HL Deb 26 June 1997 vol 580 cc1672-707

5.16 p.m.

Lord Dixon-Smith rose to move, That this House take note of the report of the Science and Technology Committee, Towards Zero Emissions for Road Transport (1st Report, Session 1996–97, HL Paper 13).

The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. In doing so, I wish to thank our committee Clerk, Jake Vaughan and Professor Bell of Imperial College, our specialist adviser. They bore much of the brunt of the drafting of this complex report. We had many witness, both written and oral. Their information made this report possible and I thank them all. I thank in particular the Ford Motor Company, Johnson Matthey and all those associated with our visit to Germany.

Rather more than a century ago the internal combustion engine was invented. Its continuous development since that time has made it the prime power source for most modern transport. Matching that technical development, we have seen a great expansion in the road system to cope with increasing demand for transport speed and flexibility as well as personal mobility. Modern society in developed economies is transport dependent. We all enjoy benefits, whether we own cars or not.

This technological blessing is now in danger of becoming a curse. We have 22 million cars on the road in the United Kingdom and the number continues to rise. Emissions of toxic exhaust have become a problem more often than is acceptable. The whole transport sector uses about one-third of society's total energy consumption. Globally, there are around 500 million vehicles on the road and it is not just the toxic emissions which are a problem. CO2 emissions have also been rising, although in this country we have enjoyed some success in limiting them.

The technology of the internal combustion engine has brought great benefits. If it is now creating problems we must look for further technological development to provide solutions to those problems. We cannot turn the clock back. This report sets out to examine what is being done to relieve the atmospheric difficulties caused by exhaust fumes. It even dares to look to see whether technologies are developing which will enable us to escape totally from what is in danger of becoming the tyranny of the internal combustion engine.

I undertook some peripheral reading to help my understanding of the issues in this report. One subject is worth noting since it emphasises a particular point. About 17 years ago, the noble Lord, Lord Gregson, moved the acceptance in this House of a report from the Select Committee about electric vehicles. That was in the aftermath of the oil crisis and crude oil was priced at about 45 dollars per barrel. Alternative technologies appeared to have a chance. Who then would have predicted that crude oil prices would drop by two-thirds? It is now about 17 dollars per barrel. New technology was stopped by market forces.

That point was emphasised to us by the Ford Motor Company. Motor manufacturers produce to meet market demand and for profit, not to fulfil technological ambition, nor for philanthropy. National markets may give a lead but success depends on that lead being proved correct so that it is adopted internationally. The international market is all.

I must spend some time on the various aspects of the report: first, the issue of toxic emissions and what is being done about them. Toxic emissions include oxides of nitrogen, hydrocarbons, ozone, carbon monoxide, lead, sulphur dioxide and, particularly from diesel engines, particulates.

There are three points I wish to make. First, knowledge of the problems caused by those substances is not new and the motor industry, with some help from regulation, is well down the road to reducing that problem to acceptable levels in new vehicles. The serious question is whether total elimination is desirable, even if it were possible. The law of diminishing returns applies. Using 1976 as a base point, it cost £152 per vehicle to remove the first 90 per cent. of toxic emissions. It then costs another £152 to remove the next 5 per cent. of toxic emissions, and a further £218 to remove the next 2.5 per cent. That is what the current and approved regulation achieves. At that point, I note that that is a matter decided by the European Union.

I turn now to how those improvements are brought about. Pressure for environmental improvement has accelerated engine development over recent years. I pay full tribute to the motor manufacturers for their diligence in tackling the problem. Reducing the toxicity of exhausts is not a straightforward science. Action to improve one element of the problem can all to often make a different aspect worse. In addition, cleaner exhausts are frequently achieved at the cost of increased fuel consumption.

As in so many walks of life, compromise and balance are the secrets of success. While there is still progress to make, Ford expressed the view that the new lean-running engines which are currently under development throughout the world use the ultimate combustion systems for internal combustion. We are moving towards the limit of what is possible.

It is perhaps worth inserting two other points which I heard from Ford engineers when we visited its research centre at Dunton. First, I heard the comment, "You know, on a bad day in Los Angeles, the exhaust fumes coming from our latest engines are less polluted than the air entering them". And then, "Everything we do to reduce the problem of emissions—and we are pretty good—is negated by our manufacturing and sales expansion". We are back in the marketplace again.

We considered the question of fuels for internal combustion. We are all familiar with the way that the problem of lead has been reduced greatly by adjusting the rate of fuel excise duty to create a price incentive for the use of unleaded petrol. Clean technology is not simply a question of mechanical development. The chemical make-up of the fuel is also important because that affects the combustion characteristics and, therefore, the contents of the exhaust stream. That matters because of the effect that the mechanical make-up can have on the catalysts which are essential to clean up emissions.

We received evidence from Johnson Matthey plc, which is among the leaders in that field, concerning the significance of sulphur in fuels because it can shorten the life of the catalyst and reduce its efficiency. We heard also from MAN in Germany which specialises in heavy transport manufacture. Cleaning the exhaust stream carried a much higher fuel consumption penalty where the fuel had a high sulphur content. We regarded that as a matter of great importance and it is worth noting that, since our report was published, the European Parliament, in debating the proposals of the European Commission following the auto-oil study, has recommended 30 parts per million sulphur in diesel oil and 100 parts per million sulphur in petrol as the standards for introduction in the year 2000. Negotiations continue.

We examined also the question of bio-fuels and alternative fuels. Bio-fuels could be important because their impact on CO2 in the atmosphere is neutral. We received evidence about the production of bio-diesel from rape. It appears that if all the UK land set-aside from food production at 15 per cent. were used to source bio-diesel, it would produce about 6 per cent. of the present diesel demand in the UK transport sector. It follows that much research and development will be required for the sector to provide major benefits. But, of course, every contribution helps.

Are there alternative fuels? The answer is yes. Liquid petroleum gas and compressed natural gas are both cleaner products from the oil industry which are beginning to make their mark. Natural gas exists in very large quantities. When compressed and used through the internal combustion engine, the exhaust emissions are much cleaner than with oil fuels. The committee would like to see the use of that fuel encouraged. In urban fleet vehicles, such as buses and taxis, which are too often exhaust-stream offenders and where introduction might be more simple, the use of compressed natural gas could bring rapid improvement to the metropolitan atmospheres. However, additional costs are involved for new engines and fuel handling. Rapid adoption will not occur unless there is a greater price incentive in the fuel; and we have recommended accordingly.

I turn now to the existing vehicle fleet. Euro I regulations limiting noxious exhaust emissions for new vehicles came into force in 1993 and Euro II regulations requiring a higher standard are adopted this year. We can have less concern about recent additions to the vehicle fleet.

The problem is that most vehicles last about 12 years and proper maintenance over the whole of that time is essential. We had evidence from the Automobile Association that probably only 10 per cent. of the vehicles are responsible for something like 50 per cent. of toxic emissions, poor maintenance being a potent factor in causing that state of affairs. The committee takes the view that the MoT testing system should be used, through a requirement for much higher emission standards in older vehicles, to reduce the number of offensively polluting vehicles on our roads.

Behind everything that I have discussed so far lurks the hidden problem of carbon dioxide. It is a hidden problem because carbon dioxide is non-toxic and therefore raises less immediate concern. However, it is now generally accepted that increasing CO2 levels in the atmosphere is a major cause of global warming. The good record of the UK in this matter is because of improvements in the industrial and domestic sectors; transport has yet to make a major contribution. Our financial recommendations, in particular, are designed to encourage better environmental practice, particularly greater economy, by moving the tax burden around within the sector without increasing that burden across the sector as a whole. The validity of these arguments was accepted by the then Chancellor of the Exchequer in his Budget last November.

I come finally to the question of alternative technologies. We have heard nothing in evidence to convince us that battery technology is making sufficient advances to enable it to overcome the inherent limitations and problems that occur with this technology. We considered hybrid systems with batteries for town driving and internal combustion engines for power elsewhere. These systems are always likely to be heavy in weight, mechanically complex and therefore expensive. We wondered about the gyroscopic problems of a flywheel used for energy storage.

Possibly the most promising new system for propulsion that we heard about is the fuel cell—a system based on a phenomenon first observed 50 years before the internal combustion engine was invented. Fuel cells are at present powering prototype buses in Chicago and Vancouver. Mercedes Benz has one to power a prototype car, which those of us who visited Germany both saw and rode in. These particular fuel cells use hydrogen as a fuel in a totally non-polluting way by combining it with oxygen to produce water and electricity which powers electric motors. If this system is to succeed, crucial to its success will be the development of a method of producing hydrogen from renewable resources. Again, much research and development will still be needed to make such a system competitive. Some of this work is already going on in this country funded by the Engineering and Physical Sciences Research Council and we know that work continues in Germany, Canada, the United States and Japan.

It was a pleasure and a privilege to lead this study. I have tried to highlight some of the salient points. In our recommendations we seek to induce action that is consistent with what we have learnt. We do not say that we have the answer. Time and technological development may supersede what we have heard. However, I hope that the broad drift of what we have proposed will be accepted.

Moved, That this House take note of the report of the Science and Technology Committee, Towards Zero Emissions for Road Transport (1st Report, Session 1996–97, HL Paper 13).—(Lord Dixon-Smith.)

5.33 p.m.

Lord Berkeley

My Lords, I declare an interest as chairman of the Rail Freight Group although I shall not talk about rail freight today. I congratulate the Select Committee on what I consider is a fascinating report. I am no scientist, but I am an engineer and I shall leave others to discuss the technical findings. However. I believe the House will welcome this report as a major contribution to the debate on transport generally.

In its introduction the report rightly tries to put the question of zero emissions into the environmental and transport contexts adding a few comments about accidents, congestion, noise pollution and air pollution. I shall give an example of each. As regards accidents, a German study indicated that the number of injuries per billion tonne-kilometre was 248 for road freight compared with 10 for rail freight. That is quite a difference.

