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Energy: Biofuels (EUC Report)

My Lords, it is a great privilege to have served on EU Sub-Committee D over the past two years under the chairmanship of my noble friend Lord Renton of Mount Harry. I almost flinched when he said earlier that he had to remind some members of his committee on occasion that we were an EU committee and not just dealing with UK affairs. If I am a guilty party in that respect, I admit that it is perhaps because, having spent nearly 30 years in the European Union dealing with European affairs, I came home and found us so much a lame duck that I fought for the UK on those occasions and therefore referred perhaps more to UK affairs. The baton has been handed over to the noble Lord, Lord Sewel. It is a pleasure to continue to serve on the committee under his chairmanship. The report refers specifically to the European Union strategy on biofuels, which forms the basis of the plan of action for dealing long term with renewable energy in the interests of reducing greenhouse gas emissions as we face climate change. The noble Lord, Lord Sewel, set it out so clearly that I need add nothing to what he said, but I have no hesitation in supporting fully the whole report, looking at it as we did in the longer term. Since the report was written—a long time ago, as we were reminded by the noble Lord, Lord Palmer, in particular—much has happened. Targets have been set across Europe, and the European Union has declared that it has significant capacity for energy production from biomass. The European Environment Agency states that, by 2030, bioenergy could provide 15 per cent to 16 per cent—equal to 295 million tonnes of oil equivalent—of the requirements as opposed to only 4 per cent in 2003, without harming the environment. That is, of course, for all bioenergy, of which a substantial part could be feedstock for biofuels. We need, as others have stated, a clear strategy to give investor confidence to meet the mandatory 10 per cent biofuel target by 2020 and the 5.75 per cent target by 2010. Biofuels, in terms of production from crops such as wheat, rape and sugar and all arable crops are, as we recognise, a new technology requiring a good deal of research, enabling further efficiency along the whole production chain. Changes are taking place far more rapidly than perhaps many of us realise. Plant breeding has to be targeted at improving extractable oil and starch yield. The agronomy has to be considered, and that is changing. There are reduced inputs in various forms. In looking at processing efficiency, it is good news to hear that British Sugar is making considerable investment in a plant that will deal with a product about which we heard from my noble friendLord MacGregor. Development is taking place. Itrequires new skills in marketing techniques and the exploitation of the synergy with bio-energy and food uses. Technology also has to apply to the production of biofuels from wood equivalent, which allows a much greater range of biomass to be used. Again, that requires essential long-term research, but it has an exciting future. We have heard much of the great Brazilian experience on biofuels, which I have witnessed in that country over the past 30 years. It has shown an average efficiency gain of 4 per cent a year over the production chain. At what expense? We hear of the elimination of many forests, but nevertheless they have done it. From the evidence and research we studied forthe report, our conclusion is that, given sufficient support, there is no reason why the European Union and the United Kingdom cannot ultimately compete. It must be remembered that crops used in the production of biofuels are dual purpose. In wheat, one third of the crop for bio-ethanol is retained as distillers’ grains, a high quality animal feed. In oilseed rape biodiesel production, 50 per cent of the product is retained as high-protein animal feed. That can replace protein feed imports, not only to benefit the economy but to reduce carbon emissions. An alternative is to generate further bioenergyfor the United Kingdom. Biofuel co-products canbe used to supply biomass for heat and power production, helping to reduce still further carbon emissions. The potential is there. The Minister said earlier that we do not want a lot of whingeing. There is no whingeing on this front; there are tremendous opportunities, and that is seen by those involved in longer-term production. As stated, the projected area of land required to meet the targets is in the region of 900,000 hectares in the UK alone. We have an average exportable wheat surplus of over 3 million tonnes, as the noble Lord, Lord MacGregor, said and mandatory set-aside of some 570,000 hectares of land. Those calculations take no account of the production of biodiesel from waste cooking oil or tallow, such as the 50 million litres used by Argent Energy in Motherwell, to which the noble Lord, Lord Palmer, referred. A market is emerging in renewable energy that provides prudent carbon savings over fossil fuels, which can be supplied by sustainable agriculture. The estimates of that august body, the National Farmers’ Union, show that, in practical terms, if we remove the now outdated system of land set-aside and bring that land back into production, we can reach the target and make a real contribution on biofuels from fieldto fuel. For years the European Union has been castigated for overproducing food, resulting in the control measures to which we have all been accustomed over those years, stifling potential. Now a new market is emerging in renewable energy that proves carbons savings over fossil fuel. It must not be seen as a threat to the ever-cheaper supply of raw materials that people have become used to under the common agricultural policy. I hope that, in his response, the Minister can state positively his views on how we can move forward. I hope that he will take note of paragraph 46 of our report, which refers to the importance of joined-up thinking. We state that government partnerships, particularly in France, Germany and Sweden, are showing mutual co-operation. That is essential for success, and I hope that we can join those countries.