Carbon emissions performance standard

‘(1) The Secretary of State shall make provision by regulations for a carbon emissions performance standard to set the maximum level of carbon dioxide that may be emitted for each unit of output by any new coal fired electricity generating station.

(2) The emissions performance standard shall come into effect immediately on passage of this Act and will be progressively lowered so that new coal fired power stations will produce no carbon emissions from 2020.’.—(Simon Hughes.)

Brought up, read the First time, and Question proposed (this day),That the clause be read a Second time.

Question again proposed.

I remind the Committee that with this we are discussing the following : New clause 2—Emissions performance standard—

‘(1) The Secretary of State may by regulation introduce an Emissions Performance Standard to apply to all electricity generation plants.

(2) In this section “Emission Performance Standard” means a restriction on the amount of carbon dioxide that electricity generation plants are permitted to emit.’.

New clause 5—Carbon emissions performance standard—

‘(1) The Secretary of State shall make provision by regulations or otherwise for a carbon emissions performance standard to set the maximum level or levels of carbon dioxide that may be emitted per unit of output by all individual generating stations.

(2) The Secretary of State shall review the emissions performance standard established under section (1) no less frequently than every three years.

(3) In establishing the level or levels of the carbon dioxide emissions performance standard in section (1), and in carrying out the review required in section (2), the Secretary of State must—

(a) take into account the most up-to-date scientific knowledge about climate change;

(b) obtain and take into account the advice of the Committee on Climate Change, particularly in relation to carbon budgets, medium and long-term emission reduction targets, and future emissions from the electricity generating sector.

(4) The Secretary of State must introduce the standard under section (1) no later than 12 months from the date on which this Act is passed.’.

I presume that it is still acceptable for us to be jacketless, if we choose to be so, Mr. Bayley.

It is.

Thank you. I had just finished by accepting that we understood some of the points that the hon. Member for Wealden had made about the difficulties of an over-precise clause. He made the perfectly acceptable general point that there is a consensus—certainly on the Opposition Benches. His party, my party and the Scottish National party agree that there should be a provision for emissions performance standards in the Bill.

Our proposal expresses what we think should be the starting point for that debate. I absolutely understand the points that the hon. Gentleman made; we need to allow for the flexibility and definition that he suggested, although I would not go as far as he would in having a completely open and general clause. That would not be my preference.

The hon. Gentleman made one other point, which was that there probably needs to be a more precise definition of a new coal-fired power station. I understand that the intention of the drafting was that it would be defined as a power station that had not started operating before 2020 and was to start operating from then on. I think we can accommodate that difficulty and that question of definition.

The hon. Member for Angus, who was very sympathetic to the idea that we should have emissions performance standards in the Bill, expressed a preference—not a lack of support for new clause 1, but a preference—for new clause 5. He said that we absolutely need certainty, not least so that there can be the drive towards the technological solutions that we all need down the road for carbon capture and storage.

The response from the Minister of State was partly helpful, but not as robust as I would have liked it to have been. Perfectly reasonably, she set out the Government’s general commitment and her specific commitment to the cause of dealing with carbon emissions. It is a point that clearly differentiates us from some people in other parts of the Committee and the House. I noted her phrase—accurately, I hope. In respect of emissions reductions, she wanted as much and as quickly as was feasible. Of course, there is always the question of what is feasible.

My starting point in the general debate, on advice, is that the ETS in the current EU system will not be sufficient. The market of buying and selling, although progressive and innovative, does not in the end—as it were—capture the whole problem. As I understand it, that is the Government’s position. That is certainly my interpretation of the Committee on Climate Change’s position in its last report at the end of last year. We need to find ways in which the cost of carbon is better integrated into business decisions. The Minister very specifically said that the Government had come to the conclusion that the ETS does not entirely do that; it is a way of doing that, a proposed step on the road. There will be a bigger debate about that issue as more people become aware of the implications.