As regards congestion, we have already heard the Department of Transport's forecast that there will be severe congestion on all our motorways in about 15 years, stretching from Preston to Maidstone and all routes in between. That will pose a challenge. As regards noise pollution, all kinds of transport seem to be fairly noisy. The best one can say is that the further one is away from the source of the noise, the less is the noise. Combating that noise poses a challenge for all modes of transport. As regards air pollution, I must refer to the transport report of the Royal Commission on Environmental Pollution. I believe that report is nearly three years old. I did a calculation of noxious emissions. If rail freight increased by 20 per cent., noxious emissions would decrease by 20 per cent. overall. Those are a few examples to show that all these matters must be put into context. They also show that if one alleviates one environmental problem, one often exacerbates another problem, as the noble Lord. Lord Dixon-Smith, pointed out with regard to the United States. I am sure he is quite right.

I continue to support public transport and rail freight but road transport is an essential element of modern life and we must accept that. I see that as part of an integrated transport policy. I do not see any prescriptive solutions to the problem. As the report indicates, there are different problems in the town and in the countryside and there are different needs. Of course there are also different causes of pollution. I consider the drive towards achieving zero emissions as being extremely important as regards many different aspects of this matter.

The report examines many different solutions, as the noble Lord, Lord Dixon-Smith, has said. Some of those solutions are medium term and others are long term and some are appropriate to different locations. I believe we should encourage the development of many of these solutions; some will work in mass production terms whereas some may not, but they all have great potential. I was struck by similarities between three potential solutions. In the case of all three doubts were expressed in the report with regard to safety.

Liquified petroleum gas was considered to be particularly beneficial but there were concerns about the parking of LPG vehicles in basements. However, boats have had LPG cookers for many years. They do not often blow up. I do not have a clue whether they blow up more frequently than cars catch fire on motorways, but there are instruments available to detect the gas. I hope that the committee has not rejected LPG because it considers there may be a safety problem as I am sure that there is a solution. Natural gas must be stored under pressure, but we have had gas bottles around the country for many years. I do not believe that they often blow up.

As regards gyroscopic transport, of course the flywheel could fly off and hit someone, but again gyroscopes have been around for a few years now. There is already a small tramway called a Parry people mover which I believe is being developed in Weymouth which works on a gyroscopic principle; that is, when it stops at a tramstop, it picks up electric power which speeds up the gyroscope which drives the tram to the next tramstop. I should think that is extremely environmentally friendly. I am sure it is quite safe.

I emphasise again that I am no scientist, but if the petrol engine was in the same state of development now as some of these other schemes, would we be wondering about the safety of petrol? I refer to half empty tanks and leakages around carburettors, which one sees in certain cars developed in the 1930s. I speak as the owner of one of those cars. One does not want to have too much petrol in a closed garage. However, that is the way that these cars have been developed. Has a real risk assessment been done on all these different processes? I hope that such safety considerations will not preclude the development of what I see as particularly exciting ways of reducing environmental pollution. How will those new ideas be encouraged? Many have already received development funding. In paragraphs 4.1 and 4.7, the report recommends fiscal encouragement as the only real answer.

I am sure that it is a coincidence, but today in an Answer to a Written Question in another place about low sulphur diesel Glenda Jackson states that the Government plan to reduce by 1p a litre the tax on low sulphur diesel as soon as the EU derogation procedures have been completed. That is a great start. I am not sure that 1p a litre will make much difference. There has been worldwide development of petrol and diesel engines for many years; they are extremely efficient and cheap. If we are to introduce new, more environmentally friendly fuels and equipment there has to be significantly greater fiscal encouragement. That needs to be balanced by a fiscal disincentive on fuels which pollute.

I welcome the report. I hope that the Government will consider it carefully and take action to encourage those developments. I regard the needs for cleaner fuels as totally fitting in with the Government's transport policy about which we have heard much in the past month.

5.42 p.m.

Lord Porter of Luddenham

My Lords, I, too, thank the noble Lord, Lord Dixon-Smith, for his able leadership of the committee and the excellent summary which he has presented to your Lordships today.

There are many less polluting alternatives than the fossil hydrocarbon fuels which dominate the energy scene at present. The committee considered a wide range of them, as has been described by the noble Lord, Lord Dixon-Smith. We may be forced to turn to some of those in about 40 years' time when world resources of oil and gas begin to decline.

But authoritative statements by such bodies as the World Energy Council suggest that until then fossil fuels will continue to provide energy for most purposes, including in particular transport. On that rather short timescale, it is difficult to see where else the energy is to come from, especially as the population will double in that 40 years and the 8 billion people in the developing world will no more accept shank's pony as a vehicle than do those in the developed countries today.

It is possible in principle, and increasingly in practice, to reduce emissions of pollutants which are injurious to health such as nitrogen oxides, sulphur oxides and particulates of carbon. Our committee received some quite good news, some encouraging evidence, on the progress that is being made with the internal combustion engine. For example, the Automobile Association told us that, A car built and fitted with a catalytic converter in 1996 produces less than 10 per cent. of the toxic emissions of a car built in 1990". That is just six years earlier. So in time we can look forward towards, if not zero, smaller toxic emissions from new vehicles.

But outstanding culprits at present, as the noble Lord, Lord Dixon-Smith, pointed out, are the vehicles built years ago, some of which, especially the large old diesel engines, seem to go on for ever. In paragraph 4.11 one of our committee's more important recommendations is that emissions standards for the existing fleet should be progressively tightened. Such legislation would have to cover vehicles coming here from overseas and some sort of international co-operation would be advisable to prevent the selling on of those cheap and nasty offenders to poorer countries. I hope that the Government will be able to take all those factors into account when they introduce new legislation, as the committee recommends.

But those pollutants are only half the problem set us under the title Towards Zero Emissions for Road Transport. The second half—it has been referred to several times—is the greenhouse gases, especially carbon dioxide, which are not toxic at all but are part of the committee's remit because of their probable involvement in global warming.

Carbon dioxide is an unavoidable consequence of burning carbon or hydrocarbons and the amount of carbon dioxide put into the atmosphere is stoichiometrically equal to the amount of carbon in the fuel which is burnt. We can do nothing to get round that. None of the alternatives in the report is able to suggest a solution to the problem.

Electric cars are run on electricity which has to be generated elsewhere. Hydrogen has to be made by processes such as electrolysis, with possible minor exceptions to which I shall refer in a moment. These merely move the site of emissions from the roads to the generating stations. This would be beneficial with polluting emissions of the kind to which I referred first, which are so troublesome in cities, but the greenhouse effect is global and the place, or even the country where these long-lived gases are emitted, is irrelevant—even to the "nimbies".

The pollutants in the first category of gases—those harmful to health—are there for everyone to see or smell. The problem is with us now. It is acute and needs urgent action. The effects of carbon dioxide on climate change are less noticeable and longer term.

Nevertheless Britain is obliged under the Rio Agreement, and its own subsequent United Kingdom climate change programme, to reduce carbon dioxide emissions. How can we do that? There are only two ways. First, we could reduce the amount of energy we consume. But our contribution will have little relative effect, except by example—which seems to be ignored anyway by the United States and Japan. We are a small player on the global scale and will become progressively smaller compared with the developing countries.

The other way is to use energy sources which are not derived from the burning of fossil fuels, especially in the developing countries. There are two such sources large enough to make significant contributions: nuclear energy and solar energy in all its forms. The former has its own pollution problems, and the committee had little to say about it except that, the use of nuclear energy to produce hydrogen may have to be considered if the problem of global warming continues to be intractable". We shall have to have energy from somewhere.

With solar energy, the research effort and expenditure on development have been negligible compared with nuclear energy. The reason is not far to seek. It has been said that, if sunbeams were weapons of war we would have developed solar energy decades ago". Even so the present contribution of solar energy in comparison with nuclear is considerable in the developing countries, where 12 per cent. of the energy is from biomass and only 5 per cent. is nuclear.

The report states in paragraph 4.31 that, A truly sustainable form of hydrogen production would be from solar energy. Research into cheap and efficient photovoltaic cells would assist the large-scale production of hydrogen through electrolysis". This is true, and a great deal of research is in progress, as will be evidenced, for example, at the international conference on future directions in photovoltaics to be held at Imperial College early next month (on 7th July).

But in conclusion I should particularly like to draw your Lordships' attention to a new and potentially important avenue of solar energy research which is referred to briefly in paragraph 4.26 of the report. This says: one area which may be important … is research into plants, possibly using genetic engineering, to increase the amount of fuel which can be produced and to reduce its cost". The noble Lord, Lord Dixon-Smith, pointed out what a very large area would be necessary to produce a significant amount of such fuels in this country. However, diesel fuels from oil bearing plants such as rape seed are already in use in small quantities in Germany, Italy and France. Unfortunately, at present the efficiency of conversion of solar energy incident on the leaf-to-oil fuel energy is miserable. It is less than 1 per cent. in most plants (and less than 0.1 per cent. for the oil bearing seeds), though possibly thermodynamic efficiencies exceed 25 per cent. Efficiencies of that kind are already achieved in photovoltaic cells. Research and development aimed at increasing yield and lowering the costs of production is the key to progress.

Genetic engineering is one of the most rapidly developing of the sciences at present. Methods of gene transfer via recombinant DNA techniques into the nuclei of plants are becoming common and many of these techniques are now within the capabilities of third year undergraduates. Some of these have been developed, in the United States for example, to produce a variety of designer oils by transgenic gene transfer. The possibilities in engineering new plant species specifically designed to increase the efficiency of photosynthesis and the storage of solar energy can hardly be exaggerated. I hope the Government will play their part in encouraging these developments, by reducing, for example, the duty paid on biofuels, as already happens in other European countries and as is recommended in paragraph 4.20 of the report.

5.53 p.m.

Lord Crickhowell

My Lords, I warmly thank my noble friend Lord Dixon-Smith for so clearly introducing this most valuable report. I must declare an interest as a committee member of the Automobile Association, which gave evidence to the committee. The AA has over 9 million members. With their families, they represent a sizeable proportion of the population and the electorate. They are pretty representative citizens. I suspect that most of them are deeply concerned about environmental matters.

The car is here to stay. It is not a luxury but an absolute necessity for many, particularly the elderly, the handicapped, and mothers—the proportion of car users who are women is rising very rapidly.

The report covers scientific issues in great detail and is most valuable. If I have a criticism, it is that its analysis of economic matters and taxation issues is insubstantial. The tax recommendations that it makes are almost casual. But if we are to make progress in reducing pollution, they are of central importance.

Car drivers pay £19 billion a year to the Treasury. Table 7 in the report shows that road vehicle users as a whole contribute £26 billion; the car users' contribution in fuel tax alone is £19 billion.

