Written statement to Parliament

Responding to the consultation on the Renewable Energy Directive

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Renewable Energy Directive consultation response published.

Today I am publishing our response to the comments received in the consultation on our proposals for implementing the transport aspects of the Renewable Energy Directive (RED), confirming action we will take to implement this directive in the UK.

The RED requires the UK to source 10% of energy used in transport from renewable sources by 2020 and is closely related to the Fuel Quality Directive (FQD) which requires fuel suppliers to land-based transport and similar applications to deliver a 6% reduction in lifecycle greenhouse gas emissions from their fuels by 2020.

Our policy on biofuels is relevant to both directives. There remain a number of uncertainties regarding the sustainability of biofuels and their best use. However, I do believe that genuinely sustainable biofuels have an important role to play in our efforts to tackle climate change and in security of energy supply. This is particularly so in areas where there is no viable alternative fuel on the horizon such as for HGVs and aviation.

It is crucial that we do all we can to ensure that biofuels both deliver real greenhouse gas emission reductions and do not cause unacceptable environmental and social side effects in the process. There is much work being undertaken, nationally and internationally, to better understand the indirect effects related to biofuels and to investigate how the negative indirect effects can be reduced.

As the directives currently stand, they do not take into account these indirect effects. While the extent of these impacts remains uncertain, there is robust evidence that widespread use of some biofuels can lead to significant indirect greenhouse gas emissions through the process known as indirect land use change (ILUC). The UK takes the issue of ILUC seriously. Earlier this year we published research on the scale of ILUC impacts and we are continuing to lead work on how to tackle these as well as encouraging the European Commission to address this issue on a Europe-wide scale with a robust solution. I have written to the European Commission twice, expressing the government’s concerns regarding ILUC and pressing for robust and proportionate action to be taken to address the impacts of ILUC.

There are concerns regarding the best use and deployment of biofuels. These concerns also extend to the issue of best use of biomass across all sectors. Since our consultations on the RED and FQD opened, the Committee on Climate Change has published advice on renewable energy. The government is now considering this advice and awaiting the Committee’s further advice on the best use of bioenergy across all sectors. Further evidence will also be drawn from the results of the Department’s research into the best use of biofuels across transport modes and the department’s call for evidence on the future of aviation policy: Developing a sustainable framework for UK aviation: Scoping document. In addition, the government is working in a cross-departmental way to develop a bioenergy strategy which will look at the use of sustainable bioenergy across transport, heat and power as well as the impacts on other sectors.

The results of these reports and studies will establish a robust evidence base. When we have this evidence we will set biofuel targets beyond those set out to 2014 under the current Renewable Transport Fuel Obligation (RTFO).

On the other hand, in response to those who have called for biofuel targets to be scrapped entirely, we continue to be of the view that there is a place for sustainable biofuels in our wider policy on carbon reduction. The UK must, in law, comply with the RED. Biofuels will be a key component in the achievement of these targets before that work has been completed.

We will prioritise implementation of the RED over that of the related FQD in order to ensure that financial reward is no longer given to those biofuels that do not meet the RED sustainability criteria. Most of what will be delivered through the FQD will be delivered by the closely-related RED, which we expect to be implemented through an amended Renewable Transport Fuel Obligation in December 2011, subject to the Parliamentary process.

Our consultations on proposals to implement the RED and FQD revealed a number of concerns regarding expansion of the RTFO to include fuels use in non-road mobile machinery (NRMM). Industry has requested additional time to prepare for this and we are considering how best to achieve this change. As such, we do not propose to bring into force any expansion of the RTFO to include NRMM fuels before April 2013.

In addition there remains uncertainty regarding key implementing measures for the FQD, which are currently being discussed at the European level.

However, we do intend to introduce new regulations to transpose the FQD requirement to reduce emissions by 6% by 2020, alongside new annual reporting requirements for fossil fuels and biofuels. We will be working towards putting the necessary legislation in place as soon as possible during the course of 2012.

The response published today sets out our decision to fully transpose all the sustainability criteria set out in the RED to ensure that the UK only rewards the supply of sustainable biofuel. Until we have a more robust evidence base, we cannot confidently set biofuel targets beyond those established under the current RTFO.

I would like to thank all those who took the time to respond to these consultations.