Renewable Heat Incentive launch set for next Spring

Solar thermal is one of the most affordable renewable technologies and the Solar Trade Association is looking forward to boom time.

Details of the domestic Renewable Heat Incentive (RHI) and related tariff levels have been announced by the Department of Energy and Climate Change (DECC), but anticipated news about the future of the non-domestic RHI has been postponed.

The domestic RHI will launch next Spring. As has always been promised, anyone who has installed a system since 15 July 2009 can claim retrospectively, as long as they meet the Microgeneration Certification Scheme (MCS) standards that applied at the time of installation.

DECC has confirmed the tariff levels for all four eligible technologies. These will be:

• Flat plate and evacuated tube solar thermal panels: at least 19.2p/kWh


• Ground (and water) source heat pumps: 18.8p/kWh


• Air to water heat pumps : 7.3p/kWh


• Biomass-only boilers and biomass pellet stoves with back boilers: 12.2p/kWh.

Payments will be made on a quarterly basis over a period of seven years. Householders who have already received vouchers under the Renewable Heat Premium Payment scheme will be transferred to the RHI and have their value deducted from their RHI payments.

Applicants will need to complete a Green Deal assessment to reduce their energy demand to a certain level in order to qualify for the payments.

Private landlords and providers of social housing will be able to apply for a property or properties that they own (provided they own the heating system). The landlord will receive the RHI payments.

For Local Authorities who use Arm’s Length Managed Organisations (ALMOs) to manage their properties, the application must come from the owner of the heating system.

New build properties will not be eligible for the scheme. The Renewable Energy Association said this "reinforces the need for the government to set demanding carbon compliance standards in the 2013 revision of the Building Regulations Part L, due for imminent release by DCLG".

People will not be able to claim for more than one space heating renewable heating system in the same property, with the exception of installations of solar thermal and another eligible technology.

Climate change minister, Greg Barker, said: “Investing for the long term in new renewable heat technologies will mean cleaner energy and cheaper bills. So this package of measures is a big step forward in our drive to get innovative renewable heating kit in our homes.

“Householders can now invest in a range of exciting heating technologies knowing how much the tariff will be for different renewable heat technologies and benefit from the clean green heat produced. We are also sending a clear signal to industry that the coalition is 110% committed to boosting and sustaining growth in this sector.”

DECC gives an example of what an installer might receive, in the case of a biomass boiler which might cost, say, £8,000 to install. In a year, the estimated heat use could be around 15,000kWh, which, at a 12.2p/kWh tariff, would result in a payment of £1,830. This would mean it might pay for itself in around five years.

New installations of biomass systems will need to meet air quality standards in relation to particulate matter (PM) and oxides of nitrogen (NOx).

Ofgem will be responsible for administering the scheme when it launches.

The RHI is funded directly from Government spending and has been given annual budgets. There are worries that, as with the payments for Feed-in Tarriff PV systems, they might unexpectedly decrease in the future. DECC will make an announcement on this around the time of the launch.

The news was welcomed by trade body the Heating & Hotwater Industry Council, whose director, Roger Webb, said: “it gives the industry confidence to invest in renewable heating products helping to protect and create jobs. We would of course like the tariffs to be higher but we understand the difficulty of introducing a government funded scheme in the current economic climate," he added.

"We will also be urging DECC to monitor uptake and if necessary to increase tariffs if they are not driving up product sales.”

Stuart Elmes, Chair of the Solar Trade Association's solar thermal working group, called the announcement “a massive boost for the solar thermal market. The value of this incentive is on a whole new level, there’s nothing like it anywhere in the world. From now on people can install solar heating with confidence that their system will be able to join the RHI scheme, and knowing what their payments will be worth.”

Solar thermal is one of the most affordable renewable technologies for homeowners, with a typical system costing around £4,500. This includes the replacement of an old hot water cylinder with a well-insulated solar cylinder.

Solar thermal systems are relatively small and appropriate for partially shaded roofs or those with limited space. A typical system will provide over half the hot water needs of the average home.

Paul Barwell, Chief Executive of the STA, said: “This announcement today is a major success for the STA. Our team has worked very closely with DECC over an extended period in an effort to ensure that the benefits of solar thermal are adequately recognised in the domestic RHI.

"In particular we have helped to drive a deeming calculation based on true occupancy that better reflects hot water usage in the home. The exceptional technical expertise of Stuart Elmes has been invaluable to our efforts.”

Ground source heat pump manufacturer Kensa's Managing Director, and Chairman of the Ground Source Heat Pump Association, Simon Lomax, said that the "Domestic RHI announcement made today, three and a half years after the initial consultation, is disappointingly short on detail."

Tim Minett, chief executive of CPL Industries, a supplier of biomass systems and wood pellet distributor, said he was “surprised the Government is offering more for other technologies but still expect biomass systems will be the most popular by far.

"They are the easiest to retrofit to properties, simple to use and work in all weather conditions – a big factor in the UK – while 12.2p/kWh will cover the cost of installation, lower people’s fuel bills and provide regular income for years to come. What’s not to like about that? “The domestic RHI should be hugely popular as a fifth of the UK’s housing stock is not connected to the gas grid," but he added, "the chief stumbling block is lack of awareness among the public so what we desperately need now is for the Government to step up and promote the scheme vigorously.”

Brian Smithers, European Director, Rexel, agreed, adding: "it is also in the industry’s interest to drive awareness by educating consumers".

Non-domestic RHI decision postponement

At the same time as making the announcement about the domestic RHI, the Government said it was delaying a decision on expanding the non-domestic RHI scheme, which has been operating for over two years, until the autumn, a full year after the proposals were originally released in September 2012.

Industry response was to express disappointment. The Combined Heat and Power Association said the continuing lack of clarity and certainty is "unhelpful for the hundreds of millions of pounds of renewable heat projects currently under development".

Last year the CHP industry welcomed the proposals to expand the RHI scheme to include tailored support for heat produced from biomass and bioliquid CHP. The proposals highlighted recognition within Government that biomass CHP is the most optimal use for limited biomass resources.

Dr Tim Rotheray, Head of Policy and Communications at the CHPA said: "It is absolutely crucial that the Government now provide clarity and certainty. The Government’s proposals for a CHP-specific rate under the RHI is driving renewable heat projects around the country, and a clear, quick decision will help lock in these investments, lock in the jobs these investments will provide, and lock in our ability to meet our renewable heat targets with highly efficient renewable CHP.”

He did, however, welcome the boost to investor confidence given by the Government's decision, also just announced, to grandfather existing renewable CHP schemes from changes to its quality assurance programme.

The biofuel-industry trade body, the Renewable Energy Association, called the delay "disappointing", but welcomed the announcement on the domestic RHI.

The same response came from the Anaerobic Digestion and Biogas Association's chief executive, Charlotte Morton, who called it "very disappointing for AD developers and operators. Making good use of heat from AD plants makes sense for operators, and will help the government deliver renewable energy targets," she added.

"The (non-domestic) RHI is currently well below its projected budget and another delay will simply make it harder for our members to deliver the projects government wants to see.

"DECC could help resolve this by giving developers clarity over the eligibility date, which would allow projects to start generating and using renewable heat if they have commissioned their plant within a set period," she concluded.

€22 billion EC R&D package to support low carbon industries

Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, said that the partnerships will underpin growth and jobs in key sectors of a knowledge-based European economy.

The European Commission has announced a €22 billion Innovation Investment Package for sectors including fuel cells and hydrogen, biofuels and cleaner, quieter aircraft.

In total, more than half of the money will go to low carbon industries.

The programme intends that over the next seven years, the EU's contribution of €8 billion will mobilise €10 billion from the private sector and close to €4 billion from Member States.

It will be accomplished through the establishment of a series of public-private partnerships under the

These are in form of Joint Technology Initiatives (JTIs) between the EU and industry to provide vital funding for large-scale, longer-term and high risk/reward research.

They set out commitments, including financial commitments, and address strategic technologies that will underpin growth and jobs in key sectors of a knowledge-based European economy. Over four million Europeans are currently employed in these sectors.

The initiative will help make Europe a more attractive location for international companies to invest and innovation and contribute to meeting many EU objectives, including 3% of GDP invested in R&D and 20% of GDP coming from manufacturing by 2020.

Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, said at a press conference that many of the EU's competitors are investing faster and they are thinking big. "There need to bolster both public and private spending if we are to stay in, never mind ahead of the game," she said.

