Select Committee on European Scrutiny Thirty-Sixth Report



8. PROMOTION OF THE USE OF BIOFUELS IN ROAD TRANSPORT

 

(23086)

15500/01

COM(01) 547

(a) Commission Communication on alternative fuels for road transportation and on a set of measures to promote the use of biofuels.

(b) Draft Directive on the promotion of the use of biofuels for transport.

(c) Draft Directive amending Directive 92/81/EEC with regard to the possibility of applying a reduced rate of excise duty on certain mineral oils containing biofuels and on biofuels.

Legal base:

(a) —

(b) Article 175EC; co-decision; qualified majority voting

(c) Article 93EC; consultation; unanimity

Department:

(a) and (b) Transport

(c) HM Customs and Excise

Basis of consideration:

Minister's letter of 28 June 2002

Previous Committee Report:

HC 152-xix (2001-02), paragraph 3 (13 February 2002) and HC 152-xxii (2001-02), paragraph 5 (20 March 2002)

Discussed in Council:

6-7 June 2002

Committee's assessment:

Politically important

Committee's decision:

(Cleared following debate in European Standing Committee A)[35]

 

Background

    1. On 13 February 2002, we recommended for debate this document, which comprises a Commission Communication on alternative fuels for road transportation, a draft Directive on promoting the use of biofuels in road transport, and a further draft Directive concerning the application of a reduced rate of excise duty on certain mineral oils containing biofuels. The debate was duly held on 1 May 2002, and we have subsequently reported[36] on developments on the rate of excise duty following an initiative by the then Spanish Presidency.
    2. In our earlier Reports on the draft Directive on the promotion of biofuel use, we noted that this would specify the minimum share of biofuels[37] as a percentage of all fuels for transportation sold on the individual markets of Member States from 2005. This would be introduced on the basis of an agreed schedule, rising by 0.75% a year, from 2% in 2005 to 5.75% in 2010 (and including a minimum of 1% in the form of blending in 2009, and of 1.75% in 2010). This schedule could, however, be adapted in the light of experience, environmental evaluation and new technical developments, and in conformity with other energy and environmental objectives undertaken at national and Community level.
    3. We also noted in our Report of 20 March 2002 a number of reservations expressed by the Government about the Commission's approach. In particular, it had said that, by setting mandatory targets only for biofuels, the proposal removed the flexibility of individual Member States to decide how to achieve their security of supply and environmental objectives, given that there are a range of other options, from vehicle technologies to other renewable fuels, which could potentially deliver such goals cost-effectively. Similarly, if the measure were to focus exclusively on fuels, the Government said that it would prefer to see it apply to renewable fuels generally. It also felt that the targets themselves were likely to be costly to deliver, and did not offer clear advantages over other approaches, not least because they would require the creation of a significant biofuels market within a very short timescale, which was likely to lead to market distortions and would bear disproportionately on Member States with less mature biofuels industries (and less scope for developing them).
    4. Minister's letter of 28 June 2002

    5. In his letter of 28 June 2002, the Parliamentary Under Secretary of State at the Department of the Transport (Mr David Jamieson) says that discussions at official level showed that the majority of Member States broadly shared the UK's concerns about the scope of the proposal and the mandatory nature of the targets, though a limited number had argued that such targets would provide the impetus to create a significant biofuels market in Europe. However, he says that the Energy Council has now agreed a text which reflects the majority view that Member States should be free to set their own indicative targets, and that it also expands the scope of the Directive to cover other renewable fuels, such as renewable hydrogen, when assessing progress against these targets — a course which he says is supported by the UK.
    6. The Minister also says that the proposal was due to be considered at first reading stage by the European Parliament on 1 July, where he expected the Parliament to back mandatory targets and a further strengthening of the environmental protection requirements in the review process. He adds that he will report on further developments once the negotiations have progressed.
    7. Conclusion

    8. We are grateful to the Minister for this further information, which we are drawing to the attention of the House.

 


35   Official Report, European Standing Committee A, 1 May 2002.  Back

36   (23536) 9041/02; see HC 152-xxxii (2001-02), paragraph 8 (12 June 2002). Back

37   This term covers bioethanol, biodiesel, biogas, biomethanol, biomethylether, bio-oil, and bioETBE (ethyl-tertio-butyl-ether). Back

 
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