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A Green Economy

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A Green Economy House of Commons Environmental Audit Committee A Green Economy Twelfth Report of Session 2010–12 Volume II Additional written evidence Ordered by the House of Commons to be published 30 April 2012 Published on 21 May 2012 by authority of the House of Commons London: The Stationery Office Limited The Environmental Audit Committee The Environmental Audit Committee is appointed by the House of Commons to consider to what extent the policies and programmes of government departments and non-departmental public bodies contribute to environmental protection and sustainable development; to audit their performance against such targets as may be set for them by Her Majesty’s Ministers; and to report thereon to the House. Current membership Joan Walley MP (Labour, Stoke-on-Trent North) (Chair) Peter Aldous MP (Conservative, Waveney) Richard Benyon MP (Conservative, Newbury) [ex-officio] Neil Carmichael MP (Conservative, Stroud) Martin Caton MP (Labour, Gower) Katy Clark MP (Labour, North Ayrshire and Arran) Zac Goldsmith MP (Conservative, Richmond Park) Mark Lazarowicz MP (Labour/Co-operative, Edinburgh North and Leith) Caroline Lucas MP (Green, Brighton Pavilion) Ian Murray MP (Labour, Edinburgh South) Sheryll Murray MP (Conservative, South East Cornwall) Caroline Nokes MP (Conservative, Romsey and Southampton North) Mr Mark Spencer MP (Conservative, Sherwood) Paul Uppal MP (Conservative, Wolverhampton South West) Dr Alan Whitehead MP (Labour, Southampton, Test) Simon Wright MP (Liberal Democrat, Norwich South) Powers The constitution and powers are set out in House of Commons Standing Orders, principally in SO No 152A. These are available on the internet via www.parliament.uk. Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/eacom. A list of Reports of the Committee in the present Parliament is at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in a printed volume. Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee are Simon Fiander (Clerk), Nicholas Beech (Second Clerk), Lee Nicholson (Committee Specialist), Andrew Wallace (Senior Committee Assistant), Anna Browning (Committee Assistant), and Nicholas Davies (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Environmental Audit Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6150; the Committee’s email address is [email protected] List of additional written evidence (published in Volume II on the Committee’s website www.parliament.uk/eacom) 1 Agri Energy Ev w1 2 BSW Timber Ltd Ev w3 3 Industry Council for Packaging and the Environment Ev w5 4 Carbon Tracker Initiative Ev w5 5 The Packaging Federation Ev w8 6 UK Sustainable Biodiesel Alliance Ev w11 7 National Federation of Roofing Contractors Ltd Ev w15 8 Woodland Trust Ev w17 9 RSPB Ev w22 10 Paul Appleby Ev w26 11 British Retail Consortium Ev w32 12 Public Interest Research Centre Ev w36 13 International Synergies Ltd Ev w40 14 John Lewis Partnership Ev w44 15 Wood Panel Industries Federation Ev w47 16 Institute for Learning Ev w49 17 Society of Motor Manufacturers and Traders Ev w50 18 Royal Academy of Engineering Ev w52 19 Microsoft Ev w54 20 Farming First Ev w57 21 Scottish Renewables Ev w63 22 PowerPerfector Ev w66 23 Institute of Ecology and Environmental Management Ev w68 24 EEVS Insight Ltd Ev w71 25 INEOS Ev w73 26 Environmental Treatment Concepts Ltd Ev w76 27 Gentoo Group Ltd Ev w80 28 Paul Crossley Ev w82 29 Carillion Energy Services Ev w82 30 Research Councils UK Ev w85 31 Northumbrian Water Group Ev w91 32 Office of the City Remembrancer City of London Corporation Ev w92 33 Office for National Statistics Ev w94 34 UK Sustainable Bio-Diesel Alliance Ev w99 35 Combined Heat and Power Association Ev w103 36 Imperial Centre for Energy Policy and Technology, Sussex Energy Group and UK Energy Research Centre Ev w106 37 Air Products Ev w113 cobber Pack: U PL: CWE1 [SO] Processed: [15-05-2012 12:17] Job: 018078 Unit: PG01 Environmental Audit Committee: Evidence Ev w1 Written evidence Written evidence submitted by Agri Energy 1.Introduction to Agri Energy 1.1 Agri Energy is one of the UK’s largest distributors of fresh cooking oil to the catering industry and is the largest collector of waste cooking oil, collecting from over 60,000 catering establishments in the UK. Agri Energy collects Used Cooking Oil (UCO) from food manufacturers and the retail and catering sectors, preventing it from being dumped illegally, and turns it into biodiesel for use as a renewable transport fuel. It has twelve depots across the UK, three bio-refineries capable of processing UCO into renewable bioliquid or biodiesel, and employs 350 people across the country. 