (EUC Report)

My Lords, I, too, served on the sub-committee that took evidence, and I congratulate those involved in assimilating the huge amount of evidence and writing the report for us. At first sight, biofuels seem attractive. They seem to promote two important agendas: first, as an energy source, they seem merely to reissue the CO2 absorbed during the growing of the crop and so be carbon neutral; and, secondly, they seem to offer the EU agriculture industry—I declare an interest as a farmer—a much needed extra source of revenue after a decade of very poor returns. Of course, these two agendas need more explanation and after further investigation the picture is not quite so rosy, as the noble Lord, Lord Sewel, and the noble Earl, Lord Selborne, highlighted. First, the growing of wheat and other crops to create bioethanol in the EU is not a carbon-neutral process, nor is it beneficial interms of other greenhouse gases. Field work forthe planting, management and harvesting of crops requires considerable fossil-fuel emissions; just working the soil emits carbon dioxide into the atmosphere, and the application of fertiliser means that nitrous oxide also escapes into the atmosphere. That is the downside of most crop production inthe EU. Meanwhile, in Brazil they are proposing to utilise their vast areas of natural forest and savannah to triple their already huge production of sugar cane for fuel. I cannot see how that process can help global warming. I have witnessed the reclamation of land in the Mato Grosso via a slash-and-burn policy, and the short-term effect of that can only contribute to global warming. Although I admit that, as the noble Earl, Lord Selborne, said, sugar cane is one of the best plants in the world for converting solar power into energy usable by mankind, knocking down forests in South America, Africa and Indonesia to grow feed stocks for biofuels from palm oil and sugar cane and then shipping it several thousand miles to Europe does not seem to be environmentally attractive. The idea that Brazil can get carbon credits for doing that seems absurd. What struck me, like the noble Earl, Lord Selborne, about the evidence we took from Europe is that the biofuel debate did not seem to be driven by global warming arguments, but only by the desire to be free from fuel dependency on Russia in the case of Europe, or other oil and gas-producing countries in the case of the United States. Only Denmark seemed to bring an environmental focus to bear on the biofuel debate, and insisted that there were better ways of extracting energy from biomass which were more environmentally friendly. It is interesting to note from a recent report that it has done a complete U-turn on this and proposes to invest a lot of money to harness new developments in the field. Having said all that, I very much support our report’s conclusions that whatever the shortcomings of current EU bioethanol and biodiesel production, it is right that the Government should do all they can to promote this embryonic industry through use of the RTFO, the renewable transport fuel obligation. I add that we emphasise—a matter that has been stated before—that the EU should do all it can to encourage a system of environmental audit or certification of the biofuel production, both at home and abroad. I agree with the noble Earl, Lord Selborne, that I am not sure how it might achieve that. I have two important reasons for supporting the industry at this time. First, transport generally is a growing source of greenhouse gases, and biofuel is one of the few ways attracting investment which could improve the sector’s performances. As I have pointed out, it is not ideal. I think that that reason would not be good enough to support an industry which perhaps could do more harm than good, vis-à-vis climate change. However, the second and main reason for my support of these first-generation biofuels is that second-generation biofuels are almost upon us, asthe noble Earl, Lord Selborne, stated. The second-generation process allows the conversion of lignocellulose material—woody material—into fuels; actually, into almost everything, from chemicals to perfumes to medicines and so on. The difficulty is that each woody material—whether it is wheat straw, maize stalks, miscanthus or wood from trees, thinnings and so on—requires a different enzyme to break it down. Once that hurdle has been overcome—the noble Earl, Lord Selborne, reported that there is good reason for optimism—we are into a wholenew ball game, where many of the disbenefits of first-generation biofuels evaporate. For a start, we will be able to use perennial crops, such as miscanthus, willow and so on, which cuts out soil disturbance and virtually all fuel and fertilizer use in growing the crop. Secondly, it means that there ceases to be any real competition between fuel and food in terms of land use. For example, with wheat, you would merely use the grain for food and the straw for fuel. The same applies to maize. In other words, we as farmers would start to use the whole crop for commercial return. Thus, I end where I started. Whereas the current generation of biofuels would only seem to be helpful to climate change, but in reality have some serious shortcomings, I believe that second-generation biofuels will be hugely beneficial, both to climate change and to UK agriculture. Therefore, I strongly support our recommendations that this industry is very worthy of government support. But, above all—I end by making this strong recommendation—we must not at this stage do anything to underminethe research and development of second-generation biofuels. That, with the dramatic cuts Defra is making to its R&D budget, is exactly what the Government are doing.