Most of the investment will come through five JTIs:

1. Clean Sky 2 (CS2): to develop cleaner, quieter aircraft with significantly less CO2 emissions;


2. Innovative Medicines 2 (IMI2): to develop next generation vaccines, medicines and treatments, such as new antibiotics;


3. Fuel Cells and Hydrogen 2 (FCH2): to expand the use of clean and efficient technologies in transport, industry and energy;


4. Bio-based Industries (BBI): to use renewable natural resources and innovative technologies for greener everyday products;


5. Electronics (ECSEL): to boost Europe’s electronics manufacturing capabilities.

The Commission is also proposing to extend the SESAR (Single European Sky ATM Research), which aims to modernise Air Traffic Management in Europe.

The public-private partnership of the Biobased Industries Consortium (BIC), a cross-sector group of 48 large and small companies, is worth €3.8 billion; it will accelerate the deployment of biobased products in Europe by 2020.

"This is a unique partnership that places sustainability at the heart of all economic, social and industrial activities," said Berry Wiersum, chief executive of Sappi, a global paper company. "It is about realising the untapped potential of biomass and waste, to deliver sustainable growth in Europe."

Guy Talbourdet, chief executive of Roquette Frères, said that BIC comes at a critical time for European development of the bioeconomy. "It will accelerate the market entry of new biobased products 'made in Europe' in the so-called biorefineries. The use of locally grown biomass will not only enable growth and jobs in rural areas across European regions, but it will also reduce the EU's reliance on fossil or proteins imports."

The Proposal for a Council Regulation on the Fuel Cells and Hydrogen 2 Joint Undertaking will expand the use of clean and efficient technologies in transport, industry and energy and improve energy security in Europe.

NEW-IG (New Energy World Industry Grouping), the leading European industrial association, that represents much of Europe’s hydrogen and fuel cell industry, acknowledged that some 150 projects and over 430 industry and research organisations have already won support under the current programme.

This will now be continued under the new proposals, which will step up activities with a €1.4 billion budget until 2020. Pierre-Etienne Franc, Chairman of the Board of NEW-IG called the announcement “a sign that Europe will strive to establish this technology as a key enabler for its future energy and transport roadmap. Joint priority setting and a long term perspective are key to enabling private investment in such complex, societal challenges.”

Màire Geoghegan-Quinn added: "Thanks to the current Fuel Cells and Hydrogen partnership, you can take a ride on hydrogen-powered pollution-free buses in five cities across Europe.

"But much research and development is still needed to make this application of FCH technology widespread and those for clean energy production and storage commercially attractive. The EU and industry will continue to work together under this new initiative to help reduce the carbon footprint of our energy and transport sectors."

Henri Winand, CEO of Intelligent Energy, observed, “This public-private partnership is testament to the very real possibilities of hydrogen as an important energy vector for more sustainable and competitive energy systems.”

The Commission's proposals are expected to be finalised and approved by the European Parliament by the beginning of 2014.

Fierce lobbying on biofuels criteria as EU cap passed

The bête noire of the bioethanol and biodiesel industry, Timothy Searchinger, argues that their use increases world hunger.

MEPs voted 43-26 in favour of a 5.5% cap on European support for biofuels, as new research showed that growing fuel crops in place of food creates more hunger and deforestation.

Today’s vote was on whether to endorse a strict cap on crop-based biofuels, to curb emissions from ‘indirect land use change’ (ILUC) caused by, for example, the clearing of forest to grow palms for oil.

Lobbying is fierce on all sides of the argument, as parts of the biofuels industry that have invested billions in securing first and second generation biofuel sources, now found to be harmful, fight to preserve the status quo. But other parts are in favour of the move and want it tightening further.

On the side against the cap are MPs in Humberside and East Yorkshire, where some of these companies are based, who are backing a campaign by the biofuel industry trade organisation, the Renewable Energy Association (REA).

REA's Head of Renewable Transport, Clare Wenner, argued: “If it was mandatory for all land-using industries to account for emissions from the direct conversion of land from one use to another, as the biofuels industry does already, then there would be no such thing as indirect land use change."

But new research throws up an additional problem: when agricultural land that has been used to grow food is converted to biofuels, food prices will go up causing some people to go hungry unless previously uncultivated land is made productive.

The research, by Princeton University researcher Timothy Searchinger (known as ‘the godfather of ILUC’), says, in his words: "Biofuels have almost doubled the rate of growth in demand for food, and the system is having a hard time keeping up. If demand growth stopped, prices would come down as farmers caught up, although their efforts to catch up will cause more land use change."

His latest analysis, produced with the help of the EU’s Joint Research Centre, of a report by the International Food Policy Research Institute (IFPRI), found that of every 100 calories from wheat or maize diverted to food tanks by bioethanol production, 25 calories were not replaced.

The European Renewable Ethanol Association, is also against the cap. “I wouldn’t expect anything good to come out of Searchinger,” said Rob Vierhout, its secretary-general. “Whatever he says, he is biased. He is not even a scientist. He is a lawyer and could defend any position you want him to.”

In a previous life, Searchinger was an attorney for the Environmental Defence Fund, and wrote a prize-winning book on wetlands that led work to protect the Everglades and Mississippi river.

Another lobby group, composed of the Chief Executive Officers of leading European biofuel producers and European airlines, called 'The Leaders of Sustainable Biofuels', is in favour of the cap and wants to ensure the market uptake of advanced sustainable biofuels by all transport sectors.

It issued a statement supporting EU policy to gradually phase in less harmful third generation biofuels and supporting the ILUC principle.

But it foresees a further threat lurking in a proposed extended list of feedstock that would be eligible for support as advanced biofuels, namely the use of animal fats and used cooking oil, palm oil residue/waste and any other food feedstock waste.

It says that were used palm oil to be supported in this way, it would be "absurd and counter-productive to the objectives of this legislation".

The long list of feedstock eligible for advanced biofuels, prepared by the EU Committee on Industry, Research and Energy (ITRE), includes a number of disputable raw materials which should, this group says, therefore be excluded from the definition because it would once more "open the door to unsustainable biofuels production from food and feed crops".

Looking forward, 2020 marks the deadline for 10% of EU's transport fuels to be sourced from renewable energies. Before then, by 1 July 2014, all new biofuels installations must meet a 60% greenhouse gas saving threshold and, by 1 December 2017, all biofuels installations in operation before 1 July 2014 must meet a greenhouse gas saving threshold of 35% and 50% a year later.

By the end of 2017, the Commission will submit a review of policy and best scientific evidence on ILUC to the European Parliament and Council.

After 2020, the European Commission will not support further subsidies to biofuels unless they can demonstrate "substantial greenhouse gas savings".

Car manufacturers to get new targets that will cut driving costs

Moustaches in the driving seat: Siim Kallas, Vice President of the EC in charge of Transport (left), and Dieter Zetsche, Chairman of Daimler AG and Head of Mercedes-Benz Cars, at yesterday's CARS 21 group meeting.

The European Commission is next month to propose tighter carbon emissions standards for new European cars with a 2020 target of 95gm CO2 per kilometre, that will cut costs for motorists by 25%.

But the Commission has not decided whether to make the target binding, and there are calls for the target to be even stiffer in order to save drivers even more on fuel costs.

Currently, manufacturers have to reach a binding target of 130gm CO2/km by 2015, which they are on target to attain. Fines for failure are presently €95 for every gram over the target per vehicle and these would be kept at the same level in the future.

Long-term carbon dioxide emission standards for new passenger cars, for 2025 and 2030, are also envisaged by the Commission. These would be set by the end of 2014 at the latest.

The new limits would cut fuel consumption in cars and vans by up to a quarter and save European citizens an estimated 25 billion euros ($31.2 billion) per year, as we reported last month. The estimated fuel savings from implementing the 2020 target would more than compensate for the expected cost of compliance.

The average motorist would save around €500 per year on fuel from the 95 gram 2020 target, based on a driving distance of 20,000 km per year and a fuel cost of 1.4 euros per litre.

Greg Archer, programme manager at the Transport and Environment campaign group, welcomed the news, but said that drivers should be helped to save even more. "Drivers have been short-changed," he said. “A 2020 target of 80g CO2/km is perfectly attainable."

The European Commission is currently assessing the feasibility of a 70gm CO2/km target by 2025.

In an interview in Der Spiegel people last December, Guenther Oettinger said "German automakers will have to fight hard [to meet the new emissions targets], but they will meet them".

But they will not have to fight that hard, being already well on the way towards meeting the 2015 target. According to the Society of Motor Manufacturers & Traders (SMMT)'s report on new car CO2 emissions, last year average emissions had fallen to 138.1g/km, down 4.2% on 2010 and 23.7% below the 2000 average.

