§ Mr. Fabian Hamilton (Leeds, North-East)I am grateful for the opportunity to have this debate. The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Leeds, West (Mr. Battle), coined a phrase some time ago: "joined-up thinking". This debate takes place at an opportune time. First, it is on the topic of the day—transport. Secondly, it is about joined-up thinking and its relationship to the environment.
The Government's transport White Paper, "A New Deal for Transport", which was published in July 1998, states:
We will continue to encourage the use of more environentally friendly fuels".I should declare an interest at this point. Six weeks ago, I bought a dual-fuel vehicle, which runs on liquefied petroleum gas and petrol. I have been enjoying its benefits ever since, and I shall expand on that later.The transport issue presents us with a number of problems: how to get around safely and quickly; how to travel longer distances in less time; how to ensure that we do not further pollute our towns and cities, causing damage to people and buildings; and how to reduce carbon dioxide emissions and the greenhouse effect on the whole world. I do not pretend to have all the solutions. However, I shall try to offer some helpful suggestions on how to reach those much-desired targets.
A whole host of alternative vehicle fuels, which offer better economy and less environmental impact than petrol, now exist. Petrol is still the most common vehicle fuel, and, despite the removal of lead, it continues to emit many toxic and undesirable gases. However, the advent of the catalytic converter, and its compulsory addition to all cars manufactured after 1993, has had a dramatic effect on the reduction in harmful gases from petrol-driven cars. Ian McAllister, the chairman and chief executive of Ford UK, is fond of saying that the emissions from 64 new Ford Kas produce the same amount of exhaust gas pollutants as one 1977 model Ford Fiesta. An older bus carrying 30 passengers—or customers, as they seem to be called nowadays—produces more pollution than would be produced if those 30 people were all to drive new small petrol-engine cars. The congestion, of course, would be considerably worse. According to Mr. McAllister, it is almost impossible to commit suicide with a modern petrol engine car—it does not produce enough carbon monoxide.
Yesterday, my right hon. Friend the Deputy Prime Minister launched the Government's transport strategy for the next 10 years. He spoke about investment of £on over that period, and said that he hoped that the entire bus fleet would be replaced in that time. I was amused to hear commentators on the radio deriding him for that—they said that the buses would be replaced within 10 years anyway. Clearly, BBC presenters never travel on buses—if they did, they would know that some of our buses are more than 30 years old, and that their ancient diesel engines cause heavy pollution.
Liquefied petroleum gas—LPG—which is also known as propane, is not new. The gas is a by-product of the oil refining process, and is often burned off in the 40WH flares that come out of oil refineries. More than 4 million vehicles on the world's roads run on the fuel, which produces far lower exhaust pollutants. More than 1 million of those cars are in Italy, where the tax regime has been even more favourable to the gas. In Holland, which is a much smaller country than the UK, there are 400,000 LPG cars on the roads. Fewer than 8,000 such vehicles are driven on Britain's roads.
LPG is a good alternative fuel, although it is by no means the only one available. It reduces the production of nitrous oxide by up to 85 per cent., carbon monoxide by 98 per cent. and hydrocarbons by 81 per cent. Carbon dioxide is also significantly reduced when compared with petrol. Benzene and butadiene are dangerous human carcinogens. LPG produces one thirteenth of the benzene and half the butadiene emissions of petrol.
Having realised the environmental benefits of LPG, my right hon. Friend the Chancellor reduced excise duty on the fuel in his last Budget. The typical forecourt cost for LPG is 35p per litre, compared with more than 75p for petrol—it is probably much more in London. It is no wonder that I am delighted with my new Vauxhall Vectra. As my right hon. Friend the Chancellor will be aware, however, nobody is ever satisfied on tax. I appeal to him to reduce further the duty on the fuel from the current rate of 15p per litre to the European Union minimum of 8.3p. That would further stimulate the market for a gas that is readily available now and that most petrol engines can be converted to accommodate.
Although I described LPG as readily available, one of the most frequently asked questions about my dual-fuel car is, "But where can you fill it up?" I am lucky to come from Leeds, which is a city overflowing with LPG filling stations—four, to be precise. That is far better than London, although there is a convenient garage nearby at Victoria coach station. Many Members of Parliament will remember the early days of the fax machine, about 15 years ago, when people asked, "Why should anyone buy a fax machine?" There seemed little point in doing so if there was no one to whom one could send a fax, as—although it seems incredible now—few people possessed a machine.
