Agenda item

(1)          Farmers in the font line of the cc as organisation  country land and business organisation etc are convinced by scientific evidence have to adapt to adaptations driven by government policy.

(1)         Mr White and Mr Scurlock were welcomed by the Chairman and Members to the meeting.

 

(2)        Mr White gave a brief introduction advising that there were 5000 commercial farmers and growers paying a voluntary subscribing to the NFU an apolitical organisation.

 

(3)        How much production is coming of the farms for renewable energy, from which crops,  what sort of potential is there to enhance that production and what sort of incentives were there to ensure that happens?

(4)        Mr Scurlock advised that the current position in the EU directives says that by 2020 across the Union renewable energy in all its forms, electricity generation, supply of heat and transport fuels too had to become 20% across the whole of the EU.  The UK had a target of 15% set which would be a big stretch over the next ten years as the UK was close to the bottom of the league table with 2-2½%, mostly in electricity very little renewable heat and a growth in transport renewable fuels.   The NFU farmers were aware of the business opportunities of renewable energies but most farmers were still heavily dependent on fossil fuels.

 

(5)        The level of awareness was growing.  There were a number of initiatives taking place. The NFU and the CLA were involved with Farming Futures website farmingfutures.org.uk; which was a DEFRA funded information service designed to raise awareness about climate change, problems and solutions across many sectors, targeted at farmers.  It was successful.  It highlights that there was a growing problem which was reflected in farmer’s ordinary experience in eg input costs, concerns with energy bills.

 

(6)        To make this happen, some of the government policies were falling into place partly driven to the need to respond to the EU renewable directive.  The Renewable Electricity Obligation was one of the earliest measures in 2001 that took over from the non fossil fuel obligation.  There was then the Renewable Transport Fuel Obligation that required a rising proportion of bio fuels or other renewable transport services in the general public transport services mix mostly delivered by low blends of bio fuels.  That was providing a useful new business opportunity for farmers and growers.  Farmers had always grown grains whether wheat or oilseed rape for multiple purposes the best quality would go into making bread and biscuits, the middle quality would go for animal feed and the lower end of product quality would be used for producing industrial starch.  The transport fuels needed and investment was being put in now into the market was large wheat to ethanol plants, 3 large plants, one already commissioned and one to come on line in North Humberside and a third one also in the North East region. 

 

 

(7)        Mr White put this in the Kent context.  He had asked 10 NFU offices across Kent if there were any anaerobic digestion projects on the farms; there was not a single response.  In contrast in Chichester there were 2 large vegetable growers supplying the multiples, the driver for them was the unique selling point they could offer anaerobic digestion to get rid of their waste, it was environmentally friendly, which the supermarkets wanted in their portfolio. In Kent there were biomass boilers, Nick Sanford SEEDA champion promoting biomass to farmers; it was very slow to take off.  There was another SEEDA champion for Bio fuels, Andrew Martin an arable farmer on the Marsh he purchased an oil crush for oil seed rape but his project did not get further than the pilot, he was now selling the oil as cooking oil.  There were farmers putting there toe in the water but nothing had taken off.

 

(8)        How big is that potential?

(9)        Mr Scurlock advised that the potential was huge.  The UK had the best wind resources in Europe.  There was also a very substantial bio energy resource, but this was not as easy to comprehend because it was in many different technologies and resources all of which required their own particular market drivers to make them happen but overall wind and bio energy were the UK’s two biggest followed by solar in particular solar voltaic and small scale hydro. There was also ground source heating or heat pumps with some form of enhanced heat store as digging trenches in the ground was something that farmers could do and had the necessary land.

 

(10)   What would make the farming community regard this as mainstream and not peripheral?

(11)   Mr White felt this was achieved through removing barriers and introducing incentives.  Mr White said that in his written submission to the Committee he made reference to force or targeting through the planning process.  He felt that when a developer was planning a housing development a percentage of those through the local authority’s plans should have renewable heat.  Mr White questioned how else could you get the market going.  The farmer need to see that there was a market for the woodchip that he had in his dormant woodland.  There were other incentives that came out on 1 April.