The previous Government argued that the regular 5 per cent. increases in fuel tax were imposed for environmental reasons. I suspect that the new Chancellor will produce exactly the same arguments. However, while differential taxes may be very effective instruments, we need to be a little cautious about the view that a general increase in fuel taxes has a substantial impact on car users' habits. The evidence is rather different. My noble friend Lord Dixon-Smith gave the remarkable figures for the reduction in the price of a barrel of oil. However, what he did not say was that governments have taken full advantage of the situation by very substantially increasing the price paid by the road user at the petrol pump. Road users have consistently gone on using their cars and have indicated in every survey conducted by the AA that they will make other sacrifices before cutting down on the use of the car and the mileage that they cover. In addition, indiscriminate use of fuel tax is an inefficient form of taxation.

Interestingly, in paragraphs 3.11 and 3.16 of the report there are quotations from the Government, who, we are told, have restated the position that, they were unconvinced that the transport sector should be targeted specifically, and that it was necessary to reduce CO2 emissions cost-effectively across all sectors". I entirely agree with that verdict, and it is borne out by the information in the table in the report which shows that road transport produces 22 per cent. of total CO2; 28 per cent comes from domestic uses; and 28 per cent. from industrial uses. We therefore need to approach the problem on a rather wider scale than simply thinking it can be solved by an increase in fuel tax. The present policy is not very efficient; it is regressive, disproportionately hitting the retired and those on low pay.

It helps to make a point repeatedly made by the AA that there needs to be a fundamental reform of motor taxation. The work undertaken for the AA by David Newbury, professor of applied economics at Cambridge University, points the way.

We need to separate taxation on the one hand and charging for the use of roads on the other. Alongside an integrated approach to transport policy, which we certainly need, we need a clearer structure and purpose for motoring taxation. If we have a clearer structure and purpose, understood by users, then we have some real hope that tax incentives and penalties will have the impact that we want them to have.

To look beyond financial matters, people talk as though pollution caused by the car is getting worse. I have heard Members of this House indicate on a number of occasions in debates on the environment that they believed that to be the case. The report confirms that, despite the increase in traffic volume, the situation is getting better. The AA has commissioned research tracking emissions from vehicles. The results are to be announced on 30th June at a presentation in the Palace of Westminster. They indicate a dramatic reduction in toxic emissions since the introduction of catalysts, and that the emissions of CO2 have at least stabilised. We have also seen great advances in diesel engine technology.

The fact is that the combination of European Union legislation and financial incentives has proved remarkably effective. The European motor industry's research prediction is that between 1992, when catalytic converters were introduced, and 2010 the amount of toxic pollutants in terms of tonnes per year due to traffic will decrease by about 75 per cent. across Europe as a whole. It is good to know that we are making progress, and the report indicates that we are likely to make more progress.

Certainly there are no grounds for complacency. As a former chairman of the National Rivers Authority, I am particularly concerned about something mentioned in passing in the report—namely, the environmental damage caused by spillage, accidents to fuel-carrying vehicles and poor storage, which is a very significant problem.

As far as emissions are concerned, as we have heard, the big problem lies with older cars, buses, taxi fleets and delivery vehicles. There is a clear need for targeted fiscal incentives and tighter regulation here. The committee rightly emphasises the importance of higher regulatory standards for existing vehicles. Reference has been made to the MOT test, to spot checks and to use of the new local authority powers of enforcement. The committee, perhaps rather too easily, dismisses the possibility of a scrappage scheme, but tighter enforcement might have the same effect. If people fail their test, they will simply have to get rid of the older, heavily polluting vehicles.

While it is clearly very important to improve the public transport system, it is an awkward fact that some of the worst polluters are buses and taxis. Sixty per cent. of trucks and buses in the United Kingdom, most of which have diesel engines, are more than 10 years old. A very high priority must be the kind of incentives referred to by my noble friend to change the fuel use of these vehicles. If there is an area where tightening of standards is required, surely it is this one?

I should like to conclude by suggesting that as regards the motorist we need to point to the good things as well as the bad. We need to encourage rather than simply scare people about what is going on. The motorist is not an enemy; motorists rarely use their vehicles selfishly, as a luxury. Properly treated, I believe the motorist is an ally and a partner. We all use motor vehicles. I was amused that, as I got into a taxi yesterday at the entrance to the House, out of it stepped one of the most well known environmental campaigners—coming, no doubt, to some important meeting about the environment. We were both using a polluting form of transport, a London taxi. Whatever our interests, however much we may be involved in campaigning, the truth is that we need the motor car or its public transport equivalent. We must therefore encourage progress and the kinds of measures that the report suggests.

The report is most valuable. It shows that progress is being made and the enormous potential which exists if we stimulate the right kind of technological advance in the future.

6.4 p.m.

Lord Walton of Detchant

My Lords, it will not have escaped your Lordships' attention that, following the recent G7—or should it be G8?—summit in Denver and the subsequent meeting in New York, the question of vehicle emissions, toxic emissions in particular, and CO2 emissions is the flavour of the month.

It was a great privilege to serve on your Lordships' Select Committee on Science and Technology. I found it very rewarding to be a member on the Sub-Committee which produced the report, under the able and judicious leadership of Lord Dixon-Smith. I should like to echo his tributes to Professor Bell and to Jake Vaughan, the clerk to the committee.

A question that the Sub-Committee asked itself in the beginning was why it was necessary to reduce emissions. It is clear from the report that one very good reason is because of the adverse effects of toxic emissions. Particulates are, unfortunately, an effective cause of respiratory disease, including asthma. Carbon dioxide, nitrogen oxide and its derivatives, sulphur and lead, all have adverse effects on human health; and vaporised hydrocarbons play an important role in causing lung cancer and other significant illnesses, although the hydrocarbons in vehicle emissions pale into insignificance, so far as the individual is concerned, when compared to the adverse effects of tobacco smoke.

There is also an important environmental effect, as my noble friend Lord Porter of Luddenham, made clear, relating to carbon dioxide, the ozone layer and global warming. I shall not elaborate further on that.

The report makes a number of clear conclusions and recommendations. I trust that it will be possible for the Minister to indicate what the Government's response to the recommendations will be. For instance, are the Government committed to moving towards stages III and IV relating to laying down strict emission limits? Will they apply pressure on the European Union to amend its testing cycle? What efforts will they make towards further reduction of sulphur, petrol and diesel? How can they impose tighter standards for vehicle emissions, relating not so much to new vehicles as to the existing fleet?

Much work has already been done, as several noble Lords have said this afternoon: for example, in increased fuel efficiency, lean-burn engines, electronic management systems for both petrol and diesel vehicles and the introduction of biofuel, biodiesel in particular, even though the resultant use of biodiesel can only make a relatively minor contribution because of the cost and problems related to producing more such fuels.

I should like to echo strongly the points made by my noble friend Lord Porter about the crucial importance for the future of genetically engineered fuel from different crops. This is something which will have a very striking effect in future because DNA recombinant technology is daily teaching us new lessons.

Much is said in the report about the use of alternative fuels. Electricity is a problem. It has to be produced, often by fossil fuels. We know that the efficiency and range of existing vehicles leave a lot to be desired. Is enough work being done on the production of more effective batteries, lithium batteries in particular? I am personally much attracted by the prospect of hybrid vehicles, which already exist, the idea being that a reasonably efficient vehicle can run on an electric engine in an urban environment, but once it leaves that urban environment it can switch over to an engine fuelled by petrol or diesel, which has the effect of recharging the electric batteries. Admittedly the cost is not insubstantial, but I believe that, as the report makes clear, the potential use of such hybrid vehicles has not been as fully exploited as it might have been.

When I learnt about natural gas vehicles, I expressed some concern in a meeting of the sub-committee about whether the storage tank necessary in the boot of a vehicle would make it difficult for the vehicle to carry my golf clubs. But when I went to the centre in Slough and saw a vehicle—and drove it—I was greatly impressed by its efficiency and its performance and that the part of the boot occupied by the storage tank for the natural gas was relatively small.

Admittedly, there are problems in producing a sufficient number of outlets for natural gas. It is not something which can be done without substantial cost. I believe that it would be a great help if the Government could be persuaded to arrange for more of their own fleet of cars to be fuelled by natural gas. Perhaps they could also see what action could be taken to introduce natural gas powered buses in cities such as London. Without question the resultant reduction in vehicle emissions would be substantial.

As the noble Lord, Lord Dixon-Smith, said in his splendid opening remarks, the fuel cell carries considerable hope for the future. The company Ballard of Vancouver has demonstrated in buses already being driven by fuel cells, which are in turn powered by hydrogen, that this is a very substantial prospect for the future. I should like to ask the Government, as I do not know sufficient of the science, whether the possibility of the alternative fuel for fuel cells—namely, alcohol, which has been used in a number of experiments in the past—has been sufficiently explored and exploited. There is always a concern about the storage of hydrogen in vehicles to drive such fuel cells. Alcohol may perhaps have been proved to be less efficient than hydrogen but I still believe that it deserves further exploration.

Like the noble Lord, Lord Crickhowell, I must declare an interest as a member of the council of the AA Foundation for Road Safety Research. Like him, I have been greatly impressed by the fact that the AA has commissioned the National Environmental Technology Centre to produce a quarterly index for emissions of nitrogen oxides, carbon monoxide, benzene, volatile organic compounds and fine particles. It is also tracking emissions of CO2. That work has demonstrated, as will be said in another place on 30th June, that toxic emissions from road transport have fallen by at least a quarter since 1992. As the noble Lord said, the work on CO2 has shown that, despite continued traffic growth, the CO2 emissions from vehicles have not risen, which must reflect the increasing fuel efficiency of vehicles and voluntary agreements by manufacturers.

That demonstrates substantial progress. But as the report of the sub-committee and your Lordships' Select Committee on Science and Technology so clearly shows, much more needs to be done. But if, for instance, the Government felt able to accept the recommendation to reduce the duty on natural gas used for vehicle propulsion to the EU recommended limit and if many of the other recommendations in the report were to be implemented, we should be taking major steps towards reducing toxic emissions and CO2 emissions for the future.

6.14 p.m.

Lord Vinson

My Lords, it was a great honour to serve on the committee under the noble Lord, Lord Dixon-Smith. I believe that both this House and the country in general over the years will become increasingly indebted to his leadership in this matter.

