14:30 Mrs Anne McGuire (Stirling) (Lab)

As the Minister knows full well from meetings with the industry and with the all-party group for the wood panel industry, of which I am chair, biomass is unlike any other major form of renewable energy because of the ongoing fuel costs involved and the potential for serious distortion of the wood market. I appreciate that the Government do not want to support all early adoption of renewable technologies. That is perfectly understandable, but I hope that the Minister recognises that the industry has an important contribution to make to renewable heat. If we do not get some resolution to the current situation, that important contribution will be jeopardised by subsidies to new entrants to the wood market, and by the arbitrary nature of the July 2009 cut-off date for installed installations.

I have to be frank with the Minister. The wood panel industry feels particularly aggrieved by the apparent lack of consideration given by the Department of Energy and Climate Change to its well-evidenced arguments about the impact of subsidised biomass demand on the UK wood market. I would, therefore, like the Minister to tell us why the wood industries are not even mentioned in the RHI impact assessment, despite the submission to his Department of data on timber prices and availability. The four paragraphs devoted to competition assessment make no mention of the wood market, which, as the Minister knows full well, will be the source of most of the biomass feedstock. There appears to be little point in conducting an impact assessment when adverse impacts that are clearly detailed to the Department are, apparently, studiously ignored. If assessments are not objective, who will trust them? I am sure that my all-party group colleagues who are here today can, like me, attest to the clarity of information and evidence that the Wood Panel Industries Federation has produced for the Department’s scrutiny.

I am not sure whether the Minister heard the recent BBC “Today” programme’s coverage of the RHI announcement. It picked up on the sustainability question: will biomass demand prove as unsustainable and environmentally damaging as biofuels? Roger Harrabin, the environmental analyst, raised the important issue of the double-counting of land when assessing potential biomass availability. That relates not just to the UK; it appears to be the case across Europe as well, where the combined biomass demand from EU member states, as declared in their national renewable energy plans, is just short of 1 billion tonnes of wood every year. That would require the total global harvest of wood to increase by a third. Does that sound sustainable?

The consultancy E4tech produced a report for DECC’s renewable energy strategy in 2009 that considered international biomass supply. E4tech concluded that the UK could import significant volumes of woody biomass to supply UK demand, but that import costs would remain high. It predicted that in 2010, all imported material would be more expensive than domestic wood, and would still be more expensive even by 2030. That was true in each of the four scenarios that the report used, from business as usual to high growth.

According to the Forestry Commission’s Biomass Energy Centre, direct CO 2 emissions from combustion of wood chips for electricity in a large-scale plant are more than five times as high as emissions from the combustion of hard coal. I acknowledge that life-cycle CO 2 emissions from large-scale wood-fired electricity production are considerably less than coal, but there is a considerable and crucial time lag, or carbon debt. It will be between 30 and 40 years before new plantings in coniferous temperate forests can reabsorb the carbon released through combustion. I represent a constituency with large forests—a landscape you will recognise, Mr Weir, as someone from Scotland—so I know that is not a short-term fix. In the short to medium term, new large-scale biomass plants will massively increase carbon emissions. If climate change is to be taken seriously, how can we be comfortable with such a perverse outcome?

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15:03 Susan Elan Jones (Clwyd South) (Lab)

Let me make it clear—this point has been previously made by hon. Members—that we recognise that what is happening is an unforeseen consequence and we also recognise the reasoning behind support for what was the fledging biomass industry. It is not our place to be critical of that. However, we recognise the reality of what is happening to the wood panel industry as a consequence of that position. Wood supply and the best use of wood have suffered in policy making because of the way those issues fall between three Departments—DEFRA, the Department of Energy and Climate Change and the Department for Communities and Local Government—and their respective agencies. I know that DEFRA is well aware of both the limits of domestic wood supply and the extreme inefficiency of burning wood purely for electricity. For example, it is worth noting that the Environment Agency’s report, “Biomass: Carbon Sink or Carbon Sinner,” explicitly calls for a

over electricity-only generation. DCLG certainly supports the use of wood products for construction as a low-carbon alternative to other materials, but the policies that will most affect how wood will be used are the most lucrative ones, namely renewable energy. That is partly because DECC is doing its level best to achieve extremely ambitious renewable energy targets.

“We do not expect significant quantities of prime timber to be diverted into energy as a result of the RHI. However, should evidence show that high grade timber is being diverted into heat use, and that turns out to be a perverse outcome from a greenhouse gas lifecycle perspective or causes concerns about deforestation, measures will be introduced to prevent it.”

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15:19 Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)

We have heard representations from hon. Members about the highly skilled jobs that the wood panel industry provides in their constituencies. Many of those are located in small rural communities that depend on the industry, so it is important that the Government take seriously the concerns expressed. Careful consideration needs to be taken of the effect that renewables subsidies are having on the wood industry. The Opposition want to encourage a sustainable energy mix, with renewables playing a significant role. We recognise that biomass will play an important part in our energy future, if we are to reduce our carbon emissions and meet our renewables targets. If produced sustainably and burned efficiently, biomass emits low levels of carbon. However, WPIF and hon. Members today have expressed their concerns about the efficiency of biomass plants. Improving the efficiency of biomass plants and ensuring that we have a sustainable energy mix will be key to ensuring our energy security and meeting our carbon reduction targets.

The Minister will know that, as we are discussing this matter, the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), and my hon. Friend the Member for Ogmore (Huw Irranca-Davies) are debating in Committee the draft Renewables Obligation (Amendment) Order 2011, which seeks to amend the sustainability criteria for biomass. The Government have considered several options, from doing nothing to several levels of new obligations in respect of sustainability. If passed, the measure will require all generators of solid biomass or gas over 50 kW to report against greenhouse gas emissions criteria and land use sustainability criteria. One notable exemption would be biomass generators wholly derived from waste. Many people and organisations have been calling for that clarity from Government.

