Renewable Transport Fuel Obligations (Amendment) Order 2009

This is rather a sad moment. I think the Minister is aware that I have been involved in biofuels almost since the word was first spoken, but we are now in the most terrible mess and muddle, not least because the biofuel industry straddles four different ministries: Defra, BERR, the Department for Transport and, not least, the Treasury. I was a member of a "gang of four" who persuaded the noble Lord, Lord Whitty, to accept the principle of a renewable transport fuel obligation during the 2004 Energy Act. From early days we were trying to persuade the Government that a tax rebate for biofuels was essential. We did that because of the benefit to the UK economy in terms of opportunities for agriculture and manufacturing, and the contribution that renewable fuels could make to reducing the UK’s carbon emission. The oil companies were not going to use biofuels unless it was in their commercial interest to do so or they were forced to do so by legislation. Of course, it took European Union legislation in the form of the biofuels directive in 2003 for the Government to act decisively. Once their hand was forced, the Government introduced a fuel duty rebate of a rather miserly 20p per litre for biodiesel and bioethanol. Although that was not enough, it was at least a starting point. It soon became clear that this rebate would be insufficient for the UK to reach the targets it had agreed in the biofuels directive. Again, because the European Union forced them to look at policy by threatening infraction proceedings against the United Kingdom, the Government looked at introducing this original renewable transport fuel obligation. The decision to introduce the original RTFO was taken only because of the increase in oil prices, and not because the Government had any vision about how they would tackle rising carbon emissions in the road transport sector or interest in promoting the UK economy. Over all those years, the Government showed that they were supremely good at talking about the urgent need to take action to combat climate change, but the reality was that nothing was happening. Carbon emissions in the transport sector have risen 20 per cent in the past five years. It is very distressing. My noble kinsman referred to the Gallagher report. The Government were also good at producing endless consultations, but their record of taking decisions in these matters has been one of far too little and far too late. Less than a year into the life of the renewable transport fuel obligation, the Government want to change it—not to make the targets more stretching because we face catastrophic climate change, but to reduce them. Why should there be a reduction? I do not take on board all the points made by the Minister. The Government appear to be taking their orders from the green groups, which have found a brilliant way to raise their own income; namely, to produce scare stories about all biofuels and get the public to pay up. I know a little bit about what I am talking about here. It must be agreed that the Government have also made a mess of drafting their legislation. In the recent past, at no stage in the debate has any serious consideration been given by the Government to the fortunes of the United Kingdom and the missed opportunity for economic activity, particularly during this time of recession. UK agriculture is about to contribute to reducing carbon in the transport sector, not by starving anyone, but by increasing production and productivity. The record of UK agriculture has been exemplary over the past few decades—I declare an interest as a farmer who grows oilseed rape for biofuel production—and has risen to the challenge of feeding us all. I feel certain that the farming community will rise to this new challenge of providing fuel. According to the Government’s Renewable Fuels Agency, the UK biofuels sector produces biofuels with the highest sustainability scores. It delivers greenhouse gas savings of 69 per cent compared to the fossil fuel average of 42 per cent and 99 per cent meet environmental sustainability standards. Why therefore do we not encourage the sector to do more? Instead, we stop them by reducing these targets and we punish them further by making them pay for the Government’s mistake. No biofuel manufacturer will invest any more money in what has in many cases been an absolute disaster due to no help at all from the Government. I fear that once again Britain will lose out in this emerging market, which would be a terrible shame.