Greener Road Transport Fuels
(10 years, 6 months ago)
Westminster HallRead Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
John Pugh (Southport) (LD)
It is a pleasure to serve under your chairmanship, Mr Weir, as always. It is also a delight to see the Minister after his recent preferment.
The debate might not be as well titled as possible, and if it fails to run its course, I urge all and sundry not to feel the obligation simply to fill up the time. Primarily, I want to talk about how we move around in a more environmentally sustainable way.
A passage from “The Hitchhiker’s Guide to the Galaxy” should be pinned up in the Department for Transport. It is the definition of a bypass or a new road, described as
“devices that allow some people to dash from point A to point B very fast while other people dash from point B to point A very fast. People living at…a point directly in between, are often given to wonder what’s so great about point A that so many people from point B are so keen to get there, and what’s so great about point B that so many people from point A are so keen to get there. They often wish that people would just once and for all work out where the hell they wanted to be.”
Mr Mike Weir (in the Chair)
As all the main protagonists are here, we can resume.
John Pugh
I assume that my hon. Friend the Member for Redcar (Ian Swales)will be joining us shortly, but I think we can be less concerned about the timing of the debate, thanks to that interruption, Mr Weir.
I was trying to make the point that the most environmentally sustainable thing to do is probably not to move around at all, but for most of us in the 21st century, the daily commute, the school run, the journey to work and so on, are likely to be part of our lives for some time to come. Everyone in the room is surely familiar with that, as they surely are, too, with the constant need to refuel the vehicles that they use.
Everyone with a conscience in these times, when they are standing in the forecourt, probably thinks of two things: they consider price, primarily, but they also think of pollution. The Government, reflecting voters’ views, think not only of pollution and price, but of one other thing: revenue. It has long been a Government axiom that they are prepared to sacrifice revenue to achieve an environmental effect, because we all recognise that individuals by themselves are unlikely to bring about major environmental change. A community problem has to be solved on a community basis.
The fundamental problem presented by our travelling—that is, apart from noise, disruption and the permanent possibility of accidental death—relates to air quality and emissions from vehicles. We can address that locally through things such as the congestion charge, which, in London, has been a great success in improving air quality, and in a small-scale way through pedestrianisation, but that does not, by itself, do anything about the cumulative national, international and global impacts of transport.
The obvious remedy—not the only obvious remedy, but certainly one of them—is to make fuel less polluting or to make less polluting fuels, and to persuade, or alternatively, to coerce drivers to use them. A number of alternatives are clamouring for our attention. This list is not complete, but I put down hydrogen, bioethanol, biofuels, biogas—anything beginning with “bio”—electricity and electric cars, liquefied petroleum gas and compressed natural gas. There are exotic alternatives, too: I am aware that my hon. Friend the Member for Birmingham, Yardley (John Hemming) runs his rather large car on chip fat, which is one of the more exotic possibilities. None of them, particularly chip fat, is wholly unproblematic.
I want to put the case for LPG, particularly, as the least problematic alternative and the most worthy of Government support. By support, I mean fiscal support, rather than support in the form of further research and so on. I do not think LPG, as a mode of propelling cars, needs any further research. It can obviously been made more efficient over time, but the technology is well understood and well implemented.
I would like briefly to deal with some other candidates and my reasons for sidelining them in this debate. I am sure that other colleagues will wish to do otherwise and will perhaps want to highlight them. On hydrogen briefly, I think that we have to put that aside. People talk of conspiracy theories about the influence of the oil industry; there have been a good number of stories going back decades about how any promising research into hydrogen propulsion has been sat on, bought up or, in some way, scotched by the oil industry. I do not know whether that is true, but even advocates of hydrogen as a fuel would probably acknowledge that it is not yet a mature, scalable technology. More research is needed, and I hope that the Government will engage with those who research in this field, even if they do not actively support it.
Biofuels are further down the track, but consideration of biofuels and their mandatory mixing with conventional fuels, or their use as a substitute for conventional fuels, leads us to a series of what appear to be complex debates. The obvious debate, held at length in the Daily Mail, is about whether they will add to transport costs. Another debate, particularly on the continent, is about whether they are compatible with all forms of engine development—I understand that the German car industry has reservations and has blocked progress at EU level. There are debates about whether they will threaten food security or raise food costs, and about whether they will have a detrimental effect on land use as land use changes.
Fiona O'Donnell (East Lothian) (Lab)
The hon. Gentleman said that there is a debate about whether biofuels can affect food security. I quote the report from the Select Committee on International Development, which said that
“the FAO, the OECD and the World Bank”
all agree and that it is rare for so many organisations to agree on a fact such as that biofuels are a threat to food security.
David Mowat (Warrington South) (Con)
Just to reinforce the point made by the hon. Member for East Lothian (Fiona O’Donnell), I think the United Nations has latterly described the use of wheat for petrol as a “crime against humanity”, which I think sums up where we are on that.
Graham Stringer (Blackley and Broughton) (Lab)
The hon. Gentleman rather skated over the issue of hydrogen-fuelled cars. I drove in such a car 10 years ago in Detroit. The technology is perfectly good. Does he agree that hydrogen suffers from exactly the same problem as biofuels, which is the source material, in that we must have land to grow source material from which to extract hydrogen?
John Pugh
I am sure that the hon. Gentleman understands hydrogen propulsion a lot better than I do; I hope he makes a contribution. I am betraying my ignorance here. I am just providing a preamble to what I hope will be a successful plea in favour of greater and more effective use of LPG. I do not in any way counter or dismiss the value of what the hon. Gentleman said.
David Mowat
I think hydrogen technology works extremely well, but the issue is that hydrogen infrastructure does not exist anywhere. Some countries have tried to develop hydrogen infrastructure; Iceland is an example. The difficulty is that infrastructure exists for petrol cars but not for hydrogen. That is what will stop the use of hydrogen.
John Pugh
I am certainly surrounded by people who are far more learned than myself in the field, but I shall have the temerity to continue.
Even if the biofuels issue has moved on to the discussion of what are called second generation biofuels, where people talk about not using virgin land or crops but municipal waste and algae, technical questions about the reliability of supply remain, particularly if whole-scale, mandatory use in other fuels is considered an option. I am simply pointing out that there are problems, and I think hon. Members’ interventions have helped me to illustrate precisely that point.
In some ways, electric cars seem a perfect solution, until one considers the production costs, which are currently high. There are issues with the battery, such as its weight, life and endurance, and with how the electricity itself is produced; the electricity might not have been produced in a carbon-neutral way. There is also the issue of flexibility of use, which I think is well understood by anyone who considers the topic for a second or two: what happens when battery life is exhausted?
