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Biofuels

With permission, Mr. Speaker, I would like to make a statement on biofuels. There is widespread agreement in the House and the country that we must step up efforts to tackle climate change through dramatic and global cuts in greenhouse gas emissions. One of the most difficult challenges that we face is the use of fossil fuels for transport. Our cars and other forms of transport are the third largest source of carbon dioxide emissions in the UK. That is why the use of a clean, renewable energy, which can partly replace carbon-based fuels, was seen by experts, environmental campaigners and Governments around the world as a welcome and practical way of slowing emissions growth. In March 2007, after four years of encouraging biofuel use, the EU went further and set an ambitious target of 10 per cent. of transport fuel from renewable sources by 2020. In the UK, the Government introduced the renewable transport fuel obligation, which came into force earlier this year. That requires biofuels to make up 2.5 per cent. by volume of road transport fuel sales in the UK, increasing by 1.25 per cent. a year to 5 per cent. by 2010-11. The UK has also been at the forefront of global efforts to develop robust, and workable, sustainability standards for biofuels. As part of the RTFO, we introduced a requirement that transport fuel suppliers should report on the environmental performance of their biofuels. That will give us evidence on the impact of biofuels, as well as creating an incentive for suppliers to source the best biofuels. We also made a commitment to introducing at the earliest opportunity legally enforceable standards, which will ensure that biofuels are produced sustainably. However, in recent months questions have been asked about the more intangible, indirect effects of biofuels on food supplies and prices and on deforestation, and their overall impact on greenhouse gas emissions. I am sure the House will agree that our policy on biofuels should be based on the best possible science. So in February, I asked Professor Ed Gallagher, the chair of the Renewable Fuels Agency, to examine the latest available evidence. I welcome the publication of his report today and want to thank Professor Gallagher and his team for their thorough work on a highly complex matter. Let me outline Professor Gallagher's main findings. Overall, the report confirms that biofuels can play a role in tackling climate change and that"““there is a future for a sustainable biofuels industry””." It finds that by 2020"““biofuels have the potential to deliver annual global greenhouse gas savings of approximately 338 to 371 million tonnes of carbon dioxide””." But Professor Gallagher also concludes that there is a risk that the uncontrolled expansion and use of biofuels could lead to unsustainable changes in land use, such as the destruction of rainforest to make way for the production of crops. That might, in turn, increase greenhouse gas emissions, as well as contributing to higher food prices and shortages. The Gallagher report therefore concludes that the introduction of biofuels should be slowed until policies are in place to direct biofuel production on to marginal or idle land and until these are demonstrated to be effective. The detail of these control mechanisms would need to be agreed internationally. However, the report rejects calls for a moratorium on biofuels. It concludes that"““a moratorium will reduce the ability of the biofuels industry to invest in new technologies””" and"““will make it significantly more difficult for the potential of biofuels to be realised””." In short, the report concludes that"““the Government should amend but not abandon its biofuel policy””." The report recommends that the rate of increase in the RTFO in the UK should be slowed to 0.5 per cent. per annum, so that the RTFO reaches 5 per cent. in 2013-14, rather than in 2010-11 as currently planned. At the EU level, the report concludes that a mandatory 10 per cent. renewable transport fuel target is not currently justified by the scientific evidence, but that a target of 10 per cent. by 2020 could be possible if a number of important conditions are met. Those conditions include sufficient controls on land use change being enforced globally, as part of a new climate agreement, and new evidence providing further confidence that the target can be met sustainably. In the meantime, Professor Gallagher says that a more appropriate range for the 2020 biofuel target would be around 5 to 8 per cent. by energy. I agree with those key findings. Given the uncertainty and the potential concerns that Professor Gallagher sets out, it is right to adopt a more cautious approach until the evidence is clearer about the wider environmental and social effects of biofuels. We also need to allow time for more sustainable biofuel technologies to emerge. I therefore intend to consult formally on slowing down the rate of increase in the RTFO, taking the level to 5 per cent., as Gallagher recommends, by 2013-14, which would be subject to further confirmation in 2011-12. Professor Gallagher's findings are particularly significant in the context of ongoing debates about biofuel targets across the EU. To help to ensure that sustainability is put at the heart of those debates, the Environment Secretary and I are today jointly sending a copy of the Gallagher report to the relevant European Commissioners and to all EU Environment and Transport Ministers. In response to those concerns, including over rising global food prices, the Prime Minister has today been pushing for the G8 to work to develop new global benchmarks for sustainable biofuel production and use. The Government believe that the EU target of 10 per cent. renewable transport fuels by 2020 can remain an overall objective, but subject to clear conditions. I would like to set those out. First, the EU-level sustainability criteria currently being negotiated must address indirect, as well as direct, effects on land use. Secondly, the 10 per cent. target must be subject to rigorous review in the light of the emerging evidence, so that we can make an informed decision at EU level in 2013-14 about whether the target can continue. As Professor Gallagher also suggests, I agree that we should aim to target support on the development of lower carbon and other so-called ““second generation”” biofuels. Looking ahead, we will continue to work with our international partners and the scientific community to decide what further work needs to be done to reduce the uncertainties in the science and ensure that the right biofuels are supported. We will also continue to investigate other technological solutions that have the potential to deliver a low-carbon transport system, such as hybrid and electric vehicles. I believe that the approach that I have set out today is the responsible one. It acknowledges that biofuels can have an important role in reducing carbon emissions and combating climate change, but also recognises that we need to proceed cautiously until we can be certain that their expanded growth and use maximises the benefits and minimises the risks to our world. As I have demonstrated today, I will not hesitate to alter our policy if that is what the science suggests is appropriate. I commend this statement to the House.