Low emission cars are gaining market share

Lower emission, cheaper to run cars are also becoming more popular. In 2011, registrations of alternatively-fuelled vehicles rose by 11.3% to over 25,000 units, and accounted for a record 1.3% share of the total market. All market segments reported a further decline in CO2 emissions in 2011, highlighting the broad nature of the total market shift to more efficient cars.

The SMMT says that the continuing challenging economic situation has increased consumer awareness and the desire to reduce running costs by purchasing lower CO2-emitting cars.

While the UK has to comply with emissions standards set at the EU level, it has also introduced its own complementary policies to incentivise the uptake of low-carbon vehicles. These include a plug-in car grant scheme, a fund of over £300 million, which offers motorists up to £5,000 for the purchase of cars with tailpipe emissions of 75g CO2/km or less. A similar grant has been created to encourage the purchase of ultra-low emissions vans. However, take-up of this has been low so far.

British consumers and businesses also benefit from a favourable tax regime, with plug-in vehicles receiving Vehicle Excise Duty and Company Car Tax exemptions, as well as Enhanced Capital Allowances.

Furthermore, the Plugged-In Places programme has made £30m available to match-fund eight pilot projects installing and trialing recharging infrastructure in the UK to support the Carbon Plan commitment to install up to 8,500 charge points.

Support for the automotive industry

Although in the UK, the auto market is doing surprisingly well given the recession, the story is not the same across the whole of Europe, where altogether it supports 12 million jobs, a €92 billion trade balance, and receives €30 billion investment in R&D.

So yesterday the European Commission announced a series of actions to support the industry, with a proposed action plan that will include providing EU financing for research, in particular to help the sector adapt to the technologies of tomorrow, through reinforcing European Investment Bank lending.

It will also help to manage business costs by applying smart regulation, and improve exports through trade negotiations and work on global regulatory and procedural convergence with the ultimate aim of achieving the approval of a worldwide car type. This would mean that any car produced in the world can be marketed in every country of the world.

Also yesterday, members of the CARS 21 High Level Group, which consists of ministers and senior industry representatives, met for the final time and approved a report which sets out a complete vision for the automotive industry in 2020.

It calls for, amongst other things, support for the development of "a portfolio of propulsion technologies, dominated by advanced combustion engine technology, that would be increasingly electrified. In addition, the deployment of vehicles with alternative powertrain concepts (such as electric and fuel cell vehicles)".

Parallel to this they also called for "appropriate refilling and recharging infrastructure for alternative fuel vehicles" to be built up, "in line with their market potential".

European Commission Vice-President Antonio Tajani, responsible for Industry and Entrepreneurship, said: "The automotive industry needs to be in good shape first in order to realise this vision. We therefore need to act now and decisively in order to counter current economic difficulties by mobilising financing for research, carefully evaluating any new regulation and supporting the expansion on third markets”.

The future for low emission vehicles

This is still largely driven by European legislation, although high fuel prices and concerns about climate change are playing a large part, especially outside of Europe.

Under the 2009 Renewable Energy Directive, fuel suppliers are required to source 10% of their transport fuel from renewable sources (although this policy has been met with controversy due to concerns over unsustainable biofuel cultivation).

One in four business leaders have already making use of, or are considering introducing, alternative fuel vehicles to their business operations, partly as a response to oil prices remaining stubbornly high, according to a report last month from Grant Thornton. This finds that 24% of businesses globally are looking to alternative fuel vehicles, such as electric cars, hybrids, LPG and fuel cell cars, to help mitigate rising transport costs.

The survey covered 12,000 businesses per year across 40 economies, finding also that the price of oil prices was the leading cause driving business owners to consider alternative fuel vehicles, for 69% of survey respondents globally.

The drive towards clean alternatives is being largely steered by mature markets, with 28% of businesses in the G7 at least considering adopting such vehicles, compared to just 15% in the BRIC economies.

55% of businesses cited tax relief and 62% cost management as key motivators for switching to low emission vehicles. Businesses are also increasingly aware of the environmental impact of their fleets with 58% citing saving the planet as a driver towards the adoption of alternative-fuel vehicles.

Amongst those who have not considered alternative fuel vehicles, cost (49%) emerges as the greatest constraint, closely followed by the difficulty of charging/refuelling (48%) and a lack of choice (38%).

The trend toward alternative fuels is also visible in global sales of hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs), which are projected to reach 5.4 million vehicles by 2021 (more than 6% of the automotive market).

But a recent KPMG report found that electrified vehicles will not exceed 15% of annual global new car registrations before 2025, because of cost and lack of charging infrastructure; for the immediate future, hybrids will continue to be more popular than pure battery-powered cars.

Over time, fuel cell vehicles are seen as a more promising prospect than battery-electrified cars, especially in the BRICs countries. They find that 9–14 million new electric vehicles will be registered in TRIAD and BRIC markets by 2026.

Low carbon and environmental industries defy the recession: official

On the road to success: alternative fuels power the most growth in the UK green economy.

Eat your heart out, George Osborne. The UK's low carbon, environmental goods and services sector grew by 4.7% in the last year, adding £5.4 billion to the economy.

Growth is led in particular by the increasing use of alternative fuels such as biofuels, wind power, building technologies and heat pumps.

This compares to the growth rate for the UK economy as a whole in the same year of 0.7%. The Chancellor had been expecting growth of 2.3% in 2011.

In his Autumn Statement last year he famously described green policies as a "burden" and a "ridiculous cost" to British businesses. He predicted that “businesses will fail, jobs will be lost, and our country will be poorer" as a result of them.

In fact, the exact opposite appears to be the case. In 2010-11 the value of sales in the sector reached a total of £122 billion compared to £116.8 billion in the previous year.

Jobs in the sector are up 2.8% on the previous year to 939,627. The report says “This is the first really positive sign of employment growth in the sector since the recession in 2008".

The figures come in a report from the Department for Business, Innovation and Skills, which also shows that the UK comes an overall sixth in the world in the low carbon and environmental goods and services sector, and sixth in 18 of the 24 sub-sectors identified. It follows the US (at £645bn), China (£435bn), Japan (£205bn), India (£205bn), and Germany (£140bn).

The six sub-sectors where the UK is not sixth are: carbon finance, where it comes second in the world, alternative energy (8th); geothermal (7th), photovoltaic (7th) and wave & tidal (5th).

Growth in the sector in the UK has been consistent in the last few years: £4.8bn or 4.3% in 2008-09 and £4.7bn or 4.3% in 2007-08.

Looking at the number of companies in the sector, this is also increasing, albeit slowly. In the last year it was 51,682, up 0.1% on the previous year, but the year before that there was a drop of -1.2% and no growth the year before that, at the start of the recession. However, these companies are employing more people.

Looking more closely at the sub-sectors, the largest growth is found in alternative fuels (15%), building technologies (12%), wind (11%), alternative fuel vehicles (11%) and heat pumps (9%) (mistakenly called geothermal in the report).

The highest year-on-year increase in growth rate is for carbon finance, followed by wind, wave & tidal, carbon capture & storage and photovoltaic.

Export of UK expertise in this area is becoming increasingly valuable. At £11.8 billion and up 3.9% on the previous year, this represents 2.5% of the value of Britain's exports for that year. 58% or £6.9 billion of this total is accounted for by alternative fuels, building technologies, photovoltaic, wind and water/ waste water.

Globally, sales in 2010-11 were £3.3 trillion, an annual increase of 3.7%. Of this, low carbon sales formed 48% of the total at £1.6 trillion, compared with renewable energy at 31% or £1 trillion, and environmental goods and services at 21% or £0.7 trillion.

The countries with the fastest growth in this sector are predominantly from the developing world: the Philippines (39%), Ukraine (16%), Pakistan (15%), the Czech Republic (13%), Saudi Arabia (13%), Turkey (13%) and Brazil (12%), mostly because they are starting from a lower base.

The report says that growth projections in the sector as a whole demonstrate a steady and sustainable trajectory, with annual forecasts increasing from 3.9% to 4%. Renewable energy shows the highest level of growth at 4.5%, with environmental services lowest at 3.4%.

The sub-sectors that are forecast to have the highest global growth rates for the current year are predicted to be carbon finance at 9.2%, additional energy sources at 9.1% and wind power at 5.2%. The lowest growth rates would be for nuclear power at 2.1%.

Why is this sustainable biodiesel illegal in the UK?