I recognise that electric motors can be made to become more efficient; that battery technology can be increased; and that we can have charging points across the country—in fact, grants are, I believe, available at the moment and points are appearing—but there is still some way to go. One of my constituents, who died over the weekend, had been progressing with the Department for Business, Innovation and Skills some new development that would make electric motors a lot more efficient and batteries a lot more effective. Developments will be made in that field, but my best guess—this is borne out by conversations that I have had with the motor industry—is that despite Government investment and considerable Government enthusiasm, from some Ministers at any rate, electric cars will probably remain a niche market, extending only as the use of hybrids becomes more popular.
Even were electric cars to take off for the motorist, we will not see electric buses, unless we call them trams, and to be fair, the electric lorry is some way off. Lorries necessarily travel long distances, and the cost of that and the weight of carrying batteries to enable them to do that would probably be wholly prohibitive for quite some time to come.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
Does my hon. Friend agree that one of the greatest challenges to the roll-out of electric vehicles is addressing what is called range anxiety, where drivers are worried that they will, like the Duracell rabbit, run out of power in an unfortunate place?
John Pugh
Yes. I think that, to some extent, the worry is misplaced. I think the range is greater than people imagine, but that underlying anxiety makes it difficult to sell purely electric cars, as opposed to hybrid cars; it is a lot harder ask of the consumer. In any case, when it comes to value for the consumer, electric cars are head to head with the new generation of the ever more efficient and quieter diesels. Looking at what is happening with car market sales, one can see the result. However, even with lower emissions, more diesels clocking more miles in bigger cars, which is what we seem to be seeing at the moment, will not significantly reduce the nation’s carbon footprint in the long term.
In the short term, there is also the added complication of more particulates being released into the air, which could have some negative short-term effects on people’s health. Some particulates are carcinogenic, and certainly none of them are particularly good for people’s respiratory system. Some people say that air pollution at the moment, particularly from diesels, is as dangerous as passive smoking. That brings me to LPG and CNG.
LPG creates fewer emissions—15% less than petrol and 40% less than diesel. It has no production problems; we make LPG vehicles in this country. Sadly, they are mostly left-hand-drive and exported, but they are made in large numbers in this country. It is a mature technology. It is being scaled up throughout the continent, and we have in place a distribution network—something like 14,000 points minimum, with most of the major supermarkets providing an obvious port of call for people.
An LPG vehicle can be easily converted—at the flick of a switch—to a petrol vehicle without detriment to its engine or its performance. However, when we look at what is happening with LPG in this country, we see stagnation, with very limited production. Granted, there are some post-production adaptations, but even when we think about that, it is a Catch-22 situation.
I have looked into the issue. I own two old cars, both of them about 16 or 17 years old. Both have fairly large engines, are quite expensive and could benefit from being converted. However, the cost of conversion probably now exceeds the cost of purchasing both cars, so someone in that sort of situation is unlikely to do so. The real issue with an older car is that, having done the expensive conversion, can anyone guarantee that the car will not fail in some other respect?
Equally, if someone is thinking about converting a new car, which makes an awful lot of sense over the lifetime of the car, they will run into issues regarding the guarantee on the car and its servicing. The garage from where the car was bought may not be happy to deal with it once it has been converted. The guarantee and service issues are enough to deflect all but the most determined purchaser.
Either way, there is a problem. The solution is for us to produce and use more LPG vehicles, but we are going backwards here. If anyone looks at the second-hand LPG market, as I have, they will find second-hand Vectras and Astras, but those cars are about seven or eight years old—vintage—simply because cars of that sort are not being produced for the UK market anymore. However, Opel, which is virtually the same company, is producing the Opel Adam, a new LPG car, as a brand leader. We therefore have the phenomenon where, in an allegedly not-so-developed country such as Turkey, there is a 20% uptake of LPG, while in England, the figure is 0.5%.
If the situation is poor with cars, it is probably worse with freight, where the whole-life cost of lorries—lorries are surprisingly expensive—have to be factored in by hauliers. In terms of cost per mile, it would benefit an enormous number of hauliers to convert, as long as they can predict the cost over a period, but to do so, they must have some sort of guarantee that the financial environment that they are in will remain somewhat similar.
We can see how a change in the financial environment has made a difference. At one time in the north-west, quite a few LPG buses were running around—they were very clean indeed—but changes in the bus grant and the subsidy bus companies got on their diesel simply destroyed the network, and firms such as Arriva rapidly withdrew from providing them. Initially, I thought it was an issue of reliability and so on, but that turned out not to be the case.
That is the problem. We have a solution, a partial solution or an off-the-shelf solution, which we can implement now, but we are not making any headway, while the rest of Europe is. Why is that the case? Given that we have a solution—it is not the sole solution, and it may not be the long-term solution, but we can do something appreciable to reduce emissions—why has it not been implemented? I think that it is because the Government are not creating a sufficiently certain economic environment.
It is often said that two things in life are certain: death and taxes. The problem is that taxes to provide fiscal environmental incentives are not that certain. There is a differential between LPG and petrol, but it is agreed annually. When the Government are pressed by Members to do more, they respond with a formula—it is in the debate pack—that goes something like this:
“The Chancellor keeps…under review and takes into account all relevant fiscal and economic impacts when taking decisions.”—[Official Report, 13 November 2012; Vol. 553, c. 176W.]
On the face of it, that sounds rational, until we recognise that long-term investment requires at least medium-term predictability. My worry is that, without predictability, many green technologies are destined to tread water. That is not speculation; we just need to compare the UK with other parts of Europe and to look at what happens there. The empirical evidence is clear: where there is a more far-sighted, more determined fiscal climate, LPG and, I dare say, other forms of green transport expand.
I can understand the Treasury view—it is anal, it is perhaps sound accountancy and it is prudent—but it is self-evidently a lousy business strategy, and it simply has to be challenged. When I raised the issue during the passage of the Finance Bill, the Treasury Minister—he is now the Financial Secretary to the Treasury, and I am assured that he is going places—replied:
“I hope he will understand that the Government need to balance the provision of certainty with the ability to respond to economic and fiscal developments. We can provide a degree of certainty…but I hope he”—
that is me—
“will take into account that there needs to be a certain degree of fiscal flexibility.”––[Official Report, Finance Public Bill Committee, 13 June 2013; c. 526-27.]
I appreciate that, but if there is such uncertainty, it prevents consumers, councils and businesses from thinking ahead and doing energy deals over many years. What is to prevent the Treasury from making a decision on the differential that contains caveats to protect against unpredictable, massive future volatility?
An agreement could be established that gives the Treasury some comfort and investors in LPG who would like to invest further some confidence that they will get some return on their investment. Is it not better to try to achieve that outcome than to have what we have at the moment, which is a fiscal incentive that, if the facts are to be believed, does not act as much of an incentive? If that incentive was working, I simply would not be here. There is no point in me or the Treasury acting in a wholly futile way. If the incentive does not do the job, we have to look at it again.