The author Joseph Heller, who died on Sunday, will be for ever remembered as the author of "Catch-22". I am not sure whether he would have called LPG a catch-22 problem, but one of the barriers to wholesale conversion to LPG is the lack of infrastructure. There are only 200 filling stations nationwide, although many more are planned by Calor Autogas, Shell and BP over the next 12 months. Among the biggest problems facing the development of more LPG stations are the objections of local planning authorities. Petrol storage tanks are kept underground, but LPG storage tanks must be kept on the surface, and local planning authorities have objected on safety or aesthetic grounds.
On 25 September this year, the Financial Times reported that Dean White, clean fuels manager for BP Amoco, said:
The government on the one hand is encouraging use of cleaner fuel, but local authorities are saying 'not in our backyard'.The report continued:BP Amoco has hoped to install LPG facilities at 70 filling stations this year. So far it has received planning consent for just three. Shell has cut its target for LPG sites from 100 to about 60 by 41WH the year end …BP has set a target of providing LPG at 300 filling stations within five years. Officials admitted it was unlikely to achieve that target. Shell, similarly, said it was taking longer than expected to win planning consent. It had hoped to launch 200 sites by 2001.It would greatly assist the planned target of 500 clean refuelling points by 2001, which is the aim of Calor, Shell and BP, if the Department of the Environment, Transport and the Regions would issue a circular to all local planning authorities encouraging them to approve applications within local framework plans. That would be a step towards joined-up government.My right hon. Friend the Chancellor generously funds the Energy Saving Trust and its Powershift programme, which aims to assist in conversion of vehicles to cleaner fuels. He recently announced three-year funding for the programme, but budgets are already under pressure because of the heavy demand for and massive increase in interest in sustainable clean fuels —not only LPG. I shall add to that burden by telling the House that grants of up to 75 per cent. may be paid towards the conversion of petrol-engine cars by approved conversion companies. That normally involves the removal of the spare wheel and the use of that space to accommodate the new fuel tank, which is a small price to pay for the cleanliness of the fuel.
As most conversions cost between £1,500 and £1,800, the cost borne by the individual—assuming a grant from the Energy Saving Trust—would be recouped in a few months. For companies operating fleets, the cost savings alone would justify the relatively small investment, irrespective of the environmental benefits. Ford, Vauxhall and Peugeot currently offer new cars already converted by the manufacturer.
So far, I have talked about LPG, which is also known as propane, but there are other options. Larger vehicles—buses, refuse wagons and lorries—can run on compressed natural gas, which further reduces polluting gas emissions. The one disadvantage is the size and weight of the fuel tank. CNG, which requires a compression of eight atmospheres, must be stored in very heavy fuel tanks that are impractical for cars, but a number of local authorities have converted to CNG and are already feeling the benefits. Perhaps local authority electorates should press councils to make those conversions, especially in heavily built-up areas such as London and Leeds. I invite the Minister for Local Government and the Regions to make provision for this very good bit of joined-up government.
Last January, I chaired a conference at the Royal Armouries in Leeds, on behalf of the Energy Saving Trust, that sought to persuade public bodies to convert to cleaner fuels. At the conference, I had the opportunity to drive an electric car—the Peugeot 105. A fleet of Peugeot 105s has recently been purchased by Birmingham city council. I thought that that car, which produces no emissions, was the answer to the problems. Like most hon. Members, I suspect, I imagined that driving an electric car would be just like driving a milk float, but I was pleasantly surprised. Although it has no gears, it has good acceleration and is totally silent. I wondered whether it was the ideal solution, but there are problems.
First, on a single charge, its range is only about 40 miles. Secondly, in producing the electricity that charges the vehicle's batteries, pollution is created in other places. Thirdly, the batteries use heavy metals that are 42WH not very environmentally friendly. However, if we were to use electricity generated by wind farms, or sustainable sources such as hydro-electricity, perhaps such vehicles would be cleaner.