The committee's report is an honest attempt to come up with workable solutions. But, in recommending them, we were all conscious that very few prognostications, particularly on scientific matters, work out in the way we think they will and that judgment is fallible. Within its remit, however, the committee has come up with proposals that could undoubtedly in both the short term and the long term have a useful impact on lowering urban atmospheric pollution.

The committee worked under a very limited remit and I too would like to use this opportunity to take a slightly wider look at the overall problem of which vehicle emissions are a part. In doing so, I must declare an interest in that I was for some time the chairman of an American company at the forefront of pollution control both for utility power stations and increasingly for mobile and stationary diesel engines. I still have links with that company.

That background makes me believe that any pollution control measures introduced at national level are best done with regard to the wider global scene. We should be careful about tokenism—introducing measures that look good politically but bring little real benefit. We should be particularly careful not to introduce solutions that could handicap our national economy but bring negligible global benefit. Tokenism is a real danger and there are signs of it appearing on the political scene already.

I turn to CO2 pollution. As has been mentioned, it is likely but still unproven that CO2 is responsible for the current climatic changes. After this week, one could believe anything! But if we assume that it is at least contributory, then the problem is obviously an international one, as was said so well by the noble Lord, Lord Porter. Control measures introduced in a country the size of Britain, frankly, will not affect the global atmosphere to any measurable degree. However, it is important that we lead by example. Again, that was mentioned by the noble Lord, Lord Porter. I believe that our own modest measures could have a far wider global impact if, by practising what we preach. we encourage others who can affect the global position and can do something about serious global pollution. We can do our bit by offering leadership to achieve world level co-operation over pollution control implementation and world level co-operation over scientific analysis of the problem.

As has been said, to meet their obligations under the Rio Convention, the Government encouraged in this country a switch from coal to gas. But other countries that are far bigger polluters than ourselves are not necessarily in so fortunate a position. China, I believe, has over 400 coal-fired power stations. It is, indeed, a world polluter, both by CO2 and NOx. But necessity is the mother of invention. Fortunately, it is now possible at least substantially to clean up NOx and other toxic emissions, which are so damaging, from coal-fired power stations, old and new, for a cost that only raises the price of electrical generation by a factor of some 5 to 7 per cent. A major problem in those countries is cost of the huge scale of the problem.

Major emissions from utilities and heating furnaces are obviously the first point at which pollution should be tackled. Countries like the United Kingdom should both instigate and play their part in developing the appropriate funding to help the western world clean up the under-developed world, helping those who have a serious pollution problem as we tackle our problems of much less degree. But, self-evidently, the conversion from oil to gas does not in the long term solve the problems of potential heating by carbon dioxide. Frankly, every attempt should be made to reduce the consumption of fossil fuels. The switch from coal or oil to gas helps to ease, but does not solve, the problem; neither, of course, will fossil fuels last for ever.

But there is one long-term source of inexhaustible CO2-free power; namely, nuclear power. The Chernobyl disaster was at least valuable in alerting the world to the dangers of nuclear power. But it also did much harm by changing the political perception of energy generated in that way. However, new nuclear plants continue to be built worldwide and nuclear power is already a major contributor to worldwide CO2-free energy production. I believe that statesmen at all levels should begin to stress that, ultimately, nuclear power and probably new forms of yet undiscovered fusion are the only long-term route to substantial CO2 reductions. Frankly, the green movement cannot have it both ways. If we are concerned about CO2 we have to be realistic about the practical alternatives.

Meanwhile, the problem of the disposal of nuclear waste is a complete red herring. It is already being disposed of. The problem is a political rather than a scientific one. I raise this matter because those advocating a national policy for CO2 reduction should have in their minds long-term solutions. Nuclear energy is the solution that dare not speak its name. But I believe it is a solution to which the world will have to return.

I turn now to the heart of this debate: vehicle emissions and the problem of pollution, particularly in cities. Our report was constrained within its brief, and its recommendations within that context are wholly practicable. But the enforcement of measures designed to reduce vehicle emissions should, I believe, be coupled with the control of the other major source of urban atmospheric pollution—namely, the burning of oil for domestic and commercial purposes. In cities, the flue gases from many a block of flats are as potentially polluting as many vehicle emissions and should be tackled simultaneously, as recommended by other learned commissions.

Inescapably, the car is with us, as so clearly enunciated by my noble friend Lord Crickhowell. As the report also shows, the car is not going to go away. Every teenager dreams of owning one. The national transport system wholly relies on the internal combustion engine; meanwhile we have no alternative but to learn to live with it. Every forecast indicates that we shall have another million cars on the road in this country over the next 10 years or so. To throw up our hands and to stop road building is to run away from the whole problem. Road congestion in particular is a major source of pollution, quite apart from the great economic cost to the country. To maintain that our motorway programme is finished, when on the A.1 we still have roundabouts in the Cambridge area and single carriageways north of Newcastle, is quite unrealistic. The improvement of roads, such as in the examples just quoted, can relieve congestion, relieve three-mile tailbacks at roundabouts and materially reduce pollution.

The cut in the road building programme by the previous government was done as much as anything to help to knock a penny off income tax but was, in my view, a wholly false economy. The country needs to proceed with traffic calming, traffic rationing and traffic improvement measures designed to reduce congestion and the attendant pollution that comes from it. As the report so clearly states, we have to live with individual transport. It is a freedom that people want and, although we may try to ration it, I do not believe that we shall seriously reduce the use of it.

Meanwhile, existing forms of the internal combustion engine can be improved, cleaned up and made more efficient. As the report says, tax and revenue concessions should be introduced to encourage these cleaner and better developments. In the long term the answer could well be fuel cells, but it may not be exclusively so. Probably two or three solutions for zero emission from road vehicles will occur in parallel—let a thousand hybrids bloom.

Who knows what developments of the electric battery have yet to be discovered? I am not pessimistic. An all-electric vehicle is already with us. Battery life may not in the future be the problem we consider it to be now. One can visualise a pack of batteries, suitably designed, which could be exchanged at the equivalent of petrol stations. Clink, clunk, as one assembly is pulled out from a pre-designed compartment and replaced at one stroke with new. One could visualise changing batteries as people used to change horses. It would be a totally zero pollution solution, as indeed is the fuel cell, particularly when in both cases the basic source of electricity has been generated by clean power in the first place.

Putting more money into public transport systems will help, but it will not replace the individual car or truck. Railways are not in themselves the answer. It is easy to forget that a railway journey is a three-point journey. Even if a rail infrastructure existed, where commercial transport is concerned it would be far more wasteful and would create more traffic than direct door-to-door deliveries, except, untypically, on very long hauls.

In conclusion, I hope that governments of all persuasions will recognise the huge importance of cheap transport and the fact that the demand for the car is not going to go away. None of us can wholly foresee the future. Above all, I hope that the Government, when introducing measures, will resist tokenism. I hope that they will resist sneaking in tax rises under the cloak of environmental benefit and will remember that higher taxes on transport and fuel hurt the poor rather than the rich and hurt the rural dweller who has no public transport alternative. I hope they will remember that inner-city pollution, indeed, global pollution, are worldwide problems, so we should aim to encourage international research and international co-operation to find long-lasting, sensible solutions. I am sure that this report will encourage that process. I was honoured to be a member of its working committee.

6.25 p.m.

Viscount Simon

My Lords, this excellent report, as we have all heard, underlines various aspects concerning vehicle exhaust emissions and we must acknowledge and thank the committee for producing it, based upon the immense amount of evidence presented to it.

Page 8 of the report states that the Government have predicted that global temperature will rise by 2°C towards the end of the next century. There are numerous learned bodies who agree with that statement, but there are some who say that they think the rise in global warming is being reduced by volcanic gases. Who is right? I do not know; I am not a scientist.

However, it is estimated that road traffic accounts for about 10 per cent. out of a total of 26 billion tonnes per annum of man-made emissions and that natural emissions total 770 billion tonnes per annum. So, is a reduction in CO2 and other vehicular emissions to be encouraged? Of course it is.

We have heard noble Lords today asking, "Where is the energy to come from?" A cyclist only pedals and uses energy when it is actually needed. One rarely sees a cyclist pedalling downhill and almost never when stationary. Some years ago, Volkswagen manufactured a catalysed diesel engined vehicle embracing this very principle. The Golf ecomatic's engine stopped when no energy was required and could be restarted by pressing the accelerator. The electronic wizardry achieving this mode of operation resulted in a 50 per cent. reduction in urban fuel consumption; exhaust gases, particulates and noise in urban areas were also greatly reduced.

This vehicle was not successful because it was too advanced for people to appreciate the environmental and financial benefits at the time. Such a pity. This form of propulsion should perhaps be investigated again. If this car were to be sold again, encompassing further technological advances, it might now encounter a better informed market. Presumably, this principle could also be applied to commercial vehicles, thereby providing benefit to us all, and it must be appreciated that large engines produce large amounts of pollution, so the benefit would be that much greater than with cars.

At the moment, the size of particulates is measured down to PM 10s. However, as much smaller particulates emitted by diesel engines and, to a lesser extent, by petrol engines cause health problems, should not measurements of PM 2.5 be introduced? I am not aware of what, if any, difficulties might be encountered by this, but surely it would be of relevance because smaller particulates get deeper into the lungs and spread more widely from the emission source.

The stop-start VW ecomatic had much reduced emissions due to its very innovative mode of operation. It is, however, encouraging to learn that it is thought that within five years diesel engines will be emitting virtually no particulates. But, as the report correctly acknowledges, diesel engines have a long life and consequently any improvement will be slow in coming.

Technological advances are being made all the time. Mitsubishi has a production vehicle powered by a direct injection petrol engine which increases miles per gallon consumption and reduces exhaust gases. Other manufacturers have engines which will enable vehicles to achieve 100 miles per gallon—advancement is the nature of enforced evolution.

These are but two examples of recent advances, and others will be forthcoming, as mentioned earlier by the noble Lord, Lord Dixon-Smith, resulting in new types of vehicles producing only small, if any, amounts of exhaust gases whilst, maybe, using new types of fuel. This report explores various ways in which this can be achieved and will undoubtedly be referred to for a long time to come.

6.30 p.m.