 

(12)   Mr Scurlock mentioned other incentives that included; renewables Electricity Obligation, Renewable Transport Obligation, which was suppose to drive in innovation in bio fuels the most recent budgetary revisions was to get rid of a duty derogation a duty differential between bio fuels and regular fossil liquid fuels has slowed down the opportunity at a small scale. 

 

(13)   Mr Scurlock explained that his Audi A6 had been modified to run on pure vegetable oil, which was provided by three farmers in North Wales. This was technically doable but needed to be market driven in order to get the majority of the NFU members interested rather than just being the early adopters and innovators.  Many people in the mass market looked at the incentives that were available such as the feed in tariffs, [a small scale electricity revenue based reward mechanism] which was going to cause parts of the market to take off.  Mr Scurlock advised that from 2011 there were plans, which should incentivise, from April, the supply of renewable heat, there would be some revenue based reward per kilo watt hour of renewable heat.  This would be a great opportunity for farmers to diversify to heat services for new houses in rural areas for farm based business units.  He advised that some farmers were still held back because they looked at it and felt that there would be problems with the distribution network operators and the electricity companies at local level. Farmers were saying that the network operators would not offer them a connection at a reasonable price and the process for getting that connection had huge up front costs rather than a friendly visit from a representative from the electricity company who was keen to come to the farm and talk about putting in new renewable electricity generation. 

 

(14)   Mr Scurlock considered whether the Environment Agency and Environment Regulation had a great fear in deploying aerobic digestion and were very bureaucratic giving; exemptions, standard permits, bespoke permits that were all very complicated for which he felt would need professional advisors to help you through.  There was also a fear of planning committees.  Mr Scurlock felt that planning committees had not been well briefed and there were concerns with previously unknown technology which hold up planning applications and then made projects uneconomic.

 

(15)   Did this fall outside the normal planning issues for agriculture?

(16)   Mr White said that if there were farmers in the room today they would say that there were still permitted development rights but they were far more limited than you were suggesting.

 

(17)   Mr Hibberd agreed saying that the planning committees were struggling at present, the anaerobic digestion (AD) were generating public criticism, they too blamed the planning authorities but the planning authorities were keen to get a solution to this but had to take the technical advice that they were given and at the moment most of the technical advice was coming from the Department of Environment and there were problems with finding an alternative credible source of advice. 

 

(18)   Mr White said that DEFRA’s anaerobic digestive implementation plan was very positive about the prospects for the industry and how it could be deployed in various forms; whether you were looking at the role of the water industry with their sewage sludge digesters or the opportunities for farmers to do purely farm feed stocks or the opportunity for farmers and waste management people to get together and do mixed feed stocks.

 

(19)   Mr Hibberd advised that one of the conclusions of the Climate Select Committee was that agriculture was in a very favourable position in regards to climate change as it would give farmers the opportunity to produce better produce, with a shorter growing season and generally a better result as lot of this was through the enthusiasm by the NFU when they met the Committee.

 

 

 

(20)   What contribution could you make to the overall problem; bio fuels was one example but what could you make from animal waste generally it was put back into the ground?

(21)   Mr Scurlock advised that the idea of farm based AD was that you could take the manure and slurry through the digester and still use them afterwards because none of the nutrients were lost and the digestate, the by product contained all of the nutrients but since it had been through a process you know a lot more about those nutrients and could be applied to land in a more scientific manner. It was appositive way of looking at AD as a form of conditioning of using manure and slurry but you would not be able to make these part of an answer that was economically viable unless you put something in besides manure and slurry.

 

(22)   The usage of diesel oil in the farming community was considerable what was the scope in reducing that bearing in mind that it was mostly used to drive rotating machinery and I can not think of anything else that could fuel these, do you need diesel indefinitely or could you find another fuel?

(23)   Mr Scurlock explained that going back 100 years most European countries anything up to 1 in 4 arable fields were growing horse fodder which was used to provide transport energy for running the rest of the farm.  There was nothing new about growing your own transport energy on the farm.  With modern technology where you do not have to feed the transport when you were not working the ratio had improve where you can run a farm with 1 in 10 fields ie 100 hectare farm = 10k litres of vegetable oil from about 9 hectares 9% of your total field area.  There were relatively few people practicing this now partly due to economics and some unfamiliarity with the technology but the same conversion that he had on his Audi A6 car was available for agricultural vehicles already.  They would run on biodiesel a form of upgrade vegetable oil or they could be modified to run on pure vegetable oil that could be produced on the farm. The NFU were keen on the drop in biodiesel alternatives were the option as you would not have to convert the whole vehicle and were relatively simple low cost modifications that could be made to existing equipment.