The car is also expensive, but the French—inevitably, it is the French—have established a network of recharging points that recharge much more quickly than conventional ones. The electric car has a little further to go before it is a viable long-distance vehicle, but it has a role to play in inner-city areas, where range is not an issue. I aplaud Birmingham for buying a fleet of such cars, and I hope that Leeds quickly follows suit.
So far, I have not made much mention of diesel, which was the great hope for emission reduction. There are many diesel cars and goods vehicles on our roads, and huge advances have been made in diesel design, emissions and power. Diesel engines are far more economical, and the latest common-rail diesel engines are often indistinguishable from petrol engines. One can even buy a diesel BMW. However, cyclists know that diesel-engine buses produce the filthiest exhaust emissions. Although they help to reduce carbon dioxide, such vehicles produce particulates of unburnt fuel, which are the real killers. High levels of PM10s, which are the larger particulates, contribute to congestive heart failure, ischaemic heart disease, cerebrovascular problems and asthmatic attacks. It is estimated that PM 10s advance 8,100 deaths a year, so it is clear that a reduction in older, dirty diesels can only benefit the people of this country, as well as health service costs. There are other, smaller particulates—PM25s—that are even more dangerous because they can be absorbed into the bloodstream more directly. A reduction in those particulates would also greatly benefit public health.
I have not had time to mention some of the other available fuels. The larger motor manufacturers are developing hydrogen fuel cell technology. Ford estimates that, within five years, it will make a fuel cell car available to the public. Fuel cell cars use biomass-produced fuels such as methanol, which is converted into hydrogen and burned in an internal combustion engine, and produce exhaust fumes that are purely steam or water vapour. I understand that Brazil uses a great deal of methanol. Such technologies are being encouraged and developed.
I have hardly had time to touch on the issue of capital allowances. I know that the debate will not be answered by a Treasury Minister, and I apologise for raising taxation issues, but I want to make one point. The conversion to LPG of vehicles, particularly fleet vehicles and large commercial vehicles, would be greatly assisted not only by developing the vital infrastructure but by introducing 100 per cent. capital write-down for such conversion. When Treasury Ministers read this debate in Hansard, I hope that they will consider advancing alternative fuels in that way.
I have raised a number of issues this afternoon. I hope that they will contribute to the debate on cleaner and better fuels to reduce pollution, improve air quality in inner cities and reduce carbon dioxide and greenhouse gases, in line with our obligations under the Kyoto agreements. I also hope that, as they become more common, those alternative fuels will help to improve public health and reduce NHS costs, as well as reduce the damage that sulphur dioxide emissions cause to our buildings. I believe that the issues I have raised are important. Conversion to LPG and other such fuels will 43WH not only lead to cost savings for motorists, but benefit the environment and public health, about which I care passionately.
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill)I congratulate my hon. Friend the Member for Leeds, North-East (Mr. Hamilton) on securing this debate, and on giving notice of some of the key issues that he has raised. Alternative fuels is a subject of extensive interest, and the related issues deserve to be widely aired. We are now aware that, as an owner of an LPG bi-fuel vehicle, my hon. Friend has a particular interest in the subject. He is not alone: the Government car service converts its fleet to alternative fuels as vehicles are replaced, and my own ministerial car has been converted to gas.
Now, more than ever before, we need a consensus on transport. We do not want to force people out of their cars or force hauliers out of business, but every sensible person who participates in the transport debate recognises that we cannot go on as we are. Congestion is costing the country billions of pounds, climate change is the greatest threat that the world faces today, and we are increasingly aware of the impact of poor air quality on health.
Instead of wringing our hands over those problems, we must start solving them. The integrated transport White Paper, which was published last year, and the recently published Transport Bill are important steps towards providing solutions, but we cannot afford to be complacent. Yesterday, my right hon. Friend the Deputy Prime Minister set out the way forward for transport over the next 10 years. As he explained, we need an efficient transport system to support a prosperous economy, counter social exclusion and maintain our quality of life. We need greater investment from the private sector and the public sector. Part of the answer is to improve public transport, but we recognise that the car will remain an important means of mobility for millions of people, so we must ensure that road vehicles are cleaner, quieter and more fuel-efficient.