Viscount Chelmsford

My Lords, the Select Committee has undoubtedly given us a very detailed summary of fuels and types of propulsion. I have learnt a great deal from it. I was fascinated to find that efficiency has so improved that the new passenger car in 1996, when compared with the new passenger car in 1976, 20 years earlier, emitted only 5 per cent. of the hydrocarbons, the NOx and the carbon monoxide of that earlier model. The Select Committee's report shows us the problem. If you have 20 times the number of cars that you had in 1976 travelling the same mileage, you have not made any change in emissions; alternatively, if you have the same number of cars but they travel 20 times as far, again you have not changed the emissions. On top of that, you have all the cars that are not new. So there are problems—big problems. One big problem is that you cannot cut the amount of pollutants significantly without increasing CO2, or vice versa.

The Select Committee reviewed alternative fuels for use in the internal combustion engine. There I found some fascinating details. I was amazed to learn that Italian hotels, having used their cooking oils, pass them out to be regenerated as fuel for cars and that Brazilians drive on fuel which is made from alcohol in sugar cane. But, sadly, neither of those innovative approaches seemed to score very well with the Select Committee. Nor, in fact, did other types of fuel.

I put it to the House that the recommendations of the Select Committee reduce to: carry on trying, especially on fuel cells; let us do more to motivate research by tax breaks; and—this was mentioned only once but is perhaps rather important—enhanced MoT tests in order to get rid of the badly polluting older vehicles. However, I do not think that adds up to the 20 per cent. further reduction in CO2 which was recently promised by the Prime Minister.

Perhaps I may refer to the terms of reference of the Select Committee. Those were: to examine whether technology will be able to maintain the benefits of road vehicles while reducing their adverse effects, particularly pollution and CO2 emissions.

They went on to say: Issues such as improving traffic flows (through telematics or road building) … may be important elements of an overall transport strategy, but they lay outside the scope of the enquiry". It was a very detailed inquiry and it had to have boundaries—so I am sympathetic to that—but it is unfortunate that this was the third time that telematics have been omitted from debates in your Lordships' House in the recent past. They were omitted from the Road Traffic Reduction Act, which invited local authorities to reduce traffic but did not tell them how, and they were omitted from the report on sustainable development, which we debated on 12th March. With your Lordships' permission, I intend that they shall not be omitted today.

Intelligent transport systems are now sufficiently developed to play a significant part in reducing emissions, in making public transport more acceptable and in achieving an integrated transport policy. I declare an interest. I am president of ITS Focus, which is a public sector/private sector partnership, a not-for-profit association, trying to improve general traffic conditions through the use of intelligent transport systems. It is my job as president to try to get that message across.

Happily, the Government have just announced a fundamental review of transport policy which, it is to be hoped, will offer us an opportunity to try to see what we can do to help in that context. The Minister for Roads very kindly wrote to me the other day saying that a national/local government working group is looking at congestion charging, which is an important part of what we hope to be involved in. Congestion is a major source of unnecessary emissions, as other noble Lords have said today. If we can reduce congestion, we can reduce emissions without necessarily having to take the traffic off the road.

I shall set out some of the things ITS can do. It can act as the congestion "stick" by helping road pricing; that is to say, the message that explains that the pre-paid card on your car as you enter a zone of high charging has been debited or the alternative message that says that there is nothing to authorise you to go through so your registration plate has been recorded. Those communication messages are all part of ITS. It also helps with the "carrot" of trying to improve congestion by inviting motorists to go for alternative routes, either by road signs or by messages into their cars. Either way, it helps to improve the traffic flows. However, I would suggest that the Select Committee was wrong on one point—when it tried to equate telematics with road building only. Telematics is far wider.

What can we do to help the public to move towards public transport? We know already that buses are moving down red routes and that they are due to have traffic light priorities. As they approach a traffic light, it will automatically go green. We hope to fit cameras on buses so that cars getting in the way on red routes will have their number plates recorded. There is Prestige, which is an important ticketing system to allow people through barriers faster. It will be used on London Underground. From the point of view of congestion, it will be used to get people on to buses more quickly. They will just wave their cards at the reader as they go past. They do not have to put them in the machine. All these things are making buses better to use. In this connection it is great that the Minister for Transport yesterday apparently called for more bus lines, better information on buses, more partnerships and measures to keep buses moving. ITS can help in all those areas.

We are trying to do other things to help the integrated transport policy. We have trip planners and touch screens, such as the Southampton Romanse project, which will give information to travellers not just on how to get from A to B but also on how to get from A to B by alternative or several different means—combinations of bus, car, coach, rail and so on. There is already on the Internet through British Telecom a mass of travel information for those who can reach it. These things are helping to set up the integrated transport for which we are all looking.

No one claims that ITS will cure the world's transport ills. We simply claim that it will help to cure them. ITS products are already coming on the market—in the USA and Japan. In Europe, Germany and Holland are major competitors. It is important that the UK is not left behind. One existing result of ITS which may be of interest to the House concerns the Traffic Master application, which is a small screen in one's car. It displays a map of motorways and major roads and shows where the congestion is. That is based on 2,500 road sensors on those motorways and major roads. Traffic Master was able to record that last year traffic on those roads grew by 5.8 per cent. It also recorded that the average M.25 motorist wasted the equivalent of half a day in a year due to congestion. We are beginning to get some rather modest and fairly crude statistics but we need more of those statistics.

Such devices allows one to use alternative routes. For example, I regularly come up the A.3 to London. I know it is quite possible that there will be congestion at the beginning of the Kingston bypass. When the little arrow shows me that traffic has slowed down to five or ten miles an hour, I nip around via Esher and avoid it. A lot of people could do the same. I hope the Minister can confirm that transport telematics has a part to play in our efforts to strive for zero emissions.

6.39 p.m.

The Earl of Selborne

My Lords, I too served on the sub-committee and I have reason therefore to be grateful to my noble friend Lord Dixon-Smith for the way in which he introduced this debate and indeed for the way he chaired the committee. I also had another go at this whole subject as a member of the Royal Commission on Environmental Pollution. Three years ago we produced a report which dealt at some length with the wider issues, many of which we have debated today and which, quite frankly, were not in our report. Telematics is one such issue. I am grateful that our chairman took a very strong line and prevented us from straying into so many of these areas which clearly a full report on integrated transport has to address. There are 112 recommendations in the Royal Commission report. Noble Lords may or may not be pleased to know that the Royal Commission, of which I am still a member, is returning to the subject once more. We shall be producing a discussion document updating our previous report because so much has happened.

One of the things which has happened has been the sub-committee report. I am very relieved to say, having been a party to both, that they are compatible. The sub-committee report tries to limit itself very firmly to accepting that the internal combustion engine is here to stay for a very long time. It gives great benefit to the quality of life, the economy and to mobility. I do not think that we have to apologise. I am sure that my noble friend Lord Crickhowell does not seriously expect the most fervent environmental protester to walk everywhere. He should surely be allowed public transport and a taxi. I suggest that he should certainly be allowed a car as well. Let us not apologise for the fact that we all need cars and that we enjoy using them. What we are simply trying to do is to reduce the adverse impacts. If 10 years ago we had accepted the adverse impacts, which we now know have been greatly reduced thanks to the catalytic converter, then we would have been misguiding ourselves into believing that such consequences were inevitable. Is it inevitable that the impacts that are made on society at the moment should continue?

I do not have to reiterate the impacts that we have heard about in this debate, but they can be divided in three categories—that is to say, noise, greenhouse gases and emissions which are toxic. Noise is beyond the very narrow remit which we set ourselves. All that one can say on that is that while we continue to build roads—and my noble friend Lord Vinson knows that we are still building them although apparently not as many as he would wish—why not make it standard practice, at least in urban areas, to use whispering cement surfaces, which

are very much kinder from the point of view of noise? We do not do that as standard practice. If one were to cost out the aggravation and pollution caused to those people who are unfortunate enough to live near these roads, it would be clear that not to do so is a very poor economy.

Greenhouse gases were part of our remit. As the noble Lord, Lord Porter, reminded us, there is a very direct correlation between the amount of energy expended and the emission of greenhouse gases. There is nothing that one can do about it. If one is going to burn energy, then inevitably one is going to cause the emission of a greenhouse gas. However, there are incentives that society can introduce in order to change the culture which insists on ever larger cars and cars which consume ever more energy. Our modest recommendation for a cut-off of the vehicle excise duty attempted in a perhaps rather naïve way to suggest the kind of direction in which people might change their expectations of what the car should do. We all now tend to drive larger cars than we did 20 or 30 years ago. Most of us now believe it to be inevitable that we should have power steering and air conditioning, both of which increase energy consumption.

What can we do to reverse this ethos and make it rather more socially acceptable to drive a smaller car? We can put in economic instruments to achieve that. One can perhaps have priority parking slots for the small car. One can certainly do something about the company car. It still seems to be the expectation that the grander one becomes the larger one's car. That is still very much a part of our society although I believe that many companies greatly regret that they got on to that treadmill. Certainly, central and local government could do more to demonstrate that they really are trying to achieve mobility with lower energy consumption—in other words, they could put into their fleets cars which use less energy.

There are drawbacks to some of the alternative fuels, although in an urban situation liquid petroleum gas is in many ways more desirable. The noble Lord, Lord Berkeley, hoped that the committee would not reject that fuel too quickly because of its safety limitations. The report gives it qualified approval in certain circumstances. But it has to be recognised that the constraints of weight, cost and storage space—despite the fact that the golf clubs of the noble Lord, Lord Walton, fit into the trunk of his car—represent something of an obstacle to wider use. Natural gas is another alternative but again methane emissions have to be noted as a rather more powerful greenhouse gas than carbon dioxide.

My noble friend Lord Crickhowell reminded us that only 22 per cent. of carbon dioxide emissions come from transport. To put it the other way round, as much as 22 per cent. of carbon dioxide emissions come from transport. If the targets which the Prime Minister bravely and correctly set us in New York are to be achieved, there is no escaping the fact that transport will simply have to take its share of responsibility. It is no good saying that there are other sources which can more easily be hit. If transport is responsible for over one-fifth of carbon dioxide emissions, then we have to recognize that we have a real problem on our hands. We recognise that we are going to have more cars. We have to reduce their fuel consumption. There are already cars which can travel 70 miles to the gallon, although I suspect that very few of us drive them. I believe that there are many ways in which we can make the car more attractive to the consumer.

