We are now discussing the part of the Bill that concerns the emissions performance standard. By way of background, I thought it would be useful to recount where these provisions arise from. It was in response to the Kingsnorth demonstrations, which were a green group response to the threat of a new unabated coal plant being built by E.ON. At that time, climate change concerns meant that there was a great deal of public opposition to the idea that we would be locking ourselves into many decades of unabated coal if a new plant were to be built.
The then Labour Government responded with a new planning restriction that meant that all new coal plants would have to fit at least 300 megawatts of carbon capture and storage, essentially closing the door on unabated coal. The then Opposition stated that they would move to rule out new unabated coal through the introduction of an emissions performance standard. That was prompted in part by a visit by one of the shadow Ministers to California, which is one of a number of US states that already have emissions performance standards in place. When he became Prime Minister, David Cameron stated that he would legislate—he would put an EPS into an energy Bill—and
consultation on that began, in conjunction with the rest of the energy market reform package, in December 2010. Here we are today, talking about the detail of that proposal.
The Government did not get everything right in their first draft proposals. One loophole that was quickly identified was that the plan was to give exemptions to any plant fitting CCS. The fear was that this would mean that large plants could be built with only a small portion of the capacity being fitted with CCS. Representations were made. The Government did listen and have closed the loophole so CCS plants will now be caught by the EPS.
We have tabled a number of amendments concerning the EPS. This amendment addresses the concerns of the Carbon Capture & Storage Association. While accepting that plants with CCS will need to be compliant with the EPS, there is a fear that if the industry were required to meet those standards from day one, that would be unduly burdensome and could deter investors. The association has asked that a period of grace of three years be introduced during the commissioning and testing of the new plant, when there would be a derogation of the EPS. This amendment has been tabled to achieve that. We see that very much as part of a package of measures, in conjunction with the EPS. I will shortly talk to two more amendments that we support strongly, and I know that my noble friend Lord Hanworth is going to speak to his amendments too. There is much more to be said about the EPS, but this is a specific amendment and I beg to move.