Here, there is good news. As a result of tighter vehicle emission and fuel quality standards, new road vehicles are already cleaner. As manufacturers gear up to meet the European Union voluntary agreements on new car fuel efficiency, vehicles will quickly become more fuel-efficient. In some areas, that will not be enough. Everyone recognises the scale of the problem posed by climate change, and noise is an issue of increasing concern. Although our health-based air quality standards will be met across the majority of the country by the deadlines set out in our air quality strategy, there will be pollution hot-spots, especially for nitrogen dioxide and particulates. Alternative fuels provide one way of addressing those problems.
Gas fuels can offer significant air quality benefits. Compared with diesel engines, liquefied petroleum gas and compressed natural gas can offer substantial benefits with regard to particulates and nitrogen oxides, which are the air pollutants of greatest concern in road transport terms. Road fuel gases produce less visible smoke and odour than diesel, and such vehicles can be substantially quieter than their diesel counterparts. That 44WH can benefit night deliveries of goods, for example. If one takes into account life cycle, rather than tail-pipe emissions alone, CO2 emissions from those fuels will be lower than from petrol.
Battery-electric vehicles, which produce no exhaust pipe emissions, are even better than gas fuel vehicles in that regard. However, we must remember that, essentially, those emissions will be transferred to power stations. None the less, on a life-cycle basis, battery electrics may benefit the climate and improve local air quality. Hybrid electric vehicles can be significantly more fuel-efficient and quieter than their conventionally fuelled counterparts. Potentially, fuel cells offer virtually non-existent tail-pipe emissions and life cycle benefits in respect of CO2.
I should like to explain our approach to deciding between different policy measures. Solutions have to contain three elements. They have to be practical, timely and cost-effective. It is the duty of every responsible Government to ensure that taxpayers' money is carefully spent, and this area is no exception.
The Government fully support alternative fuels. We have introduced fiscal incentives for gas fuels, so that the difference in duty between liquefied petroleum gas—LPG—and compressed natural gas and diesel is the widest in Europe. This year we increased the funding to the Powershift programme, which provides grants to help fleet operators to offset the additional capital cost of alternatively fuelled vehicles, by 40 per cent. compared with last year. In the last Budget we doubled the vehicle excise duty rate for the cleanest buses and lorries to a maximum of £1,000.
Projects and initiatives at a local level are already starting to make a difference. The ALTER project is designed to produce concerted action by cities across Europe to give preferential access to certain areas to vehicles with zero or low emissions. Some local authorities are discussing the possibility of using low emission zones to reduce vehicle-related pollution in towns and cities. It is likely that gas-powered vehicles will fall into the categories of vehicles allowed to enter such zones, because they tend to be significantly cleaner than their conventionally fuelled counterparts.
Local authorities and other public sector fleets are at the forefront of pushing forward the market for alternative fuels. The London borough of Southwark in London, for example, is involved in the ZEUS—zero and low emission vehicles in urban society—project. That is a consortium of local authorities in London, Coventry and other European cities examining the use of cleaner fuels and technologies to improve air quality and promote energy efficiency. It has negotiated competitive prices for a range of electric vehicles. The City of Westminster council has just taken delivery of the first commercial fuel cell vehicle, for which the Powershift programme, sponsored by my Department, provided a partial grant.
Police forces have also shown their keenness to use alternative fuels. Humberside police in Yorkshire, for example, were awarded Powershift funding for more than 100 LPG vehicles at the end of last year. I am delighted to report that Leeds city council, which is certainly in Yorkshire, has been offered a Powershift grant towards the purchase of two electric vans.
45WH However, the debate should not be limited to gas fuels. Battery-electric vehicles have a role to play in niche markets. More exciting are the alternative fuels and technologies of the future. Hybrid electric vehicles use two power sources: a conventional engine and an electric motor. They are, therefore, substantially more fuel-efficient than conventional technology. Hybrids are already on sale in some parts of the world, and we can expect to see them here in the next few months.
Fuel cell vehicles offering high efficiency and low emissions are slightly further into the future, but will be on the roads in the next few years. It is no exaggeration to say that the way in which vehicles are powered will have changed more in the last 10 years of the 20th century and the first decade of the 21st, than in the 90 years before that. Who would have thought, looking at the first steam-powered vehicles of the 1890s, that 100 years later we would be contemplating the sleek, clean, quiet fuel cell vehicles of the near future?