Lord Crickhowell

My Lords, I am very grateful to my noble friend for giving way. One should not attack one particular source of pollution. If one is to apply sensible economics, one should attack equally the other producers of that pollution. We need to have an equal attack on all the sources and not disproportionately load one source.

The Earl of Selborne

My Lords. I do not believe that there is any danger of the motorist hearing disproportionate cost at the moment. As regards motor freight in particular, if one were to calculate the external cost and the adverse impacts on society which the report tries to address, it would be very difficult to justify the present level of tax. The private motorist certainly pays much nearer the external costs which fall on society, though I suspect that one could argue that the costs could and should go up if the external costs are to be captured.

It is the toxic emissions that the report has to address most seriously. A technical fix is coming. We know at the moment that, were it not for the particulates, diesel would in many ways be a greener fuel. The problem is that they are an extreme hazard, particularly in urban areas. It is not yet possible to use a catalytic converter effectively on diesel engines. But that may well change. There may be catalysts within five to 10 years which will be able to remove or reduce nitrogen oxide emissions from a diesel engine.

However, if we continue to use fuel with a high sulphur content the benefits will be negated. Here is an immediate and obvious technical measure which can and should be imposed as the European Parliament and the committee suggest. One should start planning now to bring in petrol and diesel which contain smaller amounts of sulphur. Indeed, the European Parliament went rather further than our committee, which suggested that the European standard should be 15 parts per million for both petrol and diesel. That proposal has created great anger and consternation in the petroleum industry, which says, like everyone else, "You should hit at a different target. It is most unfair that you should expect us to spend a large amount of capital in Europe on improving our refining procedures."

The European Parliament employed consultants to find out what it was likely to cost a typical motorist if the levels were reduced to 50 parts per million. The consultants worked out that for a typical motorist—whatever that might be; but, for these purposes, the figure was deemed to be 12,600 kilometres of motoring per year—the cost worked out at a modest £5.60 per year. That figure was not accepted by the oil industry, and I am not in a position to say whether it is anywhere near accurate. However, even if it is not accurate, I should still be interested to see the Government conduct a definitive study into precisely what the cost might be.

I accept entirely that there will be a cost. The report suggested that it might cost somewhere between £28 billion and £32 billion to upgrade refining in this country. However, it is already happening because the companies concerned are having to spend that capital elsewhere. The question is not whether they will spend that capital around the world on producing low-sulphur fuels, but whether it will be the United Kingdom population which will benefit from it; or, if we do not protest loudly enough, whether we shall go to the bottom of the capital expenditure programme. If pressure is exerted in equal measure all around the world, there will be great demands on the oil industry's capital.

Members of the committee should not be repentant about saying that we in Britain should lead the demand that Europe should improve petrol and diesel standards with regard to sulphur. There is no problem in technical terms. Indeed, parts of Scandinavia have already imposed low sulphur standards, and we should do the same. The auto-oil programme was deeply unambitious and seemed simply to perpetuate the status quo. The United Kingdom should certainly benefit from the higher standards.

6.51 p.m.

Lord Redesdale

My Lords, I start by thanking the chairman of the committee, the noble Lord, Lord Dixon-Smith, for doing the difficult job of keeping the report to its set remit of considering low emissions. Many of us who served on the committee felt somewhat frustrated that we could not go off on flights of fancy or up the many other avenues that we could have considered. Although the resulting report may be naïve in terms of some of its recommendations—the noble Earl, Lord Selborne, pointed this out—those recommendations are almost achievable. Indeed, the committee was careful to consider what is achievable over the short-term because the problem of emissions is with us all now.

That was brought home to me in a news story on local radio about somebody who tried to achieve the world crawling record. He collapsed after two miles and was taken to hospital with a suspected heart attack. However, it turned out that he was suffering from carbon monoxide poisoning from following the exhaust of his support vehicle which was in front of him. He almost died of the experience. Although that is an amusing event—but not for him—the incidence of asthma among children is increasing in this country. Indeed, my two year-old nephew suffers extremely badly with asthma and, as the noble Lord, Lord Walton, pointed out, the seriousness of the problem cannot be underestimated.

One of the depressing issues raised in the report is the fact that our dependence on the car and on the internal combustion engine is here to stay for the next two or three decades. That position will not easily be changed. However, there are alternatives to the car and we saw many interesting and diverse examples, mainly relating to the engine and the fuel supply because there seem to be very few real alternatives in terms of turning a large lump of steel into something other than a car.

We looked carefully at what is available in the market at the moment. First, we considered gas-powered vehicles, to which the noble Lord, Lord Berkeley, referred. They have certain benefits. Their NOx contribution is much lower and they are a pleasure to drive, as we discovered when we visited a local authority and drove the gas-powered vehicles that it uses at the moment. The committee looked carefully at the overall energy consumption of each fuel. One of the hidden costs of using natural gas is the cost of compressing the gas into the fuel tank. Unfortunately, that detracts from the attractions of that source of fuel.

We also considered the use of electric vehicles. Indeed, the great joys of electric vehicles were impressed upon me almost physically just around the corner from here when I was almost hit by the silent electric vehicle which is used within the Palace of Westminster. There are major disadvantages with such vehicles, however, and I do not believe that they are the vehicles of the future. They are expensive in terms of pollution. They need large batteries which then have to be disposed of. When we visited Germany, I was interested to learn that the Germans actively discourage electric vehicles because although the vehicles themselves do not produce emissions in the immediate locality, they cause vast quantities of emissions from power stations. There is an advance net deficit if one tries to recharge an electric vehicle from a coal-fired power station. The Germans provided the interesting statistic that Britain has by far the largest fleet of electric vehicles of any country in Europe. I believe that we have about 28,000 such vehicles, which is more than all the other European countries put together. The humble milk float is one of the major contributors.

The gyroscope was also considered as a form of propulsion. Although it would work well on a public transport system, especially a train system, I found slightly worrying the thought that if a gyroscope that could drive a vehicle ran away it would have the same force as an explosion of TNT.

The committee concluded that hydrogen is the only fuel that is realistic in the long term. However, it will take us 20 or 30 years to get there. Vehicles will have to be developed so that they are cost-efficient. As was shown, we are getting there in terms of bus transport, but it will still take some time and the infrastructure will have to be put in place. Indeed, the only problem with hydrogen is that electricity has to be used to produce it in the first place. Unless we use electric sources from rivers in Canada, we shall have to look at the nuclear option. I was interested to read about the work being carried out at Cern which might give us a nuclear source in the future which could use highly radioactive components and break them down into low radiation-emitting waste. That is still on the drawing board, however, and until we develop it, we shall be left with a short-term energy source which has a long-term pollution consequence.

Over the long term, technology is important in terms of the petrol and diesel engine. One of the aspects that must be looked at carefully is mentioned on page 15 of the report. I refer to the graph which shows the cost benefits of making fuel more efficient as against the costs and benefits derived from eking out extra value from the petrol. In one respect one is reaching the very limit of what technologically can be done. Obviously, there will be improvements but, as the noble Earl, Lord Selborne, points out, the next great leap forward must lie with the removal of sulphur from fuel. Everyone speaks about the cost of removing sulphur from fuel. It is incredible that one even considers cost and that the oil companies can use it as an argument, because it is the consumer who pays the cost in the long run—even the short run. One of the great benefits of removing sulphur at source is that, although one has to do something with it, it is a better solution than having the sulphur released by car engines onto the streets of Britain.

Another area to look at is taxation. Although my own party speaks about green taxes, I do not believe that a tax can have a colour. Sulphur would be a great form of taxation. I should be interested if the Minister could confirm that in the next Budget vast amounts of money would be spent by reducing taxation on low sulphur fuel. Obviously, that is something that the Minister cannot deal with this afternoon but it would be helpful if the Minister could confirm that that was one option that the Government were considering. Taxation can be used if it gives the consumer a net benefit. If so, it is then a green tax.

As to switching to large cars from small cars, if taxation is heavily weighted on the former and the advantage goes to those who run the latter it will have a net benefit. I do not speak from personal interest. I own a Ford Fiesta 1.25 which would easily fit within the 1.5 limit. I would be quite prepared to accept taxation on vehicles beyond that limit. At the moment we are caught in a trap. It is regarded as socially acceptable—indeed, it is a social icon—to have a larger, more comfortable car. I believe that my Ford Fiesta has done more off-road work than most of the very large off-road vehicles with bull bars that drive round London at the moment. We are caught in a trap because the big cars that cause congestion are designed to be more comfortable. To have a big car which is more comfortable gives one a psychological advantage. One has air-conditioning which costs a vast amount of money and one is cooled while sitting in a traffic jam. One has all of the electrical appliances that make sitting in a traffic jam that much more comfortable. Perhaps one should try to change the moral impetus to make people go for smaller cars. One interesting figure is that 80 per cent. of the energy consumed by a car is used to move the car itself, not the occupants; only 20 per cent. of fuel is used to move the occupants.

That leads one to public transport. If one is to remove the car one must replace it with something else. If there are to be green taxes they should be used to promote public transport. To say that cars must be banned from the centre of London or other places may be electorally dangerous. As this Government have such a large majority, perhaps with the option of another term in government, they may use that long timespan and ban cars now so that the shock does not arrive just before an election and it becomes totally unacceptable. We have transport systems that work. The London Underground, which is underfunded, is one of the greatest examples. A large amount of money must be pumped into the underground, especially the Northern Line. It is an absolute disgrace that the Northern Line should be allowed to carry on in its present form. As I use the Northern Line every day I express an interest here. However, the Northern Line is not referred to as the misery line for nothing.

There are other examples around the country. The Newcastle metro system is a very clean and efficient form of transport. It is also one that combines two forms of transport. Often one drives to the metro or uses a park and ride scheme. Therefore, cars are kept out of the centre of town. One uses one's car to get to the station but the vast amount of energy that one would otherwise use to fight one's way to the centre of town is saved. Another area that should be looked at is driving standards. I speak as a council member of the Institute of Advanced Motorists. That body has done a good deal of work in looking at fuel efficiency resulting from improved driving standards. One can save a vast amount of fuel just by driving correctly.

I turn to the subject of scrappage. One of the issues brought up was the removal of older vehicles from the roads and their replacement with newer vehicles. Britain has a very good record in this respect, mainly because the vehicles that are removed from its roads end up in scrap yards. One interesting fact is that in Germany scrapped vehicles head east and replace the fleets that are in use in Eastern Europe. In the rest of Europe there is a move to scrap vehicles, but those scrapped vehicles do not leave the road.