The Government is currently considering the Renewable Transport Fuel Obligations (Amendment) Order 2011.


I have seen a copy, and I can tell you that there is plenty to be concerned about in terms of its inadequacy.

But in this column I'm going to concentrate on one particular aspect: an appalling oversight which involves a potentially valuable renewable resource going unused in huge quantities, while existing biodiesel is not as sustainable as it seems.

Up against the law

John Nicholson runs an international business turning waste products, including some from the paper industry and used vegetable oil, into diesel fuels which can be burnt both in generators to produce heat and power, and in diesel vehicles. He also deals in fuel line heat exchangers and related technology.

Recently, he was raided by representatives of Her Majesty's Revenue and Customs who confiscated thousands of pounds worth of fuel, without compensation, and issued him with a tax bill for the fuel at the highest rate. It's a wonder he is still in business.

As part of the biopower network, his experience is not unique, but if you talk to anyone else in the mainstream biodiesel or biofuel network, say in the National Centre for Biorenewable Energy, Fuels and Materials, in DECC, or in the Department for Transport, they are completely unaware that this sort of thing goes on.

Now, you and I know that it is both common sense and environmentally sound to reduce both carbon emissions and waste by collecting used vegetable oils and chemically related liquids from cafes and other outlets and reusing it as biodiesel.

So why is it that what John Nicholson and those in his network do, is currently illegal in this country?

Current legislation requires that any conventional biodiesel:

1. must contain biomass or waste cooking oil
2. must not contain hydrocarbons
3. must have a total ester content not less than 96.5% by weight
4. and a sulphur content not exceeding 0.005% by weight.

It is the third point which John fell foul of.

Yet there is nothing about the chemistry of esters that makes them uniquely suited for the manufacture of biofuels.

There is, in fact, a wide range of non-fossil derived materials (much of which is currently regarded as waste) that could most beneficially be used to make biofuels, but at present these materials cannot be used in the UK because they are not esters.

In Ethiopia, China, Germany, Croatia, Italy, Spain, and many other nations these materials can be used without obstruction.

The EU Renewable Energy Directive (RED), (amendments to which are currently out to consultation), which is the 'parent’ of the Renewable Transport Fuels Obligation and other UK legislation specifying the use of biodiesel, makes no restriction on the proportion of esters which can be used in biodiesel.

The current draft defines it as "methyl-ester produced from vegetable or animal oil, of diesel quality, to be used as biofuel", without specifying any proportion.

Why is Britain adopting this unsustainable position?

John has a sneaky feeling, which he cannot prove, that it is because of pressure from the UK petrochemical industry, which uses a petrochemical byproduct to make legal biodiesel.

In the UK, the only currently legal biodiesels involve in their manufacture the chemical process of transesterification, by which biodiesels are manufactured as a Fatty Acid Methyl Ester (FAME), using these byproducts (and others, such as rape seed oil, which uses agricultural land).

This is an inefficient process, causing the production of waste glycerol.

By comparison, a more sustainable process is available, which does not create waste.

Instead, it recycles a waste, used vegetable oil, and creates a larger volume of fuel from the source material than is provided by transesterification.

Britain produces more used cooking oil waste than any other EU nation. Yet most of this is collected and then sold to the biofuels makers in France, Germany and Austria because they can afford to pay better prices for our UCO, because they have lower biofuel taxes.

Many sustainable biofuel resources are available but are currently discarded as waste, such as terpentine from the pulp and paper making industry, and terpenes (non-esters) from the essential oils of many types of plants and flowers.

Unless reused, such materials will otherwise biodegrade to form methane, a greenhouse gas far more damaging than carbon dioxide.

Although these materials can be refined and used for many applications, low grade material can be used in dilution with vegetable oil to make a biofuel that can be run in most vehicles at 100%.

It is a simple mixing process, in which used cooking oil is blended with a solvent. The solvent can be made from these essential oils, alcohol and water.

This lowers the viscosity of the fuel slightly, and raises its cetane value (an indicator of its ease of combustion). Further additives can also improve the power-to-heat output from engines, thereby improving tractive performance.

This wide range of non-fossil derived materials, that could be used in the manufacture of better biofuels, is not available in the UK because of the barrier created by the ester content requirement, and the unhelpful position being taken by HMRC on this issue that led to John Nicholson's stock being confiscated and destroyed.

The non-renewable renewable fuel

There is a further problem with conventional and legal biodiesel: it can contain fossil fuels.

Surprised? This is because methanol is required to make traditional biodiesel as a Fatty Acid Methyl Ester, by the chemical process of transesterification with methanol, using caustic soda as a catalyst.

Commercially available methanol is made from the methane that exudes from oil and gas wells, and is a waste by-product from the petrochemical industry.

It therefore contains fossil derived carbon atoms, and burning methanol or a methyl ester continues to exacerbate climate change, turning what is supposed to be a renewable fuel into one that is less so.

The further incomprehensible and inconsistent fact is that while biofuels are taxed, methanol made from methane is not!

Taxing methanol, and removing the ester condition from biodiesel, would therefore help the UK to meet the Fuel Quality Directive, which requires suppliers to reduce the lifecycle greenhouse gas intensity of transport fuels.

In fact, from the sustainability angle, the whole format of the legal provision in the Hydrocarbon Oil Duties Act 1979 (HODA) is now so complicated and ambiguous that it is totally unfit for purpose.

HMRC is now interpreting this law in such a way that is putting many people off setting up biofuel projects that could operate as community businesses collecting local waste cooking oil and encouraging local farmers to grow energy crops which can be processed to make fuel to meet local needs.

My request to the Department for Transport

So, in summary, here are four things that need to be changed to make biofuels more sustainable in the UK:

1. remove the criteria applied to biodiesel that it must be not less than 96.5% ester content by weight
2. increase the present tax break on biofuel to at least 60p per litre, or remove tax completely
3. remove tax from any biofuel used to produce electricity, or for off road purposes
4. remove biofuels from the scope of the Tied Oils Act under HODA. HMRC claim that any non-fossil derived plant oil is subject to the Tied Oils Act, even though the act itself refers to mineral oil. This creates an ambiguous situation that is open to interpretation.

I have talked to people in WRAP, which I would have thought would be interested in the resource efficiency aspect of reusing used vegetable oil. They have not considered it, and it is not in their work programme.

I have talked to people in the Environment Agency, and while they are interested in the waste aspect, though not concerned with the taxation issue.

HMRC says it is a matter for government to decide.

Whenever John Nicholson has written to the Treasury or DECC, he has received no answer.

The new Renewable Transport Fuel Obligations (Amendment) Order 2011 makes no mention of this problem.

The Renewable Energy Association, which represents the biofuel and energy from waste lobby, does not comment on this specific issue, but does say that the new RTFO "gives no encouragement for the supply of biofuels that do more than reach the minimum sustainability requirements of the RED" and gives "no incentive to produce 'better' biofuels ( i.e. those that deliver high GHG savings)".

The UK Carbon Plan is to increase biofuel use to 5% by energy to 2015 followed by further biofuels contribution to 2020 renewable targets with an assessment of road biofuel potential up to then and a decision taken on biofuel use by 2020.

The RED renewable transport target is 10% by 2020. But the RTFO specifies no route to achieve this.

If the Government seeks to meet this target, it really ought to urgently attend to this problem, and make it possible to produce more sustainable biodiesel without breaking the law.

Exposed: The Renewable Energy Foundation is a front for biofuel and energy-intensive industries, and anti-wind campaigners

The Renewable Energy Foundation sounds like a nice green charity that serves the cause of green energy. But it is in fact a front for the interests of biofuels companies, energy-intensive industries and even oil and gas companies.

It put out a scare story last week, claiming that Britain would lose 10,000 jobs due to the Government's current green policies and 30,000 jobs if those policies are accelerated.

Together with Civitas, the right wing think tank, REF's policy director John Constable argued that "the more green technologies are subsidised by the EU, the greater the predicted net loss for British workers".

But not just any green jobs. It found figures which led it to compare the average cost of a wind power job with the wage of a public worker (not the same thing at all) as £54,000 versus £29,000. What this fails to do is show the comparable cost of that public sector job.

But what of the financial benefit of the wind power job? The report is unable to say, instead admitting "it is not yet possible to estimate the net employment impacts of such costs" but insinuating "they seem unlikely to be positive".

There have been many criticisms of the REF over the years, particularly from the rest of the renewable energy sector, such as Renewable UK and Good Energy.

