House of Commons LPG debate
Source: www.publications.parliament.uk
Bill Wiggin (Leominster) (Con): I declare an interest as an owner of a vehicle powered by liquefied petroleum gas. The fuel duty on that greener, cleaner and more efficient fuel has spiralled in recent years, and the proposed increase in the Budget—to come into effect from October—will give little comfort to owners of LPG vehicles or the industry. In 2005, the duty on LPG stood at 9p per kilogramme. The 2006 Budget increased that by 3.21p, or 36 per cent., to 12.21p. Last year’s Budget increased that by another 4.28p to 16.49p—a rise of 35 per cent. And this year’s Budget points to a further increase of 4.28p, which is a rise of 26 per cent. That means that owners of LPG vehicles will, from October, have to pay 20.77p per kilogramme, which is 11.77p more than just three years ago, or an increase of 130 per cent. Similarly, the duty paid on compressed natural gas will soar by 52 per cent. as a result of this Budget, from 9p per kilogramme in 2005 to 13.7p.
Those duty increases are significantly higher in amount and proportion than the 2p increase on petrol, diesel, and bioethanol. There are more than 115,000 owners of LPG vehicles in the UK and the Government will penalise them by more than doubling the amount of fuel duty that they have to pay. That is not a particularly sustainable approach to take.
The Government’s policy appears to be to increase taxes on an area of green growth, instead of encouraging and promoting its expansion. That would also appear to go against the spirit and recommendations of the King review “Of Low Carbon Cars”, which was published on the same day as the Budget. Professor King highlighted four key challenges for reducing carbon dioxide from road transport. These included reducing CO2 through fuel efficiency and enabling an expansion of low carbon fuels. LPG and compressed natural gas fulfil those functions. The King review comments that there should be an:
“increased use of alternative fossil fuels such as LPG and CNG which can both offer small but significant life-cycle CO2 savings over petrol and diesel. Cars capable of using LPG or CNG currently represent less than 1 per cent of the total car stock but there is scope to expand their use.”
The Chancellor in his speech on Wednesday said:
“Professor King found that simply by switching to the cleanest cars on offer, motorists could save 25 per cent. of their fuel costs.”—[ Official Report, 12 March 2008; Vol. 473, c. 297.]
But by trying to cash in on the growth in LPG and CNG use, that 25 per cent. saving may not be as great, and the Government run the risk of failing to promote the cleaner fuels that more people need to use to achieve significant reductions in the carbon footprint of transport. The Government have their hands around the necks of LPG and CNG users, and are getting ready to throttle them. This was not a green Budget, but a green stealth tax Budget.
Turning to the issue of biofuel and its environmental potential, the Budget has again failed address the inherent weaknesses in Government policy towards this fuel. In spite of widespread criticism, the Government are pursuing the renewable transport fuel obligation to increase biofuel use. But, because the sustainability criteria have not been produced—if indeed they are developed at all—the relentless growth in biofuels may continue in an irresponsible way. We have seen the push for biofuels, particularly in the USA, leading to significant increases in food prices. In the last year alone, the price of corn has risen by 31 per cent., of soya by 87 per cent. and of wheat by 130 per cent. That has a knock-on effect right the way down the food chain. The consumer is hit with higher prices, and the rise in prices is also forcing domestic farmers into financial difficulties. Pig farmers are being especially squeezed, with the cost of feed doubling in the last year alone. If the industry does collapse, cheaper imports, reared—this is very important—to lower animal welfare standards, will flood the domestic market adding to shoppers’ carbon footprints.
The problems associated with the unsustainable growth of biofuel extend beyond food prices in the farming sector. The demand for palm oil for use in biofuels as well as in food and cosmetics is leading to the destruction of the rainforests of Borneo and Sumatra. As much as 10 million hectares of habitat could be lost, and that is having a devastating impact on orang-utan populations, which might be as low as 7,000 in Sumatra. They could face extinction within five years.
I must take this opportunity to pay tribute to the roundtable on sustainable palm oil, which is a fantastic initiative designed to ensure that the palm oil that we buy is from sustainable sources that also live up to the standards on issues such as human rights and exploitation that we would expect from our major retailers. However, despite my warm words, I think that they need to move faster. I am warned that it might be only five years before we lose our sustainable population of orang-utans in the wild. It may take that much time to get sustainable palm oil on to our shop shelves. I fear that if palm oil comes into our fuel tanks without awareness among the general public, an explosion in the demand for that palm oil would quickly lead to the loss of those great apes. Sime Darby, a major palm oil producer that seeks to ensure that it can deliver sustainable palm oil, has invited me to visit Malaysia and Borneo to see what is being done to preserve the habitats of those great apes. I also congratulate those firms who have already changed their buying policies to include palm oil from sustainable sources.
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