One issue upon which the report focuses is the removal of emissions in order to help the environment, not only from the point of view of health but from the point of view of the removal of CO2 and global warming. One interesting idea was raised recently by a Formula 1 team; that is, planting trees to the same tonnage as it emits in carbon. That may be an interesting idea. Perhaps the Minister can give thought to the introduction of a green tax to be applied to the purchase of new cars. Instead of going to the Treasury that tax could be used for other necessary purposes. Perhaps it could be directed to a body such as English Nature or the National Forest for the planting of trees.

7.7 p.m.

Earl Attlee

My Lords, for the second time this week I find that I have the pleasure and privilege to come to the Dispatch Box in debate with the noble Baroness the Minister. Yet again I expect that we will be to a large extent singing off the same songsheet. That happy situation may not last for ever. However, there is no doubt that we have a problem with emissions both locally and internationally. The question is: how can we best solve it?

I too should like to thank the noble Lord, Lord Dixon-Smith, and his committee, advisers and witnesses for all their hard work and for the very readable report that we are debating this evening. I looked forward to this debate even before the last election, because I knew that the speakers would he excellent. I certainly have not been disappointed.

Before I make any substantive points, I should declare an interest, as I am president of the Heavy Transport Association.

I have drawn three broad conclusions from the report and today's debate. First, we need to ensure that our current liquid-fuelled road vehicles comply with the regulations and that future vehicles are made to even better standards. Secondly, we need to do much more to encourage a dash for gas in road transport. This particularly applies to vehicles that are used largely in urban areas. Thirdly, and looking to the much longer term, we need to move away from fossil fuels, which by definition must emit CO2, and we look towards hydrogen. Hydrogen can be used either in a combustion engine or a fuel cell. The hydrogen requires power to extract it from other common compounds such as water, and we need to ensure that the electricity used does not itself have an emission penalty from fossil fuels.

Many noble Lords have suggested that emission limits should be tightened still further. Indeed, the report advocates the adoption of stages III and IV EU limits which will come into operation in the years 2000 and 2005 respectively. Perhaps the year 2000 is now a little optimistic. As the report indicates, the progressive tightening of limits in part reflects advances in technology but it is also designed to stimulate technological advances. It is gratifying that manufacturers, particularly of commercial vehicles, are able to meet the new limits while at the same time delivering greater productivity and reliability.

It is pointless, having demanding type approval emission standards for new vehicles when the standards are not relevant to normal use. The report referred at paragraph 3.6 to tests being carried out at 25°C, which is hardly usual for a temperate European climate for most of the year. The Minister will have to apply pressure in the EU to seek an improvement in the way emission performance is measured for type approval purposes.

It is also imperative that vehicles continue to meet the standards for which they were originally designed and built. The report explores this situation and the related difficulty of older vehicles not meeting modern standards. I have a particular aversion to retrospective regulation. I am glad that the committee rejected the submission of the vehicle manufacturers that vehicles should be scrapped after 10 years, and I do not say that just because I have a collection of historic vehicles. If this policy were adopted, the cost of a new vehicle would have to be depreciated over a relatively short period, thus reducing the residual value and significantly increasing whole life costs to the first owner, which may be between £500 to £1,000 for a family car. I believe that this cost could be better put to making the new vehicle even more environmentally friendly. Such an expense would also seriously disadvantage those from lower income groups, who in any event tend to cover less mileage. Clearly, the Government would not want to pay for a scrapping scheme because there simply are no funds available to do so.

I hesitate to disagree with the noble Lord, Lord Porter, but I do not support tightening the standards required for the existing fleet for similar reasons and also because the suggestion in paragraph 4.11 smacked of bureaucracy in its outline and would almost certainly be so in its detailed implementation.

I feel that our annual emission test procedure is rather weak, and I would single out the free acceleration test for diesel engines. It can easily be subverted by simple adjustments being made to the engine just for the test. On a goods vehicle test the examiner is not able to check for tampering with the fuel equipment. After the test. the controls can be set back to their original position or to one that can even increase performance and probably to the detriment of emissions. Unfortunately, the report did not explore the use of rolling roads which can measure the power developed, emissions and, most importantly, fuel economy under a variety of conditions. It is quite clear from the report that fossil fuel economy is vital to minimise CO2 emissions. The noble Lord, Lord Porter, pointed out that fossil fuels will be with us for a long time to come.

Looking into the near future we see the development of "full authority digital engine control systems". The noble Lord, Lord Walton of Detchant, touched on this subject. There is the possibility of tapping into the diagnostic socket and obtaining some sort of "confession" from the engine, including its state of wear, emissions and fuel consumption. Some systems will already automatically shut the engine down after a prolonged period of idling.

It is clear that for many applications we are restricted to using liquid fuels for the foreseeable future. Other fuels and technologies will simply not provide the range or payload required for long distance heavy goods vehicles. For this reason many noble Lords, including the noble Lord, Lord Dixon-Smith, have advocated low or very low sulphur fuels, not only to reduce sulphur pollution but also to allow the use of catalysts without their being poisoned by the sulphur. The difficulty is that a capital investment of at least £28 billion across the EU would be required, and this would have to be reflected in the cost of the fuel.

The issue here is the extra cost of production balanced against the environmental benefits available. The noble Lord, Lord Redesdale, made some interesting points in that connection. It will be interesting to hear the Minister's view on the adoption of low sulphur fuel. Does she think that it is worth the extra cost of production for the UK and EU plc?

The noble Lord, Lord Dixon-Smith, and others spoke about the limited production possibilities of bio-diesel. On the other hand, the noble Lord, Lord Porter, offered us hope in the form of production possibilities arising from genetic engineering. It is early days yet but there are many possibilities.

Many noble Lords have drawn attention to fuel cell technology. Provided the hydrogen is produced without resorting to fossil fuels, this technology will provide practically zero emissions.

There are limits as to what can be done with renewable sources of energy, and this subject was covered by many noble Lords.

The noble Lord, Lord Porter, made some interesting comments about production problems and opportunities for using hydrogen. The holy Grail in all of this is nuclear fusion, as identified by the noble Lords, Lord Vinson and Lord Redesdale. I do not know exactly where this project stands, but clearly that is a long way off.

The report raised the issue of fuel additives. I have little knowledge of chemistry, but just the names of some of the chemicals involved makes one think of carcinogenic and other risks. I am sure that the note of caution in paragraph 4.7 should be heeded. Can the Minister say whether it is an EU responsibility or a national responsibility to ensure that fuel additives are safe?

Having read the report and listened to your Lordships, it seems to me that CNG, or possibly LNG, offer the most promising, largely proven technology for reduction of emissions in urban areas. The previous Chancellor recognised this fact by reducing the duty on that fuel. I fully support the suggestion that the duty should be reduced to the EU minimum.

Natural gas is particularly suitable for buses and taxis, especially when they are depot based. Diesel engines are rather poor for particulate emissions, especially when long periods at low power outputs are involved.

I notice that in a Written Question yesterday the Minister's right honourable friend, Dr. Strang, stated that the review would look at the use of buses to reduce pollution, but he did not say that the review would examine ways of making the buses themselves less polluting. I am sure that that was an oversight and that the point will be included in the review. Many well informed noble Lords have pointed out the problem of old buses. There should be a way of providing strong encouragement to build most new black cabs with CNG or LPG fuel systems.

This close to the Budget we do not expect the Minister to say very much about fuel duty or VED. However, after the Prime Minister's contribution at the Denver Summit it seems likely that taxes on motoring will rise considerably in real terms in order to combat CO2 emissions. This follows on from the previous government's policy of real increases in the cost of fuel.

I agree with the noble Lord, Lord Dixon-Smith, that if the Minister desired to encourage a particular fuel or technology she could do so by offering the Chancellor a package that is neutral in terms of tax take. If the Chancellor decided to increase fuel prices, the transport industry would complain that it was unable to pass the increases on to its customers. However, the transport industry is so competitive that any increase in operating cost rarely immediately transfers to an increase in rates. One difficulty relates to cowboy operators who have no interest in pollution control or even general compliance.

That is clearly a matter for another day, but it is high on my agenda and I am sure that it will be high on the Minister's too.

We do not often have debates on technical matters, but the previous speakers have shown that when we do the result is always interesting. I look forward to hearing what the Minister has to say.

7.20 p.m.

Baroness Hayman

My Lords, I am pleased to respond on the behalf of the Government to an interesting and informative debate. The Government welcome the report of the Select Committee on Science and Technology, Towards Zero Emissions from Road Transport. It makes a valuable contribution on what is a central issue for ourselves, our children and future generations. I should like to thank the committee for its work and particularly the noble Lord, Lord Dixon-Smith, for both chairing the committee and the admirably clear way in which he introduced today's debate.

The Government have already demonstrated their commitment to putting environment concerns at the heart of the decision making process. This was reflected in the Prime Minister's decision to bring together the environment, transport and the regions in one department headed by the Deputy Prime Minister. To further co-ordinate consideration of environmental issues within government, the Deputy Prime Minister will chair a new Cabinet Committee on the environment on which Ministers from all key departments will sit. Noble Lords, like the noble Lord, Lord Vinson, who called for British leadership in this field, will have been heartened by the Prime Minister's international leadership on environmental issues at the second Earth Summit in New York.

The Government regard air which is fit to breathe as a right of every citizen. Transport is a major source of pollution, particularly in urban areas, where it is the dominant source of NOx—oxides of nitrogen and particulate emissions—for which the health risks are of most concern. That was graphically illustrated in the tale told by the noble Lord, Lord Redesdale.

I am pleased that over the next 10 years we are expecting air pollution in urban areas to improve significantly to less than half 1995 levels largely as a result of tougher standards for vehicle emissions and fuel quality. Nevertheless, these gains could be partly offset by predicted road traffic growth, with air quality set to deteriorate after 2010 or so. Moreover, meeting air quality objectives in the most polluted urban sites will undoubtedly require further action. We must recognise that air quality is as much a local issue as a national and an international one. In many cases, local measures may be the most cost-effective.