The Minister was right to say that the ETS was not the only option. Although I prompted her, I did not hear her say where the Government had a preference; I am not suggesting that we open up the issue again, but I would be grateful to be told, in writing if not now,  about the other options. She has listed two other options: a cap on emissions of individual power stations and a rising hours limit. I do not think that I heard her come back to that. If she wants to intervene, I will be very happy to let her do so for the record.

I was hoping that we might finish this morning; that is why I suddenly speeded up and tried not to, perhaps, remember as many questions as I might have. It is not our place at this stage to look for preferences at all. The burden of my case is that we have the rolling review and we look at the options as we progress in learning about CCS. We will then look at what else might be necessary. That will be the time to look at specific choices.

That is consistent with what the Minister has said. I do not accept that a rolling review by 2018 will be sufficient; it has all sorts of weaknesses in relation to determining the market’s decisions. I understand the argument, but we could be much more certain and thereby get much better outcomes.

The last group of issues that the Minister raised related to the road map and its budgets and consequences. She undertook to look at the question of whether she would put into the public domain the rest of the correspondence between our Government and the European Commission. It would obviously be very helpful if she did so. I have shared the parts of the correspondence that are, perfectly properly, now in the public domain. The Minister says that there has been a further response, but we have not seen the reply from the Commission. We would all benefit from seeing that. I hope that there will not be a row about that, and that the Minister can facilitate it at the earliest possible opportunity after Committee stage.

I note the intervention of the hon. Member for Southampton, Test, who, as always, asked pertinent questions. The debate is about how we best end up with a system that minimises emissions and maximises certainty while making sure that we incentivise people to find the solution that allows and does not prevent coal to continue to be used. I think there is consensus on that. We need a harder view to enable us to drive towards that conclusion. Industry generally shows itself to be responsive, given a long enough lead time. There is a competition issue, but, as most of the consortiums are unlikely to be wholly British or only British, and as lots of other international companies are participating, there is an international, not just a national, interest in our moving as far and as fast as possible.

We had a substantial debate this morning, as befits a really important issue. I accept that the new clause that I and my colleagues have tabled will have to be modified. Instinctively, I would not want to go as far as new clauses 2 and 5 unless I was driven to it. However, I am absolutely clear that it would be much better for the Bill to include a provision for emissions limits.

If we come up with a different formulation of words, I hope we will be able to persuade the Minister that a clause on a carbon emissions performance standard would be acceptable and of benefit. As in other areas, I am happy to talk to colleagues from other parties and the Government to see whether we can make some progress between now and Report.

I understand from the Leader of the House’s business statement that we are likely to have a couple of weeks before the Bill returns. It was not in the business announced for next week or the following week, so it sounds as though we have a clear fortnight before it comes back. That should give us time to get a substantial amount of work done. I hope that we will be able to make progress and that the issue under discussion will be included in the Bill.

We have had a useful debate about the emissions performance standard. It is important for us to establish a principle that we are in favour of the ability to introduce an EPS. I agree with the hon. Gentleman in that respect. The benefit of the approach that we have taken in new clause 2 is that that can be done through secondary legislation, rather than through a new Energy Bill or Act.

The Minister said earlier that she did not think that the EPS would be good in relation to encouraging investment. That depends, however, on where the EPS is set. An EPS set at a level with which industry is comfortable and that it believes achievable would actually be helpful to it in its investment discussions. It would know exactly what was required by 2020, 2025 and 2030. The issue, therefore, is not whether the EPS encourages investment, but the level at which it would be set.

We think that new clause 5 has significant attractions. It also has significant cross-party support, and there is a basis for developing it further on Report. As the hon. Member for North Southwark and Bermondsey does not plan to press his new clause to a vote, I seek your permission, Mr. Bayley, to press new clause 2. It is important that we have the chance to say that in principle we support the idea of an EPS and that Ministers and the Secretary of State should have the power to put it in place in due course.

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.