Juliet Davenport, CEO of Good Energy, has said, "The problem with the Renewable Energy Foundation is that their name is misleading. It suggests they are in favour of renewables when actually the opposite is true."

The Charity Commission even investigated and cautioned them on the grounds that they were engaging in political lobbying.

The REF doesn't see it like that; they claim that they are merely providing educational data sets. Nevertheless these sets are almost exclusively biased against wind power and in favour of biofuels.

Who are the REF?

The REF is registered as a charity at the Charity Commission, which means it can claim charitable tax status. Its website lists a chairman and three trustees, all of whom have strong links to either the biofuels and/or oil and gas industries.

Links to biofuel industries

Mike Starkie

REF's secretary is Mike Starkie, formerly Group Vice President and Chief Accounting Officer of oil company BP Plc, but now he is a Non-Executive Chairman of biofuel company Clenergy.

Clenergy, its website says, has been set up to build plants to generate "500MW/h" (sic) of electricity from imported, cultivated biofuels.

It envisages importing the fuels from countries where there are serious questions about the sustainability of the forests.

It announced this month that it aims to become nothing less than the worldwide supplier of biomass feedstock through licensing agreements and joint ventures through the cultivation of energy crop plantations throughout the developing world.

These will produce not just timber but pyrolysis oil and wood pellets.

The European Union is now under severe pressure to change its policy on biofuels and biomass after evidence has emerged that their use can actually increase carbon emissions.

ActionAid, Birdlife, ClientEarth, European Environmental Bureau, Oxfam, Transport and Environment and Wetlands International all signed a letter last week addressed to the European Commission President, José Manuel Barroso, asking for the policy to be reviewed in the light of five scientific studies on the topic including one on land use by the EU's own scientific advisors.

The Renewable Energy Foundation has published no comment on this news.

If this evidence is accepted and policy changed, then support for biomass in the Renewables Obligation Order will undoubtedly have to be removed.

This is the policy shift for which Biofuelwatch, the campaign organisation that challenges the sustainability and carbon-neutral value of biofuels, is actively campaigning: for Renewable Obligation Certificates (ROCs) to be withdrawn for both biofuels and biomass.

Yet another REF trustee, Colin Davies told the House of Lords in May this year that he does not want support for renewables but instead wants a change in the Renewable Obligation banding so that biomass, not wind power is favoured.

Under present ROC support, palm oil, imported timber and other biomass energy crops used as a source of electricity earns two ROCS per megawatt-hour (MWh) - currently worth around £90.

This has led to a large number of planning applications, many of which are approved already, for biofuel and biomass (mainly wood) power stations across the UK.

One was recently approved at Anglesey. Other companies wanting to build such plants include MGT Power, Prenergy, Helius Energy and Forth Energy.

Almost all plan to import the wood fuel from industrial plantations at the expense of tropical forests, grasslands and communities in countries such as Brazil, the Republic of Congo or Ghana, according to Biofuelwatch.

With the REF lobbying for an increase in support for biomass in the RO, and scientific evidence pulling in the other direction, there is speculation that this dilemma may be a factor in the delay in publication of the Government's review of Renewables Obligation Certificate banding.

Cambell Dunford

There is a further link to biofuels companies. REF's company address, 21 John Adam Street in London, is alongside Charing Cross Station. Also registered at the address is a limited company called REF Ventures Ltd., which sounds like it could be the trading arm of the charity.

However, this is listed as 'dormant' or 'ceasing to trade' at Companies House, where the name was registered in 2006.

REF Ventures has three listed officers. One of these is Cambell Dunford.

Dunford is a director of W4B, a company with two projects that involve burning imported palm oil to generate electricity; one in Portland, Dorset, and another in Avonmouth, Bristol - despite strong local and national opposition which questioned the sustainability of the source of the oil.

One of these plants alone, when or if operational, would double the amount of imported palm oil into this country.

Palm oil is strongly implicated in the destruction of natural rainforests in countries like Indonesia, and thus actually increasing climate change and flooding, and decreasing biodiversity.

Greenpeace Canada senior campaigner Stephanie Goodwin says four percent of global greenhouse gas emissions are estimated to come from the destruction of the Indonesian rainforests alone.

Links to energy-intensive industries

REF's chairman, Guy de Selliers, has little to do with renewable energy and much to do with energy-intensive industry.

He is listed by Forbes as a Director of a Russian Food company, Wimm Bill Dann Foods, which is a leader in dairy products and children’s food of which Pepsico recently bought a 66% controlling interest.

He is a member of the board of directors of Solvay S.A., a global group of pharmaceutical and chemical companies that makes, amongst other things, plastics and cellulose acetate fibre as used in cigarette filters. It has a new energy arm, founded last year - which is involved, at least partly, in biofuels – specifically, sugar cane operations in Brazil.

He's also been a director of an energy-intensive nickel processing company.

Colin Davies

REF Trustee Colin Davies is also the President of the Aluminium Foundation. He recently complained to the House of Lords about the "the huge costs facing energy-intensive industries" like his from the "introduction of Carbon Price Support and Phase 3 of the European Union's Emissions Trading scheme".

Davies is also director of aluminium company Alcoa and in both roles frequently can be heard complaining about the risk to his company and the aluminium industry, especially the upstream, energy-intensive side of the business, of ‘carbon leakage’, and asking for Government support, and appropriate compensation, i.e., against the burden of the Emissions Trading Scheme.

Links to the oil and gas industry

Besides REF's secretary, Mike Starkie, having been Group Vice President and Chief Accounting Officer of BP, another Trustee, Dr Carol Bell, is heavily involved in the oil and gas industry.

She is a board member of Petroleum Geo-Services (PGS), which helps oil companies find oil and gas reserves offshore worldwide.

Her company profile says she has over 25 years' experience in the oil and gas sector, particularly its investment and finance and also acts as Senior Advisor on Oil & Gas to Europa Partners, a corporate finance advisory firm; non-executive director of Hardy Oil and Gas plc.; a member of the Investment Advisory Committee of Gemini Oil and Gas (a private investment fund).

None of this has anything to do with renewable energy.

Anti-windfarm activity

REF's anti-wind stance is well known. The author of the report on renewable energy and jobs, John Constable, is frequently quoted by the likes of anti-windfarm group The Countryside Alliance.

Also well known is the involvement of the DJ and TV personality Noel Edmonds. The celebrity was a founder of the REF and is listed as an officer of REF Ventures.

Edmonds is also a director of motor, helicopter and aviation companies - all of no merit in terms of sustainability, let alone renewable energy - and 38 others, none of which are anything to do with renewable energy either.

Although he resigned from the REF itself a year ago, Noel Edmonds' involvement is explained by the fact that he is a vociferous opponent of windfarms. He told the Guardian in 2004 that he helped found he REF "because of the threat near his home in Devon".

In 2008 he told Daily Mirror readers that "Politicians are promoting the wind industry as a green icon, but they are misleading the public into believing the propaganda of the wind industry. The reality is that wind power is too costly and can never meet our energy needs; but it will destroy the countryside."

Edmonds is also on record (News of the World, 14th Sept 2008) as believing that there should be a total ban on migrants coming into Britain because its energy resources are stretched.

Other donors to the charity are known anti-windfarm campaigners, including Sigrid Rausing, heiress to the Tetrapak fortune (the family is among the richest in the country and owns an estate in Sussex and another in Scotland).

The REF doesn't disclose the identities of all of its donors, but of those it does, many are clearly influential and wealthy, For the rest, we can only speculate on the interests they have in trying to discredit windpower and lobby for biofuels and the oil and gas industry.

Conclusion

All of the above represents clear evidence that the Renewable Energy Foundation has an industrial agenda aimed at skewing Government policy in favour of the industries for which it is a front.

Its pronouncements on renewable energy, jobs, and especially windpower, must therefore be taken with several pinches of salt.

Thames Water makes electricity from dried poo. Is this good?

The above picture is not coffee granules. Do not add water. Do not attempt to drink.

It is dried poo, and Thames Water is using it to generate electricity.

The sewage company has installed a £1.5m sewage sludge dryer at its treatment plant in Slough and estimates that the resulting renewable fuel will be worth £300,000 and reduce its carbon emissions by over 500 tonnes a year.

Rupert Kruger, Thames Water’s head of innovation, said: “This is the first time in Britain that a waste dryer has been used to create ready-to-burn fuel from sewage sludge, rather than simply being used as a waste-reducer."

The dryer will process five tonnes of sewage sludge a day, which represents a fifth of the solid remains of the treatment process, heating it to about 180oC and stirring it with heated rotating paddles.