A national air quality strategy was published by the previous government in March 1997. We are committed to taking this strategy forward and to look for more rapid improvements in air quality wherever this is feasible. I can tell the noble Viscount, Lord Simon, that we will be looking at setting air quality objectives for small particulates in taking that work forward.

Climate change has perhaps been a less obvious and manifest threat than air pollution. But it is a perilous long-term risk and, in all likelihood, we are already experiencing its effects. We need to act now to reduce emissions of greenhouse gases. We have set ourselves a challenging domestic target of reducing carbon dioxide emissions to 20 per cent. below 1990 levels by 2010. This will require significant reductions from all sectors of the economy, including transport. Indeed, it was interesting that we discussed combined heat and power in your Lordships' House early this week and the contribution that that can make in limiting CO2 emissions.

Climate change is a shared problem, as the noble Lord, Lord Porter, and others pointed out. The UK has taken a lead internationally and, together with our EU partners, will continue pressing for significant reductions from other developed countries at the UN Climate Change Convention in Kyoto this December.

But it was the field of transport that the Select Committee covered in its report and which we have dealt with in today's debate to which I would like to turn. As the committee recognised, reducing emissions from road transport can not be the whole story. We need to reduce our reliance on the car and encourage a shift towards more sustainable modes of transport. I say to the noble Lord, Lord Crickhowell, that perhaps the carrot of improved public transport will prove more effective than he suggested the stick of taxation had been.

To take that forward, we are undertaking a fundamental review of transport policy and aim to produce a White Paper next spring. I am sure that the possibilities for rail freight, raised by my noble friend Lord Berkeley, those raised by the noble Viscount, Lord Chelmsford, of telematics, which is a fascinating and potentially important area, and the possibility of "clean" buses making a high contribution in terms of public transport improvements will be included in the White Paper. I am tempted to follow the noble Lord, Lord Vinson, in discussion about the roads review, in which I have a personal interest, but I should be diverted too far from the topic that we are properly covering tonight.

I should make two general remarks relating to today's debate. First, the Government have not yet formally responded to the committee's report. We welcome the opportunity to have this debate. I hope that I will be able to cover many of the issues raised, but that noble Lords will understand that we have not finalised our thinking on all the detailed aspects of the report.

Secondly, with regard to fiscal measures, I have been tempted by noble Lords to go beyond the correct behaviour for a Minister and discuss what the Chancellor might say next week. I shall not do so; we must all contain ourselves for a little while longer. However, I am able to comment on some of the fiscal measures introduced after the committee's report and included in the 1996 Budget to improve air quality. I refer, for instance, to the proposed cut in tax on ultra low sulphur diesel, for which we are awaiting the derogation, and the 25 per cent. reduction in tax on road fuel gases.

I turn to the issue of alternative fuels, which was raised by several noble Lords. Road gas fuels, and in cases electric power, can have a valuable role to play in reducing pollution, particularly in urban areas. We have been impressed by the number of studies and trials being undertaken in this field. The Government are also sponsoring its own trials of alternative fuels, including bio-diesel. The possibilities outlined by the noble Lords, Lord Porter and Lord Walton of Detchant, must be investigated properly because of the potentials that exist. We will be publishing the results later this year.

A problem for local authorities and operators is to keep track of all the information that is available. To fill this gap my department has published a booklet, now available on the Internet, providing information on trials of alternative fuels and technologies. This will be regularly updated. We will need to consider what further liaison arrangements might be useful.

As regards the cleaning up of buses and the potential of gas powered buses, for example, referred to by the noble Earl, Lord Attlee, the Government are also supporting the Energy Saving Trust's Powershift programme with funding of more than £6 million. This is establishing partnerships with local authorities, businesses, fleet operators and trade associations to develop procurement groups for purchasing gas and electric vehicles and to support complementary fuelling infrastructure.

I am happy to be able to tell the noble Lord, Lord Walton, that the Government Car Distribution Agency has recently introduced several gas-fuelled cars and an electric car. It was possibly that car which the noble Lord, Lord Redesdale, encountered. Perhaps wearing another hat, I should ensure that it is fitted with a bicycle bell so that it warns him in future when it is coming. We are also exploring the scope for Ministers to make greater use of alternative fuelled cars.

Many noble Lords, including the noble Lord, Lord Walton, asked about the area of enforcement of emission standards in the existing fleet. That is crucial to improving air quality. Almost all vehicles are now subject to an emissions inspection at their annual roadworthiness test. In addition, enforcement checks carried out by the department's vehicle inspectorate have helped to ensure that commercial vehicles and buses do not emit excessive smoke levels. Those checks have been expanded over the past few years.

The Government are also intending to introduce regulations which give local authorities the power to issue fixed penalty notices for vehicles failing road side emission checks. We are aiming to consult on draft regulations during the summer months, with a view to setting up the scheme on a 12-month trial basis by the end of the year.

Emphasis was rightly placed in the Select Committee's report and in the debate tonight on longer term technological developments. The Government are keen to see our industry continue to build a strong, competitive position in new markets for environmental technology. That can achieve both economic and environmental benefits for this country. It is important that we share some of the developments that are made in that regard throughout the world, given the international nature of the problem.

We agree that cost and efficiency are critical issues for the development of commercially viable fuel cell systems. The Government, in collaboration with industry, have been supporting research on fuel cell technology through the DTI's advanced fuel cell programme, part of the new and renewable energy programme. My colleague at the DTI, John Battle, recently announced a wide ranging review of policy in this area. Among other things, it will need to consider fuel cell technology. I am pleased that the review will now be able to draw upon your Lordships' deliberations this afternoon as well as the committee's conclusions, and I will ensure that the debate is drawn to my honourable friend's attention.

Perhaps I may turn now to vehicle emission and fuel standards and the auto-oils issue. A number of the recommendations and points today cover emission standards for new vehicles and fuel quality. These are being considered under the European Commission's auto-oils programme. We have sought standards that give us a high degree of environmental protection, without imposing excessive or unjustified costs on our vehicle or oil industries. I am pleased to be able to relay to your Lordships a successful outcome to the most recent negotiations.

As noble Lords have said today, it is important not to discount the ongoing developments in conventional petrol and diesel technology. In 1993 emission standards were introduced which resulted in catalytic converters being fitted to all new petrol cars. This had a major impact in reducing the main pollutants—carbon monoxide, hydrocarbons and Nox—typically by over 75 per cent. The 1993 standards have already been tightened in a second phase during 1996–1997. A third and fourth phase is planned for 2000 and 2005 under the auto-oils programme.

The first part of this programme, dealing with emission standards for new cars and fuel quality, was given a first reading at last week's Environment Council. By unanimous decision, the Commission's proposals were amended in a number of key areas, especially on the sulphur level in petrol and diesel, an area highlighted this evening by many noble Lords but in particular by the noble Lord, Lord Redesdale, and the noble Earl, Lord Selborne.

Noble Lords will be well aware that I am no technical expert, and I can reassure the House that I have no intention of attempting a chemistry lecture particularly in the distinguished company of the noble Lord, Lord Porter. However, it is important for all of us to recognise that sulphur does have an adverse effect on catalyst efficiency. I can say to the noble Lord, Lord Walton, that the reductions agreed in Luxembourg will bring an immediate benefit by reducing all the main pollutants from existing vehicles as well as helping manufacturers to meet tighter standards for new vehicles. We very much supported that amendment to the Commission's proposals. It provides a signal to the oil industry on the need to reduce sulphur in both petrol and diesel from today's level of 500 parts per million to not more than 50 parts per million in 2005.

The noble Earl, Lord Attlee, asked whether the costs of low sulphur fuel were justified by the benefits. It is important to note that as well as the immediate effects that I have described, demanding standards on sulphur will give the motor industry the confidence that the right fuel quality will be available. That is what is required for the new technology being developed to meet the indicative 2005 vehicle standards. The two issues are inter-related and sulphur levels in fuel are absolutely central.

The standards agreed in Luxembourg last week will improve emissions from new cars by 30 per cent. to 40 per cent. from 2000, with a further 50 per cent. improvement from 2005, if the 2005 standards come into force. I say "if' because the petrol and diesel technology does not yet exist that can meet these standards, so the 2005 standards are subject to confirmation following a further auto-oil review in 1999.

Hydrocarbon and Nox and diesel particulate emissions will have been cut by over 80 per cent. since the introduction of the catalyst standards in 1993. This would bring us major air quality benefits, and petrol and diesel vehicles will be able to compete effectively with other near-zero emissions technology.

The Committee recommended that the EU vehicle emissions testing cycle be amended to more accurately reflect average European ambient temperatures. That point was raised by the noble Earl, Lord Attlee, and the noble Lord, Lord Walton. Noble Lords will be pleased to hear that this view was endorsed unanimously at last week's Environment Council. As a result, from 2002, new cars will be required to undergo an extra test carried out at minus seven degrees Celsius. It should ensure that catalysts are much more effective at limiting emissions especially on short journeys. I think this is a very positive step forward.

To conclude, I should like to repeat my welcome call for the report and the extremely valuable contributions by noble Lords today. Reducing the emissions from road transport—both in terms of pollution and carbon dioxide emissions—is a challenging and crucial task. New vehicle emission standards and new technology offer us the prospect of air that is clean and safe to breathe and sustainable road transport as well. We need to take full account of the costs of those measures; but equally it is clear that we cannot afford not to act.

7.37 p.m.

Lord Dixon-Smith

My Lords, it would be very tempting to respond in detail to this debate but I do not believe that Members of the House would thank me for doing so. It is interesting that in many ways the debate has reflected the discussions which we held in the sub-committee as we were attempting to draft our report.

The report was of course tightly focused and we thought that it had to be that, otherwise we might have produced rather diffuse results instead of something which I hope, in the light of this debate, will be seen as positive and helpful.

I am most grateful to all who have contributed to the debate, in particular members of the committee but interestingly, of course, the non-members of the committee who have widened our perspective. Indeed, for those of us who are interested in the subject, we should be wise to pin the Hansard record of the debate to our copy of the report. I am particularly grateful to the noble Baroness, Lady Hayman, for responding on behalf of the Government. As the Minister said, we have not had a formal response, but without the benefit of that formal response she has gone as far as she possibly can in answering many of the points which the committee raised and she has defined those areas which I am well aware—as I am certain everybody else is aware—cannot be answered at this point. It has been a most successful debate. I commend the Motion to the House.

On Question, Motion agreed to.

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