Renewable Transport Fuel Obligations (Amendment) Order 2011

My Lords, the two great drivers—to use modern administrative jargon, as the Minister did—of our ruinously expensive renewable energy policy, which is still subscribed to by the leadership of both the Government and the Opposition in this country, are the Climate Change Act 2008—which, it was estimated by the Government of the time, will cost more than £400 billion by 2050—and the EU renewable energy directive of 2009. The Climate Change Act deals with emission reductions; the renewable energy directive provides for increasing proportions of used energy to come from renewable sources. Of course, renewable excludes nuclear. As was explained, under the directive the United Kingdom has a target of 15 per cent of its total energy and 10 per cent of its transport fuel to come from renewable sources by 2020. The renewable transport fuel obligation has been in place since 2008, and under it an increasing proportion of road transport fuel must take the form of biofuel. According to figures provided by the Department for Transport to the Merits Committee, this has now reached 3.1 per cent. This order amends the RTFO to bring into effect various requirements of the directive that were described by the Minister. In the various impact assessments provided with the amendment order, there is no assessment of the costs hitherto of the obligation. I find this to be a sorry omission and would be grateful if the Minister will in due course supply the figure. As the Explanatory Memorandum makes plain, supplying biofuels is more expensive than supplying fossil fuels. As to the expected costs of the amendment order over and above the costs of the order unamended, the Explanatory Memorandum offers an estimate of £324 million for the years 2012 to 2030. However, the overarching impact assessment states that the figure falls in the range of £100 million to £800 million. In other words, the Government have very little idea of what the cost will be. The amendment order will be popular with no one except the Greens. The Government state that of the 4,600 replies to the consultation from members of the public, the majority called for the biofuel targets to be scrapped. This is not surprising as the effect is to add to the cost to the motorist. Given that the Government have just felt the need to postpone an increase due in January on fuel duty amounting to an extra 2p a litre, they will not make their life any easier by increasing in this way the price of fuel. In the sustainability criteria impact assessment, it is assumed that the additional cost to the motorist will peak at 0.4p per litre in 2017 for diesel and 0.1p per litre for petrol. The assessment goes on to state that any further costs will be capped by the buyout price. However, this is set at 30p per litre. I wonder whether that is really the price at which the cost to the motorist will be capped. Perhaps I do not understand this and the Minister will explain how a buyout price set at that level will effectively cap the price to the motorist. One of the costs of this policy, therefore, is the greater expense of biofuel compared with fossil fuel, which is paid by the motorist. The other great cost results from the new competition that is artificially introduced for the use of arable land, which is paid for by food consumers world wide, with the poor obviously suffering most. It is now well established that the subsidy of biofuels pushes up food prices. Under the directive and this order, biofuels will need to be verified as passing certain sustainability criteria. They must not be sourced from high biodiversity areas, which in practice I take to be land largely under afforestation, or areas of high carbon stock, which I take to mean largely peatland. There is no mention in the order of preserving farmland or high-quality farmland for food production. However, it is our intention, by introducing the double credit for waste-produced biofuel, to relieve some of the demand for crop-based fuel. The impact assessment states: "““Increasing the share of waste-derived biofuels in the UK biofuel mix decreases the risk of biofuels contributing to increases in food prices …However, there is as yet no clear consensus on how to quantify and value any potential links between biofuel demand and food prices. Therefore any such possible impacts have been excluded from the analysis””." So here again we have only the vaguest idea about the cost of this order and of the RFTO. Have the Government any knowledge of the proportion of biofuel used hitherto or used today which has been derived from crops? If they have made such an assessment, or are aware of any assessment that has been made, that would give an indication of the acreage that has been given to these crops. Secondly, have the Government received any complaints about the efficiency of fuel containing mandatory biofuel? In conclusion, the renewable energy directive and the Climate Change Act are both used to buttress the international posture of this country and the rest of the European Union, while we forlornly seek to persuade other countries to follow us down the road of deindustrialising our economies. None is shaping up to do so. No country of significance seems to wish to adopt legally binding emission reduction targets: not the United States, China, India, Canada, Japan or Russia. They all have more sense and prefer economic growth. The loudest noise coming from the direction of Durban is likely to be made by the voices of developing countries as they call for more funds from the developed world to enable them to meet the targets we asked them to adopt—which is a diminishing prospect today. Nevertheless, we and the rest of the European Union stand quixotically alone, insanely trying and thankfully failing to lead the world in the practice of economic suicide. Eventually this policy will collapse around our heads—and the sooner the better.