Those dramatic advances are being supported by the Government. Through the fuel cell programme, we are supporting research and development on advanced fuel cells to the tune of £2 million, with that amount being matched by industry. So far, we have supported 109 projects with a total value of about £56 million. We expect the next phase of the project to support around 15 proposals with a Government contribution of around £3 million.
The Engineering and Physical Sciences Research Council has recently approved a number of fuel cell projects under its new and renewable energy programme. The Foresight vehicle programme, aiming at the 15 to 20-year horizon, is a further example of Government-sponsored research. It is an umbrella programme of industry-led automotive research that aims to co-ordinate Government funding across Whitehall, focusing on advanced technologies for the future. The programme has proved a great success and includes projects investigating advanced propulsion systems and innovative fuel systems. Hybrid and electric vehicle technologies are also included. The Government have made more than £12 million available for these and other Foresight projects. The portfolio continues to increase as the programme moves forward.
My hon. Friend the Member for Leeds, North-East has suggested that vehicle excise duty should be based on a wider range of environmental impacts. Taxation is, of course, a matter for the Chancellor, who has said that he will announce full details on graduated VED at the next Budget. Meanwhile, I am sure that he will keenly read the observations made by my hon. Friend. He has already said that there will be four VED bands, based on CO2 emissions, with the potential to reward less polluting fuels. The system developed by the Environment Agency is interesting, and my officials have had discussions about that system.
It is important that the Government take into account all the environmental impacts of particular fuels. However, we are not yet at the stage where we can adopt a fully comprehensive system. Many uncertainties remain about the exact life-cycle emissions of different 46WH fuels and technologies. That is one reason why my Department, through the cleaner vehicles task force, has commissioned research to assess how much information is already available about the life-cycle emissions of different fuels and vehicles.
I said earlier that the solutions to the problems of poor air quality, noisy streets and the threat of climate change must be practical, timely and cost-effective. We cannot afford simply to assume that alternative fuels are the way forward. We have, therefore, asked the cleaner vehicles task force to take a closer look at alternative fuels. We asked the alternative fuels sub-group of the task force to do three things: to consider the merits and longer-term potential of alternative fuels and technologies; to examine the barriers to introducing alternative fuels to the marketplace; and to consider the mechanisms for removing those barriers and developing an improved infrastructure to make those fuels more widely available. We have stressed that this work must be set within the context of practicability, timeliness and cost-effectiveness.
The group is near to delivering a final report, which we expect to publish early next year. Cost-effectiveness analysis has been a key parameter to its work. When we receive the task force's recommendations, we will use them further to refine Government policy on alternative fuels. I do not anticipate a major change to our current belief that, from an environmental perspective, the best use of gas fuels is in urban areas to replace vehicles that would otherwise use diesel. We hope to ensure that those fleets are given every opportunity to switch from diesel. Hybrid electric and fuel cell technologies are likely to become more widely applicable, especially as one of their major benefits will be in the area of CO2 emissions, which are a global rather than a local issue.
Another issue raised by my hon. Friend is that of problems experienced by some fuel suppliers in obtaining planning permission for new LPG refuelling sites. My Department is aware of that issue. It is important that local authorities take their planning and health and safety responsibilities seriously, but we must bear in mind the contribution that gas fuels can make to meeting our air quality targets. I can, therefore, promise that we will address the issue of planning guidelines for LPG refuelling points in the final version of PPG13—the Department's planning policy guidance on transport issues to be published next year.
I end by re-emphasising our commitment to alternative fuels. We cannot continue to use energy in the way that we have, or to ask those who are suffering from respiratory problems to suffer further as a result of traffic-related pollution. We firmly believe that alternative fuels and technologies are part of the answer in creating a sustainable transport system. The role of the different fuels and technologies varies—some are best suited to niche applications, others are more widely applicable. However, we have no doubt that they must be part of our strategy for delivering a transport system suitable for the next century.
§ Question put and agreed to.
§ Adjourned accordingly at one minute to One o'clock.