 

(24)   Who would pay for the processing plant?

(25)   Mr Scurlock said that there were farmers that were investing in their own rape seed crushing plant. Some of that was sold as a food grade product but the volume market if they wanted to crush a lot would be for energy purposes.  The farmers may grow some high taste oil seed rape varieties to make food products and then grow some high production maximum oil yield varieties to service the fuel market.

 

 

 

 

 

 

 

(26)   What is going to be the driver for this?  Would the NFU consider funding a mobile plant that travelled to the farms and converted the waste so that the farmer could use it rather than having to invest in the machinery?

(27)   Mr White felt that cost was always the issue and it would take a barrel of oil to reach the ‘magic threshold’ and it became economically viable for farmers to look at alternative fuel sources. He said that he was not for artificially adjusting things to force farmers down that route.  If the multiples were to say to their suppliers ‘we want to be the most green operator and we  were going to do this through the following means; all tractors are to use pure processed oil, these were the costs for their 12k producers and they get 2pence per litre extra in the milk price to do this’.  Mr White considered that this was how he would like it to be carried out with a price incentive so that it is recognised that there was value to doing this.

 

(28)   Mr White explained that the net cost of crushing rapeseed oil was 55 pence per litre the net price for red diesel is 45-55 pence per litre the price was creeping back up.  The farmer would have to account for the labour cost of operating oil seed crushing machine and also paying back the capital invested in the machine.  Mobile processing rigs were a possibility, set up through a co op with funding through RDPE which was a major funding stream. Taxation was another issue HMRC were not sympathetic and was not interested, which was essentially due to the treasury.  It was going to get rid of the 20 pence derogation on bio fuels compared with fossil derived liquid fuels.  The government said that its policy for increasing the bio fuels in the UK economy was to fulfil the transport renewable fuels obligation.  Mr White said that this was not working at present because following the Gallagher Review the government decision makers slowed down the accelerating requirement laced upon liquid transport fuel supplied by the renewable transport fuels obligation and so there was over fulfilment of the RTFO at present and the tradable certificate were virtually worthless, whereas the renewable electricity obligation had headroom the industry was struggling to catch up with the government target but there was always room for the government to buy and trade certificates within that headroom and the certificates had substantial value to the renewable transport fuels obligation was not the case at the present time and unless the government sees that it would have to readjust the RTFO to see those certificates having value. Mr White felt that all of the small bio fuel processors and producers were being squeezed at present.

 

(29)   There were huge numbers of the public in Kent that would like the opportunity to run their cars on vegetable oil but it seemed that we needed to get the distributors on board who is selling it?

(30)   Mr Scurlock explained that his can would also run on ordinary diesel and    vegetable oil.  The suppliers of the vegetable oil were often linked to those that offered the conversion technology for vehicles.  He advised that his conversion was by Elsbett a German run manufacturer that had developed a lot of technology in the use of vegetable oil and diesels.  There were other conversion manufacturers’ one in Wolverhampton that dealt in diesel veg.  The people trying to build an industry around this mainly Elsbett had a distributer in this region, in Tonbridge Dominic Goodwin of Bio motors Mr Goodwin had done a lot of lobbying with HMRC over taxation or the creation of derogations of very small producers of bio fuels.  A Lot of the vehicle that people were converting were out of warranty but Elsbett offered a warranty on the conversion work done, they would pay for repairs that could be attributed to the conversion not working properly.  He said that he could buy the fuel in 200 litre oil drums which were delivered to his house.  He was also sharing a fuel supply, 1000 litre IVC which came directly from Theo Jones at DML bio fuels in North Wales.  There were also countrywide a chain of farm shops that had set up filling areas in the north east region.  Mr White advised that there was also a firm in Brighton that would provide bio fuel.