What impact might that development have on the concerns raised by my right hon. Friend the Member for Stirling? In the 12-week consultation up to October 2010, which solicited 80 responses, were any representations made by the wood panel industry, and what was the gist of those representations? In the same order, the Minister has delayed implementing a requirement for biomass generators over 1 MW to comply with—as opposed to report against—greenhouse gas emissions and land use sustainability criteria, until closer to the intended start date for the requirement in 2013. That is to allow experience from reporting against the EU criteria to be taken into account before amending the renewables obligation. Will the Minister commit to take the intervening time to consult widely again? I stress “widely”, including specifically with the wood panel and associated industries to make sure their voice is heard.

As well as raising questions about how we produce our energy, today’s debate has highlighted serious questions about how the Government are making their decisions. As was said by my right hon. Friend the Member for Stirling and the hon. Member for Hexham (Guy Opperman), the Department for Energy and Climate Change did not consider the effect the renewable heat incentive would have on the wood panel industry in its RHI impact assessment. I hope that the Minister will say why that was the case, especially as the Department took so long to announce the RHI and much of the work had already been done by the previous Government.

The debate has highlighted the clear need for a serious strategy to protect our forests and to do all that we can to increase them. As the report “Combating Climate Change: A Role for UK Forests”, commissioned by the Forestry Commission, shows, if an extra 4% of the UK’s land were planted with new woodland over the next 40 years, it could reduce our national carbon emissions by 10% by 2050.

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15:27 The Minister of State, Department of Energy and Climate Change (Gregory Barker)

I look forward to meeting the right hon. Lady and going through those issues in more detail. Before I go into more substantive points about UK policy, may I also just echo the remarks made by the hon. Member for Liverpool, Wavertree and go on record to say that the UK welcomes 2011 as the international year of forests? This is an excellent opportunity to raise public awareness of the importance of forests—although I think that the coalition Government have done quite a good job of doing that already—and in tackling climate change, halting biodiversity loss and preserving the livelihoods of forest-dwelling peoples.

Forests have a dual role in helping us to reduce greenhouse gas emissions and to tackle climate change. First, forests act as carbon sinks, removing carbon dioxide through photosynthesis and storing it in plant and soil matter, but forests also contribute by providing wood for energy and renewable materials for construction and manufacturing, and reducing the use of fossil materials. However, deforestation is a very real risk that must be addressed. If the world’s growing demand for bio-energy and renewable materials were to lead to the clearing of forests, particularly primary forests, that would increase total global emissions dangerously and drive forward, rather than tackle, dangerous man-made climate change.

The hon. Member for Liverpool, Wavertree raised the issue of our clear ambition to be the greenest Government ever, which goes right to the heart of the coalition’s programme for Government. My right hon. Friend the Prime Minister has spelled that out on numerous occasions, but our ambitions go much further than our work to stop deforestation, critical though that is to us. We want to be a global leader in the world-wide transition to a low-carbon economy. We are committed to producing 15% of the UK’s energy from renewable sources by 2020, and to reducing our carbon emissions by 80% by 2050. Renewable energy, and bio-energy in particular, must play a very important role as we decarbonise our economy and seize opportunities to create new businesses, employment and long-term green prosperity in the UK.

Heat and electricity from biomass could provide nearly a third of UK needs from renewables by 2020, meeting approximately 4.5% of our overall energy demand. Bio-energy offers the rare benefit, for a renewable technology, of not being intermittent. It can generate electricity or heat on demand at any time of the day or night. The UK needs the flexibility and security that that supply brings. Moreover, bio-energy can provide significant new business and employment opportunities to the UK. For example, the expansion of biomass use in off-gas-grid areas of the UK will mean a growing order book for specialist boiler manufacturers, demand for new local businesses to provide installation and maintenance, and will create opportunities across the wood fuel supply production and distribution chain. Just last week, we set out a portfolio of major policies that will help us achieve that. Bio-energy will make a significant contribution to our decarbonisation plans, but that must not be at the expense of other jobs. I am very aware of unintended or perverse consequences and hon. Members present are perfectly entitled to raise those issues. We will work harder to look at the consequences for the wood panel industry. Many powerful arguments were made today, not least how it is better to lock up carbon rather than to burn it, and I am mindful of that.

We are introducing mandatory sustainability criteria to ensure that the biomass power generation supported by the renewables obligation is genuinely sustainable. From April, generators will be required to report to Ofgem on their performance against a target of 60% greenhouse gas emissions savings compared with fossil fuel use, and on land criteria. Following a transition phase, we intend to make those criteria mandatory from 2013 for all generators of 1 MW capacity and above. We expect that similar standards—again, mandatory sustainability criteria—will be introduced for biomass used for heat under the renewable heat incentive from 2013.

Another important area is the use of wet biomass residues, such as food waste, sewage and animal manure, that can be anaerobically digested to produce biogas, which can then be used to produce heat and electricity. The UK produces about 100 million tonnes of wet organic material that is suitable for treatment by AD. That includes up to 20 million tonnes of food waste from households and industry; 90 million tonnes of agriculture by-products, such as manure and slurry; and 1.7 million tonnes of sewage sludge. By diverting those wet organic wastes into energy, we can stop slurry surface water run-off polluting our rivers, reduce pressure on landfill sites, and avoid methane emissions, which are 23 times worse than those of CO 2 . The Government are working with the industry to draw up a joint programme to tackle the barriers to the deployment of AD. That will be published in May 2011. We are also looking at the feed-in tariff scheme to see whether the tariff rates are enough to make farm-based AD worthwhile.

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