The fuel, which then has a calorific value similar to that of brown coal (8–10 MJ/kg), is transported to Thames Water's Crossness sewage works in Bexley, East London, and fed into a combined heat and power generator to generate renewable electricity.

The CHP plant has so far burnt 160 tonnes of ‘sludge cake’ a day. This unsavoury name refers to de-watered solids from sewage - the conventional form of post-treatment waste.

However, sludge cake is still 75% water. In order to burn this wet fuel, the generator also has to burn non-renewable gas from the grid.

But the new dried poo granules only contain 5% water, so this will help to reduce the amount of gas required, which is where the carbon savings come in.

The Slough sludge dryer is also eligible for additional Government ROC (Rewewable Obligation Certificate) support, providing extra revenue.

A further saving is achieved from a reduction in the number of truck journeys required to transport the sludge to where it was previously spread on agricultural land as fertiliser.

However, the process does mean that the nutrient value of the material is lost, leaving farmers to have to source alternative fertiliser elsewhere.

Sewage is a vital source of nutrients that have been removed from the soil in the form of food in the first place.

Traditionally, 'night soil' was always composted and used as a soil conditioner - for example in nineteenth century Paris, which was able to feed itself from the market gardens which surrounded it and which were fertilised this way.

The nutrients have to be found somewhere, and if they are burnt, where is that to be? From slurry from intensive pig farms and anaerobic digestion?

I hope so. Thames Water does not say.

The dryer at the Slough sewage works, developed by US firm Komline-Sanderson, is 98% thermally efficient, which means all but 2% of the energy used to heat the system is used.

However, the fuel created with this method is not entirely renewable because the drying process consumes 800kWh per tonne of dehydration water, which is typically supplied by fossil fuels.

A cheaper and more eco-friendly solution is practised in a plant that came online in May this year, at a sewage treatment facility in Strass, Styria. This dries the sludge using solar thermal power.

Run by the regional wastewater association of Leibnitzerfeld Süd and using a patented Wendewolf® process, this drying method requires just 30kWh of electricity for each tonne of dehydration water - a reduction of 98%.

At 126.3 metres, the solar dryer at Strass is currently the world’s longest solar sludge drying unit, and treats 1,700 tonnes of sludge a year, turning it into 460 tonnes of granules.

Back at Thames Water, Rupert Kruger insists that their new plant is part of the company's ongoing transition to turn more of its product into revenue-generating renewable fuels.

“For decades we have generated £15m a year of electricity by burning biomethane from sewage," he says, pointing out also that last year the company was the first in the UK to feed renewable gas, from sewage at a plant in Didcot, Oxfordshire, into the gas supply network.

It has also agreed plans to build Europe’s first reactor to produce phosphate-based fertiliser from sewage, also at Slough.

"The new sludge dryer is the next chapter in our quest unlock the full energy potential of waste,” he said.

Crossness is one of two Thames Water sites with sludge-powered generators. A further twenty, including the one at Slough, generate electricity and heat by burning biomethane gas from sewage, to help power the company's works.

The company claims this saves an average of £15m a year on energy bills.

899MW of newly approved biomass plants could increase carbon emissions

Last week DECC approved construction of a new 299MW biomass-burning plant owned by Anglesey Aluminium Metal Renewables. But new opinion from the Scientific Committee of the European Environment Agency (EEA) says plants like this will not be carbon-neutral and may even result in increased carbon emissions.

The proposed plant will employ up to 600 people during construction and around 100 full-time personnel when operational, and the company says its feedstock will be sourced from both imported and local sources - perhaps forests in Wales - with imports coming in through the Port of Holyhead.

This approach for sourcing fuel is identical to that being followed by Drax, which was given consent for 580MW of biomass-fuelled plant in the north-east six weeks ago.

Both are awaiting final go-ahead for construction when the results of the Government's review of the Renewable Obligation Certification (ROC) incentive scheme are announced, expected next month.

The EEA's report, however, says that biomass - fuels of plant origin like trees - should not be considered carbon neutral because this "fails to recognize that if bioenergy were not produced, land would typically grow plants anyway, and those plants would continue to absorb carbon and help to reduce carbon in the air".

The report calls it "double-counting to credit bioenergy for reducing carbon in the atmosphere through plant growth" because "plants would grow and absorb that carbon anyway".

The opinion derives from peer-reviewed articles published in Science magazine by a Princeton University researcher, Tim Searchinger.

The explanation for the opinion is given by a thought experiment: "imagine a hectare of cropland just abandoned and allowed to reforest. These growing plants would absorb carbon from the atmosphere into plant biomass." Some of that would be consumed and the carbon released by organisms into the atmosphere.

"Other carbon would be stored in vegetation and soils as the forest grows, and that ... would have the effect of offsetting some of the emissions of carbon by burning fossil fuels."

"However, if, instead of allowing the forest to grow, the land were used to grow energy crops which were burned in an electric power plant, their use would displace fossil fuel emissions, but the actual CO2 emitted by the power plant chimneys would not be reduced.

"Per unit of energy, the CO2 emissions would typically even be higher than those of a fossil fuel-burning power plant because biomass contains less energy per unit of carbon than petroleum products or natural gas and because biomass is usually burned with a lower efficiency than fossil fuels," the paper concludes.

In other words, using land to grow bioenergy crops sacrifices the use of the land to absorb and sequester carbon.

The CO2 released from the plant could only be counted as carbon-neutral if or when the carbon absorbed by the energy crops and burned in the power plant exceeded that which would otherwise be absorbed and sequestered by the growing forest.

This opinion has been questioned by Marlene Holzner, spokeswoman for EU Energy Commissioner Günther Oettinger, who cited another report compiled by Econometrica which says Searchinger did not compare CO2 emissions from biofuels to those from petrol.

The scientist himself has disagreed, saying,"The whole point of the analysis was to make that comparison – detail for detail. Biofuels will not reduce emissions, and may increase them."

Recent reports by the EU's Joint Research Centre JRC and the International Food Policy Research Institute (IFPRI) have also concluded that the burning of biofuels can increase CO2 output.

The EEA's opinion document does give examples of three scenarios where biofuels may reduce carbon emissions and not displace food crops:

1. when bioenergy crops are planted on lands once covered with tropical forests that have been overrun by invasive grasses that frequently burn


2. wastes that would otherwise be disposed of and allowed to decompose, emitting methane


3. crop residues that would otherwise be burned. However, care must be taken to ensure that this loss of residues does not lead to reduced productivity and therefore reduced plant growth or reduced carbon sequestration in soils.

Furthermore, the document says that accounting must reflect any increases in GHG emission from fertiliser production required to replace the nutrients from the residues.

How does this affect the approved new UK biomass burning stations?

DECC's consenting letter says the plant may burn “biomass fuel feedstocks” that are defined as "fuel, excluding material which is, or is derived directly or indirectly from animal matter, which qualifies as 'biomass' under Article 4 of the Renewables Obligation Order 2009 (S.I. 2009 No. 785)".

This Article only defines biomass as material of which "at least 90 per cent of its energy content is derived...directly or indirectly from plant matter, animal matter, fungi or algae)".

This definition is incredibly broad. Therefore, in the absence of any other conditions, it is likely that timber from managed forests will be used as one of very few feedstocks that can be reliably and consistently sourced at the volume required by such large plants.

In this case, if Searchinger is right, overall carbon emissions resulting from the plants could well actually increase.

Anglesey Aluminium Metal Renewables is owned by Anglesey Aluminium Metal Ltd, which itself is jointly owned by Rio Tinto (51%) and Kaiser Aluminum & Chemical Corporation (49%).

No one from Anglesey Aluminium Metal Ltd was able to comment at this stage over the exact sources for the fuel for the proposed plants.

Anglesey Aluminium Metal used to run an aluminium smelting operation. This obtained its energy needs from the neighbouring old Wylfa Magnox nuclear power plants - two 490 MW reactors - Wales' only nuclear power plants, which are due for closure next near.

The smelting plant closed down itself on 30 September 2009 with the loss of many jobs.

But Wylfa is one of eight sites the Government considers suitable for future nuclear power stations. Horizon Nuclear Power, an E.ON and RWE joint venture, has said it intends to build about 3,000 MWe of new nuclear plant next to the old plants.

Can biofuels fuel our transport needs?

By 2050, biofuels could provide 27% of total transport fuel, supplementing diesel, kerosene and jet fuel while avoiding emissions of around 2.1 gigatonnes (Gt) of CO2 emissions per year - but only if produced sustainably, according to a new International Energy Agency (IEA) roadmap published today.