 

(31)   Mrs Tweed commented that this was a stumbling block to the entrepreneurial farmers to sell the oil and for the public to find a distributor and having the capacity to store huge amounts of oil on their own premises.  Mr Scurlock felt that the heating oil market needed to be watched as the renewable heating incentive may breathe new life into this.  There had been experimental work undertaken in Norfolk with Riello a supplier of central heating/boiler systems.  

 

(32)   What happens if the land to grow the rapeseed oil is sold off for housing development?

(33)   Mr White felt that this was not an issue providing the development funding goes into the farming industry to maintain and increase then he did not see any difficulty in food production keeping pace with land loss but this required a step change in the R and D effort that went into the farming industry which had been systematically run down in the last 20 years.  Food 2030 which was DEFRA’s food security paper the whole thing was being rethought.  He felt that there were tensions with the seawalls not being maintained because of the cost and so some of the best and most versatile land, which was usually below the 5 metre contour was lost to the sea to benefit the environment biodiversity he felt that there were real tensions with what government policy said against food production.

 

(34)   What would it cost to convert and buy 100 litres of oil?

(35)   Mr Scurlock advised that Elsbett would sell a conversion kit for your car for £500 or £1000-£1100 fitted with the warranty on it.  The fuel cost in large bulk approximately 70 pence per litre in the smaller drums it was 9p pence per litre and you pay a small fee to rent the drum and pump from the supplier.  He was not sure of the cost for the conversion of the heating boiler but estimated it at £1000 for installation and the modification to the burner.  Mr Scurlock stated that under the current tax rules if you were using less than 2500 litres per year you did not need to register or pay duty but that was an administration simplification measure brought in by the HMRC it did not represent future government policy on taxation on bio based fuels.  He felt that the government had overlooked the opportunities for local production, distribution, and job creation in those supply chains. Mr White advised that there was a website called biodiesel filling UK which mapped out the companies that wee buying vegetable oil and diesel which was a voluntary initiative.  The Energy Saving Trust tried to maintain a data base of alternative fuels but dropped as it was difficult to keep up to date.  Morrisons until recently were supplying a 30% blend of biodiesel which was receiving quite favourable uptake with a fleet of operators but with the removal of the duty derogation the bulk supplier of the fuel Harvest Energy found that it was no longer economic Morrisons had dropped the product and that had created problems for them as it had put in a lot of investment working on which pump on all of the various forecourts was going to be dispensing the alternative product.

 

(36)   Do you think that we would regionalise the farms so that bio fuels could be produced in one area because renewables can be produced in some areas better than others?

(37)   Mr White said in the broad sense this was yes, farmers did not tend to collate but by collaboration the answer would be yes.  Farmers would be able to send out renewable energy if they worked together.  There were various projects that attempt to bring sources of wood stocks together but it was difficult but he felt that would reach this point.  Mr Scurlock said that many renewable technologies necessarily will export energy services just by virtue of the economic scale being deployed.  If you were putting on micro wind turbines or a small amount of solar PV then that would be meeting on farm energy needs but an AD generally in order to be economic with the feed in tariffs being accessible from central government had to be quite a big piece of kit it would be a relatively large dairy or live stock farm but it would produce ten times as much electricity needed on the farm itself so that electricity connect was essential to make that work and the public would definitely benefit from 90% of the renewable electricity produced on that farm.  For Kent as a whole there was every expectation that farmers would be net exporters of renewable energy services and providing that solution to help and deploy the low carbon economy.

 

(38)   What three things would you like the Select Committee to ask the government to do and what three things would you like Kent County Council to do?

(39)   Mr White said that the government should consider the following:

 

·   Grid Access

·   Better planning guidance

·   Better targeted Renewable Energy Tariffs

·   Look at permitted development rights for some renewable projects such as Photo Voltaic on farming building roofs

·   The wind industry were keen to see PD in rural areas extended to taller turbines

·   Government documents published SEEDA such as ‘Harnessing the Elements’ need to have teeth 

 

         and those for KCC

 

·   Lead by example

·   Put your efforts into lobbying Central Government for our points to the government

 

 

(40)   The Chairman and Members thanked Mr White and Mr Scurlock for attending the meeting.