We need critical mass if LPG is to be the force it might be. Members can probably recall a time when diesels lacked critical mass. They were associated, particularly in the passenger car market, with clouds of black smoke, noisy, rattling engines and slow acceleration. The tipping point came when one neighbour could look at the shiny car in the other’s drive, discuss it with them and find that the car, which did not appear to be belching black smoke or rattling, was actually a diesel. As a result, diesels took off to a great extent in this country. The same can happen with LPG, but we still have some way to go.
In 2005, all the political parties talked about Mondeo man. I actually live next door to him, in so far as my neighbour has bought a P registration LPG Mondeo estate on eBay for a modest price. He swears by its reliability and economy, and he gets a huge mileage. He has found a rare pearl and an unusual buy, because there are not many cars like that.
For many people, it would be desirable to have a vehicle that is reliable, economical to run and environmentally less bad than a diesel, but that simply will not happen until two things come about. First, the Department for Transport needs to listen a bit harder to the industry, and I hope this new Minister has an open mind and will listen. However, he has a bigger task: to ensure the Treasury listens much harder to the Department for Transport.
Fiona O'Donnell (East Lothian) (Lab)
I congratulate the hon. Member for Southport (John Pugh) on securing the debate. I do not know whether he is aware of this, but it is particularly appropriate that we should be having this discussion today, given that the European Council will vote tomorrow on the extremely important issue of the cap on the use of food products in biofuels.
There are two main reasons why I wanted to attend the debate. The hon. Gentleman gave us an incredibly wide-ranging and well informed opening speech. He touched on air quality, and findings published today show that poor air quality can contribute to low birth weight. There is, therefore, still much to discover. However, that is not what I wanted to speak about.
My first main reason for wanting to speak is that I tabled a parliamentary question to the Department for Transport, which was due for answer yesterday. I thought I might be able to elicit an answer by turning up in person today. What representations have the Government made among other members of the EU in relation to the UK’s support for the 5% cap? I do not do this often, but I want to praise the Government for their support for that cap.
I also want to speak as a member of the International Development Committee, which recently published a report on food insecurity. We found that biofuels were a major contributor to food insecurity across the globe and especially in developing countries. In his opening remarks, the hon. Gentleman said their net effect would be to further impoverish the world, but we spoke in far stronger terms in our report, and we are not alone in doing so.
I am talking not just about the usual NGOs, which campaigned on biofuels during the recent IF campaign—I am sure the hon. Gentleman often wore the wristband and took part in photo opportunities, and he possibly responded to constituents in support of that campaign. A key part of it was to call on countries to act on biofuels and, in particular, to seize the opportunity to act in the EU.
When the Committee took evidence, however, it was disappointing that the Under-Secretary of State for International Development said that biofuels were not an issue the Government were engaging in at the G8 level. The issue needs to be pushed up the agenda, because the current situation is a shame. At one evidence session, however, we had encouraging evidence from the then Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker). He expressed his enthusiasm for algae-based biofuels. Some people might say, “Get a life”, but I thought it was very encouraging.
The hon. Member for Southport also talked about using waste cooking oil; we have until 2020 to meet our EU targets for biofuels use, and I urge the Government to invest more and to consider more alternative sources of biofuels that do not use food-based products. It is not only a question of using food; land and water are also used, and in developing countries those are scarce and vital resources.
I have come here with not just two reasons for speaking, but millions. There are millions of people in developing countries whose lives are put at risk by the rush for land on which to grow biofuels. Unfortunately, in developing countries where the law about registration and ownership of land is not too strict, it is all too easy for land to be grabbed and used for biofuels production.
The Select Committee report found that there was an increased risk of hunger, and that between 25 million and 135 million more people might suffer hunger, in Africa alone, as a result of the world’s efforts to produce more biofuels. There is also a worrying link between food prices and energy prices. We know all too well in this country how volatile energy prices are, and anything that links food and energy prices is a reason for concern.
I should welcome reassurance from the Minister about what the Government are doing at EU level to campaign on the issue. We need to think about the price rises I mentioned. There are competing claims, but we found in our evidence that prices for oil seed could rise by 20%, those for vegetable oil by 36% and those for maize by 22%. As the hon. Member for Warrington South (David Mowat) mentioned in an intervention, wheat prices could rise by 13% by 2020. We know what food insecurity means in this country, but at least here we have enough food—it is just that people do not have the money to buy it. In the developing world, there is a huge threat to food production.
I hope that my speech has been short and to the point, and that in addition to dealing with the many issues that the hon. Member for Southport raised, the Minister will take the time to talk about food insecurity in developing countries. There can be no issue more important.
Ian Swales (Redcar) (LD)
It is a pleasure to speak in the debate. I congratulate my hon. Friend the Member for Southport (John Pugh) on securing it and giving it an imaginative title, which allows us to range over the subject with abandon.
There is an important distinction between greener transport fuels and making transport greener, and I think that my hon. Friend made several points about the latter issue. There is no doubt that vehicle manufacturers and many others, such as fuel manufacturers, have contributed to an enormous reduction in the amount of fuel used for road transport. The car that I drive gets more than 60 miles to the gallon, which would have been unthinkable when I was tinkering with cars in my early 20s. We have heard about the possibility of switching fuels, but although liquefied petroleum gas may reduce fuel use, it is, as its name suggests, a fossil fuel.
I want to talk about fuels that I think of as greener than fossil fuels. There are three basic sources: liquids, gases and electricity. The important thing is to think about where they come from, and many contributions today have been about that. As my hon. Friend said, there are many sources of electricity, and some could well be more polluting than putting petrol in the car. For example, electricity may be generated in a coal-fired power station, then go down a line with the associated line losses, and into a car that is plugged in, but that is an incredibly inefficient way to fuel a vehicle.
An important point about electric cars is where the electricity comes from. Just last week a car went all the way across Australia entirely on solar power. Unfortunately, we do not have the weather here to see that as a long-term solution, but at least it proved that it is technically possible. The journey was 2,000 miles in six days, so that was pretty good mileage. Electricity is clearly an option for greener fuel.
There are gas possibilities, of which hydrogen is the most obvious. The subject is bedevilled by different views of science, statements from NGOs and so on. In an intervention, hydrogen was linked to crops, but the biggest source of hydrogen in my constituency is the ethylene cracker. Plastics are made by extracting hydrogen from gases, essentially, and there is a hydrogen surplus in Teesside, which comes entirely from the petrochemical industry—not from crops at all.
There are many sources of hydrogen, and the most likely one in future is surplus electricity from renewable electricity generation. It is technically fairly simple to use surplus electricity from wind turbines, for example, to generate hydrogen, which could become fuel for vehicles. There are many technical possibilities for hydrogen generation, without necessarily using crops. Hydrogen is an incredibly powerful fuel.
