Thank you to the Westminster Energy, Environment and Transport forum for inviting me to speak at your event this morning.
I am pleased to have the chance to talk to you about the possible next steps on biofuels policy. First though, I want to talk a bit about how we got to where we are today, and in particular about developments over the past year.
The coalition government has stuck by its commitment to cut the carbon footprint of road transport by implementing measures which promote the use of renewable energy, including of course biofuels.
This concerted effort has not only contributed towards the European Renewable Energy Directive and Fuel Quality Directive targets, but also, in the case of sustainable biofuels, to our international obligations on climate change.
We took an important step towards the goal of truly sustainable biofuels when we implemented the transport elements of the Renewable Energy Directive last December. The introduction of mandatory sustainability criteria means that to benefit from incentives under the Renewable Transport Fuel Obligation (RTFO) biofuels must now, with some exceptions, deliver greenhouse gas savings of at least 35% compared to fossil fuels. They also cannot be sourced from areas of high biodiversity.
The changes we made to the RTFO last year also introduced double counting. This provides a further incentive for biofuels made from wastes and residues, in recognition that these feedstocks are unlikely to compete with food production or contribute to indirect land use change. In the first 4 years of the RTFO, the proportion of biofuels produced from wastes, rather than crops, increased from 12% to 49%.
So I am confident that we have already made significant progress towards ensuring that biofuels used in the UK are sustainable. Indeed, in my view it is imperative that the UK biofuel industry continues to invest and grow.
I was delighted to be able to open the Agri Energy biodiesel plant in Bootle in Liverpool this year….a large new investment that will see the collection of wastes turned into biodiesel.
I believe it is vital that we keep seeing profitable investments like this which produce low carbon energy, provide jobs and help us to meet our ambitious carbon reduction targets.
However, while biofuels should be a key means of achieving carbon reduction targets, we also know that some biofuels still carry sustainability risks. We remain very concerned that studies have demonstrated that some biofuels can even produce greater carbon emissions than fossil fuels, particularly when indirect land use change (or ILUC) is factored in.
I have consistently made clear at European level that ILUC needs to be addressed urgently to ensure that people can be confident that available biofuels mean genuine GHG savings. It is very much in the interests of the biofuel industry itself that we reach this point, and do so as soon as we can.
So it is helpful that the long awaited ILUC proposal was adopted and published by the European Commission last month. My officials and I are currently analysing the proposal and its implications.
The Commission’s proposal sets a 5% cap on the level of contribution food-crop-based feedstocks can make to our 10% RED transport target.
The proposal also includes additional support for advanced biofuels, seeking to encourage further development in feedstocks which do not compete for food, feed or land.
I want to ensure that we have a settled policy framework based on good scientific evidence, and I hope that these European developments can move towards this.
In the meantime though, I genuinely do not believe that setting further short term interim targets can provide the clarity industry continues to demand. It might give the veneer of certainty over a body of doubt. Although I fully appreciate that industry needs clarity on future policy to plan investment, it is equally crucial that government’s policy achieves what it is meant to deliver.
This is why I have adopted a cautious approach in setting future biofuel targets within the Renewable Transport Fuel Obligation. Better in my view to go slower in a direction that is certain rather than to go fast and have to change direction.
There have been too many examples of government moving too quickly forward on a policy which they have later had to pull back on. Furthermore, industry tells me that it is certainty they want, not an impression of certainty which turns out to be vacuous.
However, I can assure you that we will continue to investigate potentially helpful options, such as the advanced biofuels, which I believe offer a real opportunity for investment and growth for the whole economy.
In the longer term the advancement of the biofuels industry will surely rely on the development and commercialisation of many of these new technologies.
We are also interested in the potential to use biofuels in sectors where, at present, there are limited options to decarbonise…. such as in aviation and HGVs.
As an example, I recognise the importance of biomethane made from waste as a sustainable renewable transport fuel, particularly in the heavy goods vehicle sector where there are real market barriers to uptake of low emission technologies such as hybrid, electric and gas.
To support the use of lower emission HGV technologies, the Department for Transport has made available over £11 million capital funding to trial low carbon lorries and their supporting infrastructure.
13 projects, trialling over 300 vehicles between them, will receive funding towards the cost of low emission HGV technologies. The funding is also being used to help establish gas refuelling infrastructure.
This initiative will increase the number of low carbon lorries on the road but it will also provide vital information on the performance of these vehicles in the real world….something that will help encourage wider uptake of lower carbon lorries and promote the use of biomethane as a sustainable fuel.
I am also keen to develop this technology for buses, and am doing so through the Green Bus Fund.
Biofuels are of course just 1 part of a wider strategy to encourage growth and cut carbon. For example, we are also committed to supporting the uptake of ultra low carbon vehicles in the United Kingdom.
The Spending Review announced provision of over £400 million to support the development of the ultra low emission vehicle market work to 2015. This support package includes funding;
- for recharging infrastructure schemes
- to promote the uptake of ultra-low emission cars through the Plug-In Car and Van Grants
- of £82 million to support for research and development
In addition UKH2Mobility was launched last January. This joint undertaking with key industry stakeholders will evaluate the potential for hydrogen as a fuel for ultra low carbon vehicles in the UK.
Biofuels have become an important part of the UK economy, of our national infrastructure and of efforts to meet our international emission and energy targets.
And that’s why we are focused on ensuring that this national resource is used appropriately and that the full consequences of growing biofuels are considered and assessed.
This coalition government believes that it is possible both to safeguard the environment and support the economy.
We know that these goals are not incompatible. Quite the reverse. They are in fact 2 sides of the same coin. You can cut carbon and boost growth and our work with biofuels is proof of that.
The UK biofuels industry continues to lead the world in sustainable and renewable fuels and I am proud of the efforts and achievements the industry has made so far.
To maintain our lead in this industry and to address barriers to supply, we need to continue to work closely with suppliers and to listen to concerns raised about the social and environmental sustainability of biofuels.
In this way not only will we get the best deal for the industry, the taxpayer and the consumer… we will get the right policies for our the transport sector, the economy and the environment