The Parliamentary Under-Secretary of State for Transport ()
I beg to move,
That the Committee has considered the draft Renewable Transport
Fuel Obligations (Amendment) Order 2021.
It is a pleasure to serve under your chairmanship for the first
time, Mr Stringer. The instrument amends the Renewable Transport
Fuel Obligations Order 2007, which established a certificate
trading scheme known as the renewable transport fuel obligation.
The RTFO promotes a market for renewable fuels and places
obligations on larger suppliers of fossil fuels to ensure the
supply of renewable fuels. Since 2018, that main obligation has
included a sub-target supporting the uptake of development fuels.
Development fuels are made from sustainable wastes or renewable
energy. They deliver higher carbon reductions than traditional
biofuels, and include fuels of strategic importance such as
aviation fuels, drop-in fuels and renewable hydrogen. The amount
of renewable fuel, including development fuel, to be supplied
under the obligation is calculated as a percentage of the volume
of fossil fuels supplied in a calendar year. Those obligations
are met by acquiring certificates that are awarded for the supply
of sustainable renewable fuels. The trade of those certificates
provides a revenue stream for suppliers of renewable fuels.
The draft instrument delivers several commitments made in our
transport decarbonisation plan, which was published in July. It
increases the main RTFO obligation level from 9.6% to 14.6% by
2032, continuing at that level in subsequent years, and makes a
corresponding change to the development fuel sub-target, ensuring
that it is not reduced in absolute terms. The instrument further
expands RTFO support for suppliers of renewable hydrogen. It does
so by extending certificate eligibility to renewable hydrogen
used in maritime vessels and in fuel cell-powered rail and
non-road vehicles. Importantly, as targets for the supply of
renewable fuels increase, this instrument further strengthens the
sustainability and greenhouse gas emissions savings criteria that
renewable fuels must meet.
The changes made by this instrument will make an important
contribution to achieving UK carbon budgets. As we transition to
zero-emission vehicles, we cannot ignore carbon emissions from
conventional road vehicles, and increasing the supply of
renewable fuels is the best abatement option for many such
vehicles. Those low-carbon fuels will increasingly be required in
the aviation and maritime sectors. The increase in targets for
the supply of renewable fuels in this instrument can deliver
carbon reductions quickly, and will provide investor certainty.
Expanding eligibility for renewable hydrogen used in maritime and
fuel-cell vehicles is an important transitional step, which will
encourage the innovation needed to increase deployment of
low-carbon fuels in transport sectors that are more challenging
to decarbonise.
This instrument is a small part of the wider work that we are
undertaking to drive down carbon emissions from liquid and
gaseous fuels. Work is progressing at pace to consider further
RTFO support for hydrogen, building on the summer consultation.
That work includes better supporting hydrogen production plants
located away from sources of renewable energy. We will respond
with further proposals on the treatment of hydrogen under the
RTFO early next year. Similarly, it is our intention to make
recycled carbon fuels eligible for support under the RTFO scheme,
once primary legislation is secured.
Recycled carbon fuels could play an important role in
decarbonising aviation, supporting the aim set out in our net
zero strategy to become a leader in sustainable aviation fuel.
The net zero strategy contained £180 million of new funding to
accelerate the commercialisation of UK SAF production and our
ambition for 10% SAF to be blended into
UK aviation fuel by 2030.
Beyond 2030, we are developing a long-term strategy for
low-carbon fuels to meet decarbonisation challenges across
transport sectors. The strategy, to be published next year, will
set out the likely transition from road to other transport
sectors, and examine the size of the opportunity for UK industry
and the ways in which Government policies could support these
changes.
In the here and now, it is worth noting that the RTFO delivers
around a third of the savings required for the UK’s current
transport budget. In 2020, the RTFO scheme saved carbon emissions
equivalent to taking 2.5 million combustion-engine-powered cars
off the road. The changes in this instrument are estimated to
deliver carbon reductions equivalent to the removal of an
additional 1.5 million cars from the road by 2032.
This instrument builds on the success of the RTFO scheme and is
an important part of our future work to decarbonise transport. I
commend this statutory instrument to the Committee.
18:06:00
(Wythenshawe and Sale East)
(Lab)
It is a pleasure to serve under your chairmanship, Mr Stringer.
In 35 years of knowing you, that is the first time I have
referred to you as Mr Stringer. I have referred to you as many
other things during that 35 years, but they may not be for the
public record.
I put on record that the Chairman and I were together on Thursday
night to mark the retirement after 25 years of Councillor Sir
Richard Leese, the leader of Manchester City Council, but it must
be remembered that Manchester’s renaissance, which gained pace
under Sir Richard, was started by the Chairman when he was leader
of Manchester City Council for 12 years.