It is an amazing fact that splitting a water molecule into hydrogen and oxygen gives the fuel that sent rockets to the moon. It is necessary only to recombine them, and that can send rockets into space; it is the perfect fuel because it produces water again as a by-product. Hydrogen must be on the long list of future fuels for that reason, if no other.
There are many liquid biofuels, some more controversial than others. One is used cooking oil, which my hon. Friend the Member for Birmingham, Yardley (John Hemming) is keen on. That is clearly a good environmental use for oil that would otherwise be thrown away. However, the amount of what is called used cooking oil throughout Europe is many times the amount actually used for cooking.
Imports of palm and other oils, which the hon. Member for East Lothian (Fiona O'Donnell) mentioned, are driven partly by the market for so-called used cooking oil. A great deal of policing of the source of the material is needed, because there are loopholes and many traders who run rings round the industry. Equally, however, many small-scale collection facilities produce fuel, and they have a role in the future.
I want to talk now about crop-based biofuels. I must declare an interest, because Europe’s largest bioethanol plant is in my constituency. I challenge the idea that we can have either food or fuel. We are still paying farmers in this country not to grow things—including 6 million tonnes of sugar beet, which is potentially a fuel for a bioethanol plant. The idea that the issue is all about land does not always stand up to examination. There are many political, economic and agricultural reasons why there are food shortages in the world, and, when overall world land use is considered, land is quite far down the list. Perhaps that is controversial.
Mr Goodwill
The hon. Gentleman should be aware that the current EU set-aside requirement is zero. When land is set aside it is usually, currently, because of some environmental arrangement that the farmer has entered into. The amount of set-aside in the UK is dramatically less than it was 10 years ago.
Ian Swales
I thank the Minister for that response. I recognise his special expertise in this area.
I want to talk about the sustainability of the bioethanol made in my constituency. It is made from animal-feed wheat, not human-grade wheat, and at the other end we get three products: bioethanol; carbon dioxide, which is captured for use in the food and drink industry in a separate plant; and crucially, high-grade animal feed. All the protein in the wheat ends up in high-grade animal feed, which is highly prized in the agricultural industry, to the point that there are times when those at the plant tell me that it is an animal feed plant with a bioethanol by-product, rather than a bioethanol plant with an animal feed by-product.
The high-protein animal feed replaces imports mostly from South America, mostly based on soya and mostly grown on former rainforest land. Far from being unsustainable, that high-grade animal feed, a by-product of the bioethanol business, is in effect replacing the use of rainforests in South America. A cradle-to-grave view of the sustainability of all greener fuels needs to be taken, because there are an awful lot of misconceptions about how some of the businesses work.
Mr Goodwill
My hon. Friend will be aware that the by-product from those plants is suitable only as ruminant feed. Much of the grain in South America is produced to fuel the chicken and pork industries, which seems to be the big demand in the developing world.
Ian Swales
I recognise that the Minister has a special expertise, but I know that there is demand in the marketplace for the feeds, which form only part of the overall mix. Having enjoyed the product of a ruminant in my cup of tea earlier this afternoon, I know that they have a place in the final food chain.
David Mowat
I am not totally certain that I understood the thrust of what was said about rainforests. Was the point being made that it is good to convert rainforest into soya for use in transport?
Ian Swales
No, absolutely not. My point was that the high-grade, high-protein animal feed, which the by-product feed replaces, is typically grown in South America, so the by-product feed reduces the demand for soya-based proteins, mostly from South America. There is a green chain. The situation is not as simple as people say.
The Government have had a policy for putting biofuels into both diesel and petrol for years. Starting with diesel, they set the targets and people invested large amounts in chemical plant, but all the early investors went bust because the Government kept moving the goal posts—surprise, surprise, the same has happened with bioethanol. The £300 million that people invested in the plant in my constituency has largely gone and the plant recently changed hands for a lower price. Why? Because the Government have not delivered on the renewable transport fuel obligations they said they would when the investment case was originally made.
The hon. Member for Southport mentioned an important point: we need certainty for green technologies. If we are asking people to invest large amounts of capital, we cannot keep changing our minds. Changing one’s mind leads to an industry heavily dependent on imports of green products. Unless we give investors certainty about the goal posts and the environment into which they invest, they will not invest anymore. Most of the early investors in such technologies have done badly and that is mostly due to Government policy.
For the same reasons, we need to ensure at EU level that targets for the proportions of biofuel in diesel and petrol are separate. If we allow an overall target and let oil companies play games over how much biofuel they put into each one on any given day, the people who have invested heavily in capital plant will have years of feast and years of famine, as the oil companies play their games, and will eventually exit the market. Again, traders will be left to pick up the pieces.
Graham Stringer
The hon. Gentleman is making an interesting speech and I have learnt a lot from it. Is not the fundamental point of what he is saying that in asking the Government to pick one technology over another, we are asking them to pick winners? History shows us that the Government are much better at picking losers than winners.
Rather than the Government’s picking winners and choosing where to put subsidies, would it not be better for them to switch some of the subsidies currently going into the energy industry—there is a huge debate about that at the moment—into research, so that we can move on to the next generation of renewable technologies, which the market will support?
Ian Swales
The hon. Gentleman makes a good point. I have told many potential investors in the industry that we cannot expect the Government to make winners. As at a roulette table, they will put their chips on lots of different numbers, but having made policy on, for example, the proportion of petrol that should come from bio-sources, they cannot change it when people are putting in hundreds of millions of pounds. By the way, those biofuels do not get a subsidy; all they need is a market that is understood and left to prosper. I agree with his point, but at some stage we must not so much pick winners, as set the environment for particular sectors of the market to thrive.
Ian Swales
That is a good point. The Government have a key role, because they are never out of the market, due to the environment they set and the rules they put in place. They are players, whether they like it or not.
We need to look constantly at the science behind the issues and not simply listen to the last non-governmental organisation we spoke to. Sustainability needs to be looked at from cradle to grave, and there is a lot of devil in that detail, such as the materials used to make a car battery for an electric car. We need to police systems, because once we put rules in place, there are usually lots of people working on the best way to get round them and maximise their take. We need to ensure that we are not naive about the systems we put in place. We need big thinking.
One of my concerns is that we need five Ministers to respond to the debate: one from the Department for Business, Innovation and Skills; one from the Department of Energy and Climate Change; one from the Treasury; one from the Department for Environment, Food and Rural Affairs; and one from the Department for Transport, who I am sure—no pressure—will speak for all the others. The issues typically cross those five Departments, a fact that I know the Government recognise. They have put a high-level team in place, but we need not just high-level thinking, but high-level action to ensure we get a consistent view, over, for example, the value of waste and where it is best used.