But biofuels aren't the only fuel - electric vehicles are taking to the road too, and yesterday saw the publication of a new UK Low Carbon Automotive Directory to promote UK expertise in the area for export.

What we do about transport to make it sustainable is the thorniest question facing us as we try to steer our high-energy way of life towards a more climate-friendly future.

The kind of answer arrived at affects the degree to which lifestyles, accustomed or aspiring to the freedom of movement that cars, planes, buses and trains currently offer, can continue into the future.

The IEA technology roadmap, Biofuels for Transport is positive, and provides an excellent overview of many of the fuelstocks and conversion technologies, from those in full commercial production now, to those which are just in R&D.

It also examines their carbon balance and overall sustainability, which is crucial to minimising the impact of travel.

However, it does not cover everything - it is relatively quiet on aviation fuel and in particular on jatropha. This is a plant which grows on land otherwise unusable for farming, makes biodiesel, and was recently tested by Japan Airlines, Air New Zealand, Continental, Brazil's TAM Airlines and Mexican carrier Interjet with Airbus.

A peer-reviewed Yale University study says it could reduce greenhouse gas emissions from flying by up to 60%.

140,000 formerly impoverished farmers in India are now earning a living cultivating the crop without compromising food supply or food pricing - which makes it highly sustainable. India aims to meet 20% of its diesel demand with fuel derived from plants rather than fossils by 2017.

The IEA report is also weak on the multiple benefits of algae-farming. Algae produces biodiesel while absorbing carbon dioxide from the atmosphere and processing sewage, and proposals have been made to grow it alongside industrial plants which emit the greenhouse gas. The process also produces a fertiliser and clean water.

A recent report in the New Scientist on the subject does highlight physical limits to how much we could make, but of course the fuel-source is only one amongst many.

Can we produce enough sustainable biofuels?

The IEA study says most conventional biofuel technologies need to improve conversion efficiency, cost and overall sustainability, and that current advanced, second-generation biofuels need to be commercially deployed.

We must be fully confident that the life-cycle impacts of these products do not compromise food security and biodiversity, and yield positive social impacts. This includes sustainable land-use management and certification schemes, as well as support measures that promote 斗ow-riskfeedstocks and efficient processing technologies.

The report calculates the land area requirements for biofuel feedstock, at around 100 million hectares (Mha) in 2050 - a considerable challenge given competition for land and feedstocks from rapidly-growing demand for food and fibre.

But it concludes this should be possible, and provide the required 145 EJ of total biomass for biofuels, heat and electricity from crop residues and wastes, along with sustainably grown energy crops.

Will it be expensive?

The IEA roadmap says that scale and efficiency improvements will reduce costs to make most biofuels competitive with fossil fuels by 2030.

The investment costs seem high - production costs from 2010 to 2050 in this roadmap are $11 trillion to $13 trillion, but the marginal savings or additional costs compared to use of gasoline/diesel are in the range of only +/-1% of total costs for all transport fuels - and this is without factoring in the externalities of environmental damage avoided from not using fossil fuels.

UK leadership

The UK is a pioneer in many aspects of low carbon vehicles, well-placed to profit from the global shift to sustainable transport. The updated UK Low Carbon Automotive Directory has been produced to help boost the export market for this emerging sector.

It lists suppliers, partners and new solutions from the UK's businesses and research institutions in areas such as manufacturing, components, transmissions & drive trains, energy recovery & storage (batteries and flywheels), electrical recharging infrastructure, fuels & infrastructure and hydrogen and fuel cells.

The sector is supported by the BIS Automotive Unit with the DfT's Office for Low Emission Vehicles (OLEV) and LowCVP.

Crucial to fostering UK success is Cenex - the UK's first Centre of Excellence for low carbon and fuel cell technologies.

Cenex has just launched its website allowing registration for the key trade show for the sector, LCV2011, the 4th annual Low Carbon Vehicle event which will take place on 7th and Thursday 8th September 2011.

Navigating the route to a low-carbon travel is tricky, but the encouraging message is that it is potentially achievable.

Proposed EU carbon tax to be blocked by Britain

A draft directive obliging European member states to set minimum rates of CO2 taxes at Euros 20 per tonne for diesel and coal used for transport and heating from 2013 is likely to be blocked by Britain, where fuel prices are already high.

The draft revision of the Energy Tax Directive, which includes a carbon tax and is to be presented today, proposes separate carbon dioxide and consumption taxes on the fuels, linked to inflation which would be adjusted every three years.

It would compel EU states by 2020 to institute taxation of fuels based on their energy content and CO2 emissions, rather than the volume-based system currently used.

This would create higher taxes for energy-intensive fuel such as coal and diesel, adding around 8% to a litre of diesel and encouraging a switch to diesel.

But "the aim is not to increase rates for diesel," Commission spokesman David Boublil told journalists on Monday. "The plan is that we should put all fuels on the same footing ... It will mean an adjustment to make sure they are taxed in the same way."

The Commission argues that big prices hikes are not likely as many national governments like the UK already set diesel taxes above the EU minimum of Euros 330 per 1000 litres, and therefore they do not have to pass the tax on to consumers.

Diesel currently attracts lower taxation rates than petrol. Consequently, much of Europe's commercial fleets use the cheaper fuel, including most hauliers. A switch to petrol would not only improve CO2 emissions but local air quality as well, improving people's health.

The aims of the tax

According to Algirdas Šemeta, the EU Commissioner for Taxation and Customs Union, Audit and Anti-Fraud, the proposals are not so much to do with creating a new tax as about restructuring existing taxation (with a CO2-tax element) to meet the EU痴 climate change, energy efficiency and fair competition goals, shifting taxation from labour. They have three objectives:

1. to introduce two elements in the rate structure: one based on CO2 emissions and another based on the energy contents of each product. These objective criteria for taxation will provide for a consistent treatment of the energy sources and energy consumers


2. the CO2 element will provide a framework for Member States to apply CO2 taxation in areas currently missed by the EU Emission Trading System


3. it will create an appropriate framework for taxing renewable energies, in particular biofuels, reflecting their lower CO2 emissions and energy content.

British opposition

But British MEPs are known to be sympathetic to the motor lobby in the UK, which is strongly opposed to the proposed tax. The Automobile Association has said it would be "madness" to introduce it at the current time of high fuel prices - even though it would not take affect for a few years.

Under European Commission voting rules, opposition from any single state can kill the move.

"We're not going to support new measures in this area," a British EU diplomat said. "Taking into account the opposition of other states as well, it is certainly one we would oppose and that therefore points you towards what we might do in the Council."

The UK motor lobby's position is contradicted by the facts. The UK has always had the highest diesel taxes in Europe - the same level as petrol. But, largely due to the fall of the pound against the euro, UK fuel taxes have dropped by a 32% since their high point in 2000.

But UK MEP Jacqueline Foster, the Conservative transport spokesperson in the European Parliament, still disagrees with the move: "We all want to reduce CO2 emissions from vehicles but it should be done by placing incentives on people, not by clobbering them," she said. "With so many goods transported by road, further increases in fuel costs will send inflation soaring."

Geoff Dunning, chief executive of Britain's Road Haulage Association, agreed: "the price of fuel has already gone through the roof. To add to that would be madness. It would cripple the British economy."

The draft law also calls for the abolition of special low rate for 'red' diesel, used by the farming and fishery industries. This has brought howls of outrage from the National Farmers Union.

Supporters of the move argue that since any price increases would not enter into force until 2018, by which time it should have encouraged the shift to less polluting petrol, it will not affect the current economic situation.

Taxes are lower now

A new report from the think-tank Transport and Environment (T&E) adds weight to those who see a need for change. It claims that "the average fuel tax levied on road fuels in the old EU15 is in real terms 10 Euro cents per litre lower today than it was in 1999".

This means that "had governments not let fuel taxes slip but kept them constant, CO2 emissions of EU27 road transport would have been some 6%, or 60 Mtonnes, lower, and today's oil imports would have been Euro 11bn lower. If the additional Euro 32bn revenues had been spent on lowering labour taxes, roughly 350,000 jobs could have been created."

The report adds, "Compared with other regions in the world like the US, China or Japan, the EU has relatively high fuel taxes. In many ways this is a major strength for the EU's economic and environmental performance as (among other things) it lowers CO2 emissions and oil demand because, contrary to popular belief, taxing fuel brings down consumption. In the long run, 10% higher fuel prices reduce the overall fuel consumption of cars by 6 to 8%, and of lorries by 2 to 6%."