1.2 Agri Energy has, in conjunction with its partners, been able to deliver a “closed loop” of sustainability which sees us deliver fresh cooking oil to our clients’ premises, then collect the waste oil and turn it into sustainable biodiesel which is then used to fuel captive fleets. One project in particular has seen a reduction of 9,429 tonnes of CO2 emissions per annum, as well as a saving of 5,000 road journeys through reverse logistics solutions. It has necessitated investment of £4.5 million and the creation of 40 full time jobs, and is exactly the sort of innovation that will be necessary if the Government is to meet its challenging targets for emissions reductions, renewable energy use and the creation of a green skills economy. 1.3 Agri Energy also offers a rapidly expanding Food Waste collection service for its customers. Food waste is taken for composting or as a feedstock for Anaerobic Digestors. Agri Energy is in the process of establishing its first Anaerobic Digestion plant. 1.4 Agri is fully supportive of the Government’s emphasis on the green economy and its commitment to ensuring that the renewables industry becomes an ever increasing part of the UK’s energy mix. 2. Summary 2.1 This paper sets out Agri’s submission to the Environmental Audit Select Committee’s inquiry into how the Government can remove the barriers preventing the transition to a green economy and create the conditions necessary for investment in low carbon skills and jobs in the renewable energy sector to flourish. It is comprised of four sections and makes recommendations on how the tax and regulatory regimes in each of the following areas can be reformed to encourage greater take up and investment of renewable energy: — The 20p fuel duty differential for sustainable biodiesel. — The 2,500 litre fuel duty derogation for biodiesel producers. — Bioliquids and the Renewable Heat Incentive. — Anaerobic Digestion. 2.2 Our submission to the inquiry makes the following policy recommendations: — The 20p fuel duty differential for biodiesel made from UCO should be extended beyond April 2012 to compensate for the inherent flaws in the Renewable Transport Fuels Obligation, and to ensure that the sustainable biodiesel industry retains a competitive price advantage against fossil fuels. — The 2,500 litre fuel duty derogation for biodiesel producers should be abolished as it has driven the creation of a large black market biodiesel industry and led to increased theft of raw materials. It also undermines investment and job creation by legitimate sustainable biodiesel producers by subjecting them to unfair competition. — The 0.5 ROC uplift for bioliquids in Combined Heat and Power should be abolished in favour of eligibility for the Renewable Heat Incentive. There also needs to be a greater appreciation within the Department for Energy and Climate Change (DECC) of the benefits of sustainable biofuels over those made from less desirable feedstocks. — A ban on food waste to landfill, with a two year grace period to allow the supply infrastructure to be put into place, would ensure that more waste is effectively diverted into Anaerobic Digestion. 3. The 20p Fuel Duty Differential for Sustainable Biodiesel 3.1 Biodiesel made from UCO is acknowledged to be one of the most sustainable transport fuels. As a waste product, UCO avoids the negative indirect land use impacts traditionally associated with biofuels and is one of the only truly sustainable feedstocks that can help meet the Government’s objective to increase the proportion of transport fuel made from renewable sources. 3.2 Figures from the Renewable Fuels Agency based on a life-cycle analysis suggest UCO can deliver emission reductions savings of 84%. Our own measurements using ISO 14064 show savings of at least 95% for biofuel production when the required heat and power is provided by CHP run on a bioliquid. This is higher than any other biofuel feedstock. Agri is proud of this achievement and acknowledges that it has only been made possible by the variety of support mechanisms offered by government. cobber Pack: U PL: CWE1 [E] Processed: [15-05-2012 12:17] Job: 018078 Unit: PG01 Ev w2 Environmental Audit Committee: Evidence 3.3 Biodiesel produced from UCO currently enjoys a 20p per litre fuel duty differential compared to regular diesel. This has been largely successful in promoting the use of waste derived bioliquids in transport fuel and ensuring that waste oil is not illegally poured down the drain. By creating stability and market certainty it has given investors the confidence to plan new projects, and the clear cost benefit has encouraged many large companies to switch their captive fleets to biodiesel. It has also helped drive waste collection and renewable energy creation, allowing businesses to research new conversion techniques and train employees in the green skills that will be required for future innovation.
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