Finally, I congratulate the Minister on his new role. I am sure that, having listened to the debate, he is wondering whether he did the right thing in accepting the job. I hope he will give us the clarity we all seek.
Richard Burden (Birmingham, Northfield) (Lab)
It is a pleasure to serve under your chairmanship, Mr Weir. When do you want to call the Minister?
Mr Mike Weir (in the Chair)
We finish at 4.22, so you can split the time among yourselves.
Richard Burden
I will not go on for the sake of it. This is the second debate of the day for the new Minister and me in Westminster Hall, so we are starting as we mean to go on. I congratulate the hon. Member for Southport (John Pugh) on securing the debate. We have heard important contributions from my hon. Friend the Member for East Lothian (Fiona O’Donnell) and the hon. Member for Redcar (Ian Swales) and we have had important interventions from the hon. Member for Warrington South (David Mowat) and my hon. Friend the Member for Blackley and Broughton (Graham Stringer).
When he introduced the debate, the hon. Member for Southport quoted from “The Hitchhiker’s Guide to the Galaxy” on getting from A to B. Given the importance of what we are talking about and the seriousness of the consequences if we do not effectively tackle climate change, I was put in mind of a different quote from that book:
“For instance, on the planet Earth, man had always assumed that he was more intelligent than dolphins because he had achieved so much—the wheel, New York, wars and so on—whilst all the dolphins had ever done was muck about in the water having a good time. But conversely, the dolphins had always believed that they were far more intelligent than man—for precisely the same reasons.”
On the challenge of climate change, that makes a very good point.
Cutting emissions and tackling greenhouse gases is not simply a question of tackling the transport end of the equation, but transport is obviously central to the issue. We are talking about transport still accounting for more than a fifth of the UK’s CO2 emissions, with 97% of that coming from cars alone. That is why the European Council of Ministers debate on achieving the EU target of 40% was important. I understand that the time scale has now slipped. Originally, the proposal was for 2020, and, as a result of the latest decision, it is now 2024. I understand the UK voted for that longer time scale. Can the Minister confirm whether that is the case when he sums up the debate?
In the UK, we have ambitious targets to reach 1.7 million electric vehicles by 2020 and to ensure that all vehicles are ultra-low emission by 2050. Today we are not debating whether the transport sector needs to change, but what reforms are needed. I have had the privilege of chairing the all-party motor group for several years. It is a position I will have to give up now that I am in my current role. However, I know that great work has been pioneered in this country by the Automotive Council, in conjunction with organisations such as the Office for Low Emission Vehicles.
The hon. Member for Redcar might be right that we need five Ministers in a debate such as this, although the thought scares me a little, but one of the great things about OLEV is that it has started to bring together cross-departmental working. We could learn from that in other sectors. The Automotive Council and OLEV have both been important in ensuring that the UK is doing all that it can to promote innovation, development and the take-up of low-carbon transport. I am particularly proud of the Automotive Council, which was an initiative of the Labour Government. I am pleased that the success achieved by the council has meant that it has been continued by the current Government.
David Mowat
On the point about electric cars, does the hon. Gentleman accept the point that was made earlier? Given that 70% of our electricity is produced from fossil fuels—most of that from coal—electric cars are actually less carbon-friendly than petroleum cars at the moment, and will be for some considerable time.
Richard Burden
The point that we cannot simply measure emissions and the impact on the environment by looking at what comes out of the tailpipe is absolutely right. We do need to look at the whole-life question, and that includes questions of energy generation and where it comes from and so on. I would not go as far as the hon. Gentleman and conclude that electric cars are less environmentally friendly than petrol cars. It depends what we are talking about and what the circumstances are.
David Mowat
That is true, but in terms of carbon production, it is arithmetically inevitable that if we produce electricity from coal and then use that electricity to make a car go, with the losses that take place in each of those stages, we will use more carbon. I am not saying there are not other benefits, but the carbon is worse.
Richard Burden
There are all sorts of issues. The hon. Gentleman makes an assumption that the electricity is generated from coal. It is clearly the case that coal is an important part of the energy mix, but it is not the only one. The debate is about how we achieve the right kind of balance to ensure that, as far as our road transport is concerned, it contributes as best it can to combating carbon emissions; and not only carbon emissions, but some of the other emissions that the hon. Member for Southport talked about.
Richard Burden
I will let the hon. Gentleman intervene one more time. I do not want this to become a dialogue.
David Mowat
I will make one final point. Of course it depends on where the electricity comes from, and sometime soon we might have more carbon-free nuclear at a scale that will enable electric cars to be carbon-friendly. However, at the moment, 75% of our electricity—this is broadly true of the rest of Europe as well—comes from fossil fuels. Until that changes, electric cars are a net worsener of the use of carbon. I will leave it at that.
Richard Burden
This is perhaps to be continued another time. I will simply repeat that, in fairness, the equation is not as simple as that. However, it is the case that we need to green our road transport in this country. As we do that and talk about the options, it is important that we all live in the real world, ensuring that the policies we adopt, whatever they might be, do not worsen the cost of living crisis that is hitting so many people at the moment. My constituents know that the Government might be patting themselves on the back in relation to fuel duty. The fact that VAT went up to 20% in 2011 has also been part of the mix as far as their cost of living is concerned, because that created a long-lasting impact on them as well. However, I do not want to dwell on that.
I want to ask the Minister to cover a few points in relation to alternative fuels and the action that is needed to promote lower emissions in different parts; issues to do with the recharging network; and other ways that the Government could promote behaviour change to cut transport emissions and protect the planet.
First, I want to address biofuels. The hon. Member for Southport raised important concerns. Indeed, my hon. Friend the Member for East Lothian talked about the important work of the International Development Committee on this subject. I know it is important work. Not only was I chairing the all-party motor group until recently, but I was also a member of the International Development Committee as well. Important evidence was given to the Committee on the impact of agriculturally produced biofuels and the impact that they have on food prices and food security. That is why I am pleased that, as far as the European Union is concerned, there has been a recent vote to cut the number of food crops used to produce biofuels. However—perhaps the Minister can confirm whether I am right—we are now not talking about a 5% limit, but a 6% limit. The target was watered down. Sadly, the Conservative members of the European Parliament contributed to that watering down.
Will the Minister confirm whether I am right about the 5% or 6% target and the change there? What is the Government’s view? Would they have preferred a 5% target? Without wanting him to jump across too many departmental areas, what does the Minister think of the recommendation mentioned by my hon. Friend who sits on the International Development Committee, that the UK revise its domestic renewable transport fuel obligation to exclude agriculturally produced biofuels completely?
If the Government still want to be the greenest one ever, as I understand they are still saying, it is important that they set out their position on biofuels as regards not only how they affect food crops, which we have already discussed, but how in practice we can distinguish between different kinds of biofuels in relation to both their sourcing and how they are produced. I would not go as far as the hon. Member for Redcar on some of the points he made, but different biofuels have different impacts, and it is important for Government policy that such distinctions are made.