The Chair
You are drifting out of order.
That marks nearly 40 years of continuous leadership by two
politicians. I am eternally grateful to the Chairman for taking
me under his wing as a very young councillor in the great city of
Manchester. Okay, I have embarrassed you enough, Mr Stringer.
The statutory instrument amends the renewable transport fuel
obligations order 2007, as the Minister rightly said, and will
help further to increase carbon savings by increasing renewable
fuel targets and expanding the renewable transport fuel
obligations to sectors with limited alternatives to decarbonise,
such as maritime.
While we welcome the SI, it does not go far enough. We need to be
doing much more radical things if we are to decarbonise the
transport sector. The covid-19 pandemic has dominated headlines,
but we cannot forget that we are still in a climate emergency and
that green, efficient transport is the future. As transport is
now the largest contributing sector to UK emissions, it is worth
reinforcing the need to reinvest in our communities and offer
true levelling up across the regions. We needed a radical plan to
decarbonise and get polluting vehicles off our streets, but what
did we get in the autumn spending review? A cut to air passenger
duty for domestic flights, a devasting announcement on HS2 and
the abandonment of most of Northern Powerhouse Rail. That will
not take 1.5 million cars off our northern roads any time
soon.
The UK hydrogen strategy, which the Minister mentioned,
identifies transport as the key early market for hydrogen in the
2020s. While the new policy plans outline long-term frameworks
for business models, these will not come into effect until
2024-25. The Government’s offering ranges from absolutely zero to
nowhere near enough, and every shade of not much in between. The
Government’s unambitious approach to something that we all know
and agree is vital to our future should be a major concern for us
all.
Internationally, Governments are investing billions in
alternative fuel markets. For example, Germany has invested €9
billion in its hydrogen markets and France has invested €7
billion, whereas our Government are under-investing and hoping to
stimulate private investment through smaller targeted funds. If
the UK were to invest properly in research, technology and
infrastructure, we could truly become world-leading in this
technology. For instance, Hamburg port alone is investing £100
million in decarbonising itself. The Government here have
announced a fund for £20 million for the whole country for a
competition. It really is not good enough.
There are a couple of areas where the Government have not gone
far enough and are examples of why we are struggling to offer
support. The Government have announced that they will ban the
sale of new petrol and diesel vehicles in 2030—a policy with
which we agree, as it was our policy too. However, there is no
commitment to phase out the sale of second-hand vehicles. Another
example of something for which the Opposition have been calling
for some time is the formal inclusion of international aviation
and shipping emissions in future carbon budgets; however, we
still need to see detailed, specific plans on how those sectors
will be decarbonised. As I said, all the efforts are being
undermined by plans to cut air passenger duty on domestic
flights.
You and I, Mr Stringer, represent a city that started the
industrial revolution and saw the beginning of the mass
extraction of fossil fuels to fund a new world order. It would be
great if we could have a commitment from Government that our
regions and great cities in the north will not only decarbonise
but grow wealth and jobs in those regions, and lead the world in
reversing what we started.
18:11:00
I thank the hon. Member for his interesting comments. The UK’s
sixth carbon budget requires a reduction in emissions of 78% by
2035 compared with 1990 levels. That will require rapid action
across the economy, supported by technological innovation. The
changes in the instrument to expand the support currently
provided by the RTFO for renewable hydrogen and to foster that
innovation send a clear message for future low-carbon fuel
investments. The increase in the RTFO obligation by 5% to 2032 is
beyond ambitious. It is also necessary to reduce the
environmental impact of conventional vehicles that use petrol and
diesel. It is achievable, based on the availability of
sustainable feedstocks, and it is widely supported by fuel
suppliers, including suppliers of fossil fuels that would be
obligated.
With the ongoing support of the RTFO, the UK fuel sector can play
its part in helping to drive the UK’s transition to net zero and
the green jobs that it will bring. The hon. Member referred to a
number of measures that he would like to see. I remind him that,
as we set out in our transport decarbonisation plan this July, we
have made a commitment to phase out the sale of petrol and diesel
cars from 2030, and that all cars and vans will be zero emission
at the tailpipe from 2035. We have made a commitment on heavy
goods vehicles: 26 tonnes from 2035, and then larger vehicles
from 2040. We have set out our commitment for sustainable
aviation fuel: 10% by 2030. I think that he, and Members across
the Committee, would agree that we are making huge progress in
the decarbonisation of transport. I hope that the Committee will
join me in supporting the statutory instrument.
Question put and agreed to.