T&E's director, Jos Dings, does think the Directive is wrong on biofuels, which it wants to exempt completely from taxation. "Biofuels are not zero carbon. Their performance varies widely and we would like to see their taxes reflect their actual performance and not by default a zero rating."

Also, "on the air and maritime transport side, it is very disappointing that the Commission has not had the guts to end the prohibition on fuel taxation in those sectors."

Renewable heat incentive rewards solar water heating but will increase air pollution

Chris Huhne has finally announced much-awaited details of the Renewable Heat Incentive (RHI) scheme.

It covers such technologies as solar water heating, using wood, wood pellets and woodchips, air and ground source heat pumps, energy from waste, on-site biogas, deep geothermal and injection of biomethane into the grid.

36% of the UK’s overall energy is used for heat, creating 175 million tonnes of carbon emissions a year.

The industry had originally hoped that the scheme would start at the same time as the Feed-In Tariffs for renewable electricity a year ago, then it was expected this April, but now payments won't be be available to households until October 2012.

The scheme has become a victim of government cuts and will be smaller in size than originally thought and introduced in phases.

Importantly, because of criticism of the potential impact on fuel bills, the RHI will not be funded by an RHI levy but from general Government spending.

As a result, it will be introduced in two phases. In phase 1, more than a quarter of the first year's budget, around £15 million, is to be guaranteed up to 25,000 household installations through a premium payment scheme.

Phase 1 will focus on people living off the gas grid, who typically spend more on their heating and whose fuels, like coal, have a higher carbon content.

Participants will then provide feedback on how the scheme works to help design the second phase.

In this phase, coinciding with the introduction of the Green Deal, the scheme will expand so that by 2020 there will be an estimated 13,000 installations in industry, 110,000 in the commercial and public sector supply 25% of this sector is demand, and creating 150,000 jobs.

Carbon savings and air pollution

It is hoped that the scheme will help deliver 44 million tonnes of carbon dioxide savings by 2020, though 8 million of these are already accounted for by the European Emissions Trading Scheme. Those emissions within the emissions trading scheme will cost £35/tCO2 and those outside the scheme a further £12 per tonne.

However, there are concerns about the impact on air quality of a lot of new biomass combustion, particularly from particulates such as PM10. The final RHI proposals could lead to 28TWh of biomass burned. and assessment by Defra of the proposals shows that this could lead to up to £2.6 billion of potential lifetime social cost.

This is a staggering amount.

The Tariffs

The highest tariffs will be paid to solar thermal water heating (8.5p/kWh) small biomass schemes (7.6p/kWh or 1.9p/kWh - see below why), and biomethane (6.5p/kWh). Small ground source heat pump schemes will receive 4.3p/kWh, and large schemes 3p/kWh.

Municipal solid waste schemes including Combined Heat and Power (CHP) will receive 4.7p/kWh or 1.9p/kWh, depending on which tier they are in, and large biomass schemes 2.6p/kWh.

Solar water heating was by far the most popular renewable energy technology under the previous renewable energy subsidy schemes like Clear Skies. It works very well in the UK and can supply between 40 and 50% of domestic hot water requirements, so it is good that it receives the most support.

Because of doubts about their efficiency air source heat pumps will not be eligible at the start of the RHI. Nor will heat pumps that deliver the heat to air as opposed to water. Some will consider this unfair, but it is to do with the difficulty of metering this kind of heat.

Heat meters will need to be installed at the point of generation and, where appropriate, at the point of usage in order to claim payments.

Bioliquids also will not be eligible from the start because of the complexity of the market and their uses in transport etc. They can also have a high energy density.

RHI support will only be available if the installation in question has not received (and will not receive) any other public funding.

The tariffs will be paid for 20 years to the eligible technologies that have been installed since July 15, 2009 with payments for each kilowatt of renewable heat produced.

Payments, which will be administered by Ofgem, are to be claimed by, and paid to, the owner of the heat installation or the producer.

These payments will be fixed for the lifetime of the scheme, once a measure is installed, adjusted in line with inflation. But the levels of support available for new entrants as time goes on may decrease.

Rewards linked to energy conservation

Following criticism that there might be no requirement that the building in question has an efficient fabric, by being introduced with the Green Deal, homes must be insulated to reduce demand, as with earlier schemes, such as the Low Carbon Building Programme, because everyone knows is more cost efficient to save energy than to generate it.

There has been a worry about what happens when some smart meters enter into the market. When buildings are metered on a half hourly basis energy the incentive will be to run your equipment as much as possible because the more your meter ticks over, the more money you make.

This has to some extent been met by introducing a two-tier tariff system for biomass boilers to reduce incentive to over-generate. Upon reaching a prescribed level of heat generation, the tariff drops to a lower tier 2 tariff. For solar thermal, once the equipment is installed, the amount of heat generated is not controlled by the owner.

The RHI has been a long time coming. There are many in the industry raring to get installing, and there is a huge potential market. But most will have to wait a good while yet before they can take advantage of the scheme.

The EU's 2020 targets for emissions and renewables

The EU has set a target of a 20% cut from 2005 levels in the continent's greenhouse gas emissions by 2020, potentially rising to 30% in the event of a global agreement.

Total EU industrial emissions in 2020 will be capped at 21% below 2005 levels. This means that 20% of all energy consumption - for electricity, heating and cooling, and transport - in the 25 states must be derived from renewable sources by that date.

In addition up to 12 carbon capture and storage (CCS) demonstration projects will be supported and gases capotured would be credited as not emitted under the EU Emissions Trading Scheme (ETS).

The ETS itself will be modified to establish a central cap on emissions rather than the current system of Member States setting emissions caps for their own economies. Furthermore:

• two new gases (nitrous oxide and perfluorocarbons) will be included
• road transport and shipping remain excluded, although the latter is likely to be included later
• agriculture and forestry are also left out because it's hard to measure their emissions
• smaller installations, emitting below 10,000 tonnes of CO2 per year, will be able to opt out from the ETS, provided they institute alternative reduction measures. 

For the UK, the Commission proposes:
• a 16% reduction in UK emissions from sectors not covered by the EU ETS by 2020 from 2005 levels
• 15% of all UK energy to be renewable by 2020
• 10% of road transport fuels to come from renewable sources, as long as they are produced sustainably.

Business Secretary John Hutton said most of the new renewable electricity would come from the fact that "the UK is already scoping a vast expansion of wind energy offshore and tidal power on the Severn". Transport Minister Ruth Kelly welcomed the proposal of sustainability criteria for biofuels.

But Greenpeace said "The EU target for biofuels is a mistake. Biomass is more efficiently used for electricity and heat production rather than to fuel high-consumption cars".

Allocation of credits

Campaigners did welcome the fact that power generators will, from 2013, have to pay for their ETS credits, rather than get windfall profits from being given them as at present, but criticised the loopholes given to high energy users - the steel, aluminium and cement industries - after fierce lobbying.

Currently, 90% of carbon emission allowances are given free to industrial installations, but by 2013 it is estimated that around 60% will be auctioned. The text adds that "full auctioning should be the rule from 2013 onwards for the power sector", which is expected to lead to a 10-15% rise in electricity prices. In other sectors, free allocations will gradually be completely phased out on an annual basis between 2013 and 2020.

However, certain energy-intensive sectors could continue to get all their allowances for free in the long term if the Commission determines that otherwise facilities would relocate to countries with less stringent climate protection laws. The EC says these sectors "are yet to be determined".

Commission President José Manuel Barroso said, "There is no point in Europe being tough if it just means production shifting to countries allowing a free-for-all on emissions. An international agreement is the best way to tackle this." 

Assuming a global climate change deal is reached, member states will continue to be able to meet part of their target by financing emission reduction projects in countries outside the EU, up to a limit of about a quarter of total reduction. CDM administrators have complained this will mean a reduction in projects.

"a very small effort

WWF observed that "The 20% target is not even in line with the latest Bali agreement - that developed countries should cut emissions by 25-40% by 2020". "Overall, it is a very small effort," said Dr Stephan Singer, head of its European Climate and Energy Unit. 
The proposals will get final adoption by April-May 2009 at the latest, following negotiations between member states and the European parliament.

Are biofuels a sustainable solution to climate change?

The new US energy bill will see a big increase in corn-produced ethanol.

The motiivation for the White House behind this is reduced subsidies for US farmers. The knock-on effects will be high corn prices for food. Fertilisers and pesticides will be used. The soil will suffer.

This is discussed in a good article published today in Indonesia, home of the climate talks.