The hon. Member for Southport rightly stated that we need to look at the issues of liquefied petroleum gas and compressed natural gas. I will not repeat what he said, other than to make two points. First, I recognise that LPG and CNG still need to be part of the mix, and will stay part of the mix for some considerable time, so the questions he asked deserve answers from the Minister. Secondly, to repeat what my hon. Friend the Member for Blackley and Broughton said, although decisions have to be made on fiscal incentives or disincentives for particular fuels, we must be careful to respond to the important point made by the Automotive Council and everybody else, which is not to try to pick winners, but to try to be technology-neutral in principle and to see what works. I hope that the Minister will answer the important questions asked by the hon. Member for Southport.
The promotion of low-carbon transport goes much further than such questions; it is also about the development of low-carbon technologies to provide a context for the use of different fuels, and how the progress already being made on petrol and diesel engines—they will remain part of our car and commercial vehicle fleet for a long time yet—can be sustained. That is why I welcome the work of the Office for Low Emission Vehicles, and its document, “Driving the Future Today: A strategy for ultra low emission vehicles in the UK”. I want the Minister to set out the Government’s thinking on some of the issues raised by that report.
On the demand side—assuming that electric vehicles will be an important part of the mix for the future—a recent Institute for Public Policy Research report showed that demand for those vehicles in the UK has recently fallen behind most other European countries and the United States, despite the innovation and leadership shown by the UK automotive industry. When Labour was in power, we took the important step of providing grant incentives for purchasers of low-emission vehicles, and I am pleased that this Government remain committed to that. However, the first bullet point in OLEV’s vision in its document is the need to develop a
“buoyant domestic fleet and private markets for ULEVs”—
ultra-low emission vehicles—which means demonstrating their economic benefits by tackling high up-front costs and dispelling misconceptions about their performance.
Are the Government committed to the continuation of plug-in car grants, and does the Minister accept that the Government could do more by leading by example? They could use their procurement processes more imaginatively to ensure that the switch to ULEVs spreads across the public sector, and they could consider how to maintain and provide aftercare for those vehicles to help promote local jobs and local industries, as well as the development of local skills. In a way, the Government car fleet could both buy British and support the ULEV agenda.
On infrastructure, the Government have now departed from what they originally said about having a national recharging network for electric vehicles, and instead favour what they describe as home and workplace recharging. However, OLEV has stated that that means supporting a network of charge points in homes, residential streets, railway stations and public sector car parks, which sounds a bit like a recharging network to me. OLEV has said that £37 million is available to help to roll out the infrastructure until 2015, which I welcome, but what does the Minister expect the £37 million to achieve, and how far short will it fall of what OLEV thinks is needed?
OLEV has emphasised the importance of the energy companies in delivering a step change towards having ULEVs, from providing a smarter electricity grid supported by new tariff structures through to using plug-in vehicles themselves as distributed energy stores that might even feed electricity back to the grid at peak times. Do the Government have any plans to achieve such innovative ideas in practice? Does not such a point suggest the need for a much more proactive regulatory framework for the energy companies?
I certainly welcome the UK H2 Mobility project to stimulate the take-up of hydrogen-powered vehicles, which are a bit closer to reality than the hon. Member for Southport said. We still need to know the level of infrastructure that the Government think will be required for the scale shift of cars to hydrogen fuel cells, the time scales that are envisaged and the mechanism that will be put in place to achieve what the Government want.
In relation to automotive capability, the OLEV strategy rightly underlines the importance of the Automotive Council’s work, which I have already mentioned. Such developments as the recent announcement of an advanced propulsion centre are certainly welcome, as is the competition launched with a £10 million prize for the development of long-life battery production.
There are still questions, however, about whether UK companies, particularly small and medium-sized enterprises, will benefit from the shift to ULEVs through the promotion of jobs and employment in the UK. Research for the Society of Motor Manufacturers and Traders by KPMG recently underlined the barriers faced by companies that have the flair, but too seldom the opportunity, to development their ideas and bring them to market. All too often, there are still difficulties in accessing affordable finance. The report estimated that UK companies are not securing about £3 billion-worth of opportunities for the automotive supply chain in the UK.
The Minister knows that the industry, in the form of the Automotive Council, is demanding more assertive Government action, so what will he do to press his Treasury colleagues to respond more effectively? As the skills agenda is also important to achieving our objectives, what discussions does he intend to have with the Secretary of State for Education to bring an end to the rather toffee-nosed valuing of traditional academic achievement over vocational achievement in this country?
The shift towards ULEVs is not only an environmental necessity for the future of our planet. In “Driving the Future Today”, OLEV has stated that the transition to such vehicles
“represents a once in a lifetime industrial opportunity for the UK automotive sector if it successfully positions itself in the vanguard of this new technology—delivering jobs and growth for decades to come.”
That is why the industry and consumers look to the Government to match their words with actions on such issues.
Finally, in considering greener fuels, it is important to remember that while H2 powers hydrogen vehicles, O2 powers human vehicles. I therefore hope that the Minister will set out some of the practical actions that he and the Government intend to achieve to ensure that another part of the ultra-low carbon mix of transport in this country involves measures to encourage cycling and walking as part of that agenda.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
I am pleased, Mr Weir, to be here today. I congratulate the hon. Member for Southport (John Pugh) on securing this debate. He touches on a key issue for my new Department, which is how we can build a low-carbon transport system for the 21st century. Let me briefly mention my own interest in this, which was alluded to by the hon. Member for Redcar (Ian Swales). As a farmer, I produce wheat. Indeed two loads of it went to the Hull plant last year to produce bioethanol. I must admit to feeling guilty when I saw perfectly good wheat, which could be used for animal feed or biscuits, going to produce ethanol, so I was reassured to hear from the hon. Gentleman that the residue is not wasted but used as a ruminant feed.
Although I am new to this role, I am not new to the issue or the subjects raised in today’s debate. Way back in 2008, I was fortunate to be called by Mr Speaker to ask a question of the then Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), who I understand is still a Member of this House, about the impact of biofuels on food production. My interest in the issue remains to this day. The question I asked went something like this: is it better to put ethanol in a Range Rover’s tank or food in an African child’s stomach? I must say I did get quite a good answer from the then Prime Minister. Before that, I was a Member of the European Parliament and served on the environment committee as a deputy co-ordinator for the European People’s Party group and was involved in much of the European legislation that we are using now to clean up our vehicle fleet and the atmosphere.
Many hon. Members will have seen the recent UN report on the latest science of climate change, which clearly reveals the costs of failing to address the dangers of climate change. The Government are committed to building a low-carbon energy system that avoids such risks, and transport must play its part in the challenge.
