Greener Road Transport Fuels

David Mowat Excerpts

Tuesday 15th October 2013 Westminster Hall

[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.

[John Pugh]

I think I might reserve the phrase “crime against humanity” for other things, but I recognise the impact. A number of third world charities believe that the net effect will further impoverish the third world and the areas that most need our help.

[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.

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[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.

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[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.

[David Mowat]

Will the hon. Gentleman give way?

[Richard Burden]

I will let the hon. Gentleman intervene one more time. I do not want this to become a dialogue.

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[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.

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[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.