Transport accounts for around a quarter of UK carbon emissions, and the share is rising. It is essential that we act now to reduce the impact of transport on our environment. Last month, the Government published their strategy for electric vehicles, which is a key element of our plan for a low-carbon transport system. The Government’s vision is that by 2050 almost every car in the UK will be an ultra-low emission vehicle. As well as cutting carbon, electric cars have the potential to reduce our reliance on foreign energy imports and to clean up the air in our towns and cities.
The Government are determined to seize this opportunity, and to place the UK at the forefront of the design, development and manufacture of ultra-low emission vehicles, and I am sure that we will work with the Automotive Council to do just that.
Ian Swales
Does the Minister feel that his colleagues in the Department of Energy and Climate Change, who are worried about the lights going out this winter, are factoring into their work on future power generation the electrical demand that he is talking about?
Mr Goodwill
Yes, I am sure they are. I am concerned that one means of addressing the range anxiety problem is to have fast-charge cars. Electric cars work well when they are charged overnight with renewable energy or nuclear energy, but once we start fast-charging cars at filling stations, we will have a major problem not only with generation capacity but with the grid’s ability to carry that amount of electricity.
However, not all modes of transport can be easily electrified. Aviation and heavy goods vehicles are likely to continue to require liquid fuels for decades to come. It is therefore essential that we develop the technologies to produce low-carbon liquid fuels.
Biofuels are renewable transport fuels created from organic matter and offer one way of creating low-carbon fuels. However, biofuels—and bioenergy more generally— also present complex challenges. Last year, the Government published a strategy for bioenergy, which recognised its important role in allowing the UK to meet its climate change objectives. It concluded that by using bioenergy, we could cut the costs of decarbonising the UK by £44 billion.
Fiona O’Donnell
I thank the Minister for giving way and take the opportunity to welcome him to his new role. Does he agree with his predecessor, the Minister of State, Home Department, the hon. Member for Lewes (Norman Baker), who has perhaps gone to a better place now, that some forms of biofuels are worse for the environment than fossil fuels?
Mr Goodwill
I have seen analysis of some of the bioethanol produced in the United States which indicates that that is the case. I will comment on the particular impact of fuels as I make progress in my speech.
The Government published a strategy on bioenergy, which concluded that by using bioenergy we could cut the cost of decarbonising the UK by £44 billion. Other reports have estimated that the biomass industry could provide 50,000 jobs. There are clear opportunities for the UK in the global race for growth driven by science and innovation, and it is an industry that we need to develop. However, the strategy also made it clear that bioenergy had its risks. If it is not managed properly, bioenergy can actually increase greenhouse gas emissions and put at risk key objectives such as food security. It is therefore essential that we proceed with care and develop systems that use bioenergy only where it is genuinely sustainable.
We have already taken important steps on the path to genuinely sustainable biofuels. In 2008, the Renewable Transport Fuels Obligation was established. For the first time, biofuel was required to be blended into road transport fuel. In 2011, the UK introduced mandatory sustainability criteria to the RTFO. Those changes meant that biofuels could no longer be sourced from areas of high biodiversity, such as rainforests or wetlands. In 2011, we also saw the introduction of double rewards for advanced biofuels, also referred to in this debate as second generation biofuels, and biofuels made from waste. Such changes have led to encouraging trends in the fuels supplied under the RTFO. The average carbon savings of biofuel supplied under the RTFO when compared with fossil fuel have increased from 46% in 2008 to around 68% in the latest statistics.
One example of the feedstocks behind this trend is used cooking oil. The hon. Member for Southport may be aware of the Olleco biodiesel plant in Bootle, which is the country’s largest purpose-built plant dedicated to producing biodiesel from used cooking oil, and is not too far from his Merseyside constituency.
David Mowat
The Minister makes the point about how these things are alternatives to fossil fuels, but does he accept that not all fossil fuels have the same amount of carbon? If we were to replace petrol with gas or liquefied natural gas cars, as opposed to liquefied petroleum gas cars—there are 15 million LNG cars in the world and 3 million in Pakistan—we would halve the amount of carbon being produced from the transport sector. That technology exists already. I repeat the point that I made to the shadow Minister that electric cars are not a panacea for as long as we continue to produce the electricity from fossil fuels, particularly coal.
Mr Goodwill
My hon. Friend is absolutely right. Methane, or biogas, is CH4, so for every molecule of carbon dioxide produced there are four molecules of water, so it is a big improvement over fossil fuels such as LPG.
John Pugh
I was not aware of the cooking oil development plant in Bootle, but I was once the leader of Sefton council, which covered Bootle. The major environmental issue that we had was the strange smell that used to permeate households in the area, and that was regarded in those days as an environmental hazard. This environment is a complicated thing to deal with.
Mr Goodwill
Indeed. We have a big chip factory in my constituency, which occasionally has the same effect. Used cooking oil offers carbon savings of around 80% compared with those produced by fossil fuel, and the latest data suggest that last year around a third of biofuels supplied in the UK came from used cooking oil. We are very much on the case of ensuring that used cooking oil is indeed used cooking oil, and the Department is currently monitoring the situation closely because of the allegations that have been flying around. Certainly, the UK should not be criticised in that regard.
There is still more to do to ensure the sustainability of biofuels. In particular, we are concerned about the impact of indirect land use change. Studies have demonstrated that, due to ILUC, some otherwise sustainably produced biofuels can end up causing greater carbon emissions than fossil fuels.
Fiona O’Donnell
The Minister is being very generous in giving way again. Does he not agree that that perhaps is what the hon. Member for Redcar (Ian Swales) missed in his contribution—while the products that may be used in his constituency are not fit for human consumption, they still use up valuable resources of land and water?
Mr Goodwill
The issue of displacement—the ILUC situation—is one that we are well aware of. It tends to be more of a problem with biodiesel than with bioethanol, but it is an issue that we need to address through negotiations and agreements at the European level.
The European targets that the UK has agreed to are legally binding. Therefore, the UK needs to work within the European framework to produce a biofuel policy that reduces the environmental and social impacts of biofuels. As part of this process, it is imperative that ILUC is properly addressed at European level. Negotiations are ongoing in Europe, and we are pressing for an ambitious outcome to the ILUC situation. The 5% figure is certainly the figure that we are negotiating towards.
As we have heard in the debate, there are also concerns about the impact of biofuels on food prices. Food versus fuel is an issue that I take very seriously. The primary goal of agriculture should remain food production, and the production of biomass must not undermine food security or increase food prices. It is accepted that increased demand for biofuel has played a role, but Government analysis has shown that although increased global crop prices have resulted from biofuel production there has only been a modest rise in food prices.
I must point out at this stage that there is only 10p worth of wheat in a loaf of bread anyway, so there are many other factors that come—oh dear, I have mentioned that I am a farmer again. However, I recognise the seriousness of even a small impact on food prices, as well as the potential for biofuel support policies to increase crop price volatility. Nevertheless, I am confident that our position on the ILUC negotiations, if it is successful in limiting crop-based biofuels and incentivising those produced from wastes and residues, should reduce the direct competition for food feedstocks.
I will turn now to advanced fuels. Resolving the issue of ILUC remains the main barrier to setting out the clear pathway to achieving our 2020 targets, which I know industry and investors need. However, in the meantime we can set out some markers for the longer-term path to more sustainable biofuels. That is likely to be achieved through the use of non-land-using feedstocks, such as agricultural residues and municipal waste. However, use of these feedstocks requires advanced conversion processes that have not yet been commercialised. These processes are an exciting technology, which can turn unwanted waste products into valuable transport fuel. A number of countries have already established production facilities for these advanced biofuels, although there are none as yet in the UK. However, with the UK’s world-class research capabilities we have the potential to become a global player in this sector.
That is why earlier this year the Government announced a £25 million competition for an advanced biofuel demonstration contest, which aims to deliver up to three demonstration-scale advanced biofuel plants in the UK. Later this year, we will also be announcing a call for evidence on advanced fuels. We will invite industry’s views on what more the Government should be doing to develop these essential technologies, which will be needed long into the future to allow us to reduce the carbon footprint of road travel and, increasingly, other transport sectors.
However, not all non-land-using biofuels rely on advanced technologies. For example, biomethane made from waste demonstrates some of the highest carbon savings of any biofuel, and the technology for its production is well understood. Indeed, I visited a BMW car plant in the United States, which was powered by biofuel from a nearby waste dump.
Ian Swales
May I ask the Minister a question about a detail in his speech? He mentioned “other transport sectors”. It is already technically possible for biokerosene to fuel aircraft. Some aircraft have flown—including, I believe, a Virgin aircraft—powered purely by biokerosene. Will the Government do anything about aircraft fuels?
Mr Goodwill
I will not digress too far into the area of aircraft but we certainly need to ensure that the quality of aircraft fuels is consistent, and currently we do not put biofuel into aviation kerosene for safety reasons. However, more research could lead to some progress in that area.
Biomethane represents a particularly compelling opportunity for heavy goods vehicles, which have few other options for decarbonisation. Biomethane currently represents less than 1% of renewable transport fuel, so there is clear potential to expand its contribution to reducing emissions in the UK. However, biomethane cannot be used in transport without the vehicles that are able to use it, and there are currently fewer than 1,000 natural gas vehicles in the UK. The Government are supporting the early uptake of gas-fuelled vehicles through the low-carbon truck demonstration trial. This £11 million project to trial low-carbon trucks and supporting infrastructure will support almost 350 natural gas trucks.
I am aware of industry concerns about the adequacy of incentives for the use of biomethane in transport, particularly when compared with other Government support schemes for the use of biomethane in electricity and heat. These issues will be considered as part of our forthcoming call for evidence, and we will then be in a position to propose the changes that we think will be needed to the RTFO in order to strike the best balance of incentives. With luck, we will then be able to introduce those incentives alongside agreed European proposals to address ILUC.
I turn now to some of the points made in the debate. I again welcome the shadow Minister, the hon. Member for Birmingham, Northfield (Richard Burden), to his role. In many ways, we are on the same page. The renewable energy directive targets are still in place for 2020; under those targets, 10% of transport energy will be renewable. I am sure that he will be pleased to know that those targets have not changed as a result of our recent negotiations.
The hon. Member for Southport raised the issue of liquefied natural gas, which is the same as methane or biogas. As a transport fuel, natural gas has lower carbon emissions than diesel; it produces about 15% lower emissions. Natural gas also diversifies our fuel supply, increasing energy security, and it can improve local air quality. In addition, natural gas benefits from a lower duty rate than diesel. I should point out that matters regarding duty rates should be addressed to the Chancellor of the Exchequer.
Liquefied petroleum gas vehicles have some environmental benefits. On a lifecycle basis, LPG vehicles produce about 14% less carbon dioxide than petrol vehicles do. However, LPG is not as good as diesel. LPG cars deliver similar air quality emissions to petrol cars, and better air quality emissions than diesel, although the gap has narrowed with the introduction of Euro 5 and Euro 6 cars.
The hon. Member for East Lothian (Fiona O’Donnell) asked about the 5% food crop cap. I hope that I have reassured her that we are sticking with that, and we have certainly made it clear to the European Commission, the European Parliament and all other member states in the Council of the European Union that the UK supports the 5% cap.
Fiona O’Donnell
Can I press the Minister further and ask what discussions he has had with the German Government, who would be key to gaining support for the 5% cap?
Mr Goodwill
I met my German opposite number in Luxembourg last Thursday. Although the discussion did not veer into that area, I am sure that we will have a good working relationship with the Germans. Of course, the Germans are currently in the process of forming a new Government, so I look forward to hopefully meeting my new colleague, or perhaps his replacement if there are changes to the Government. The hon. Lady is absolutely right—Germany is key to almost everything in Europe, and we certainly have a very good working relationship with our colleagues from the German Federal Republic.
Regarding electric vehicles, the point was made that the market for them is very much a niche one. We are happy with the take-up of ultra-low emission vehicles. We are working across Government with the industry and we have introduced a range of ambitious measures to make the UK a premier global market for these vehicles.
My hon. Friend the Member for Warrington South (David Mowat) made a point about the energy mix in terms of electricity generation. It is the case that electric cars—ultra-low emission vehicles—already produce lower emissions than conventional vehicles, and as the grid decarbonises their environmental performance will improve further. I am keen to see more renewable energy being produced, not least off the coast of my constituency. Also, as a keen fan of nuclear power, I know that we can use the electricity that nuclear power produces at night-time to trickle charge electric vehicles.
I was asked whether the Government are committed to plug-in car grants. We have announced £500 million of support for the period from 2015 to 2021, and shortly we will launch a call for evidence to inform how we will achieve the best value for that investment.
The issue of hydrogen was raised. The Government launched the UK H2 Mobility project in 2012, which was a joint undertaking with industry. The project will evaluate the potential for hydrogen as a fuel, developing an action plan for a roll-out to consumers from next year if the evaluation is successful.
I think that I have responded to most of the points that were made in the debate. If I have missed some points, I apologise and I will certainly write to respond to them, as time is pressing now.
To conclude, I thank everyone who has contributed to this debate for taking the time to consider this important issue. The use of biofuels and non-conventional fuels is, and will remain, complex and controversial. However, that must not stop us from finding the right balance between producing the fuels we need for a low-carbon future and protecting the livelihoods of the most vulnerable, both here and in the developing world.