Significant progress in the way the UK produces and uses bioenergy and renewable materials is highlighted in a report, published today by Defra and DTI.

In particular, there has been a fivefold increase in sales of biofuels in UK between 2004 and 2005, with production of biodiesel increasing at a similar rate between 2003 and 2005.

Creating Value from Renewable Materials , reviews progress two years on from launching the original Non-Food Crops Strategy, published jointly by Defra and DTI in November 2004. It also looks at priorities for the next three years and beyond.

David Miliband, Secretary of State for Environment, Food and Rural Affairs, said :

“There are clear signs that the bio renewables industry is expanding in the UK and this is set to continue. In England , we have seen increases in the numbers of farms and areas of land producing non-food crops, with sustainable and competitive growth across supply chains. There has been significant growth in the consumption and production of biofuels and use of biomass to produce heat and power. The report also highlights considerable progress in bringing to market a range of other renewable products.”

“This useful report sets out ideas for refocusing the Strategy over the next three years, with a view to further expanding the renewables sector and optimising the benefits to both the environment and UK competitiveness. We will study the suggestions in detail and respond within three months.”

The report highlights that markets are gradually developing for range of innovative renewable materials and products.

Commenting on the opportunities renewable materials and bioenergy offer for developing innovation and global competitiveness, Alistair Darling, Secretary of State of Trade and Industry said:

“ Bio renewables have great potential for the economy and the environment. The growth we are seeing – a 75% increase in land being used for non-food crops in the last two years alone – is very encouraging. Increasingly the farming industry is seizing on its potential.

“We have backed it with £66m through the Bio-energy Capital Grants Scheme. We will continue to support it.

“Whether it is biomass-sourced heat, plant-made pharmaceuticals or renewable chemicals the possibilities are developing by the day. We want to be a world leader in these new technologies, with government support, the excellence of our science base and the commitment of the industry we can be.”

Notes:

1. Main findings of 'Creating Value from Renewable Materials-a Strategy for Non- Food Crops and Uses - Two Year Progress Report'

The report flags the following main areas of progress since 2004 :

• In England the overall area of land taken up with non-food crop production has risen by at least 75% between 2003 and 2005 with corresponding farm gate' values of these crops almost doubling. During this time the number of farms growing non-food crops has increased by 20%.

• There has been clear progress in developing UK bioenergy sectors, albeit from relatively low starting positions compared to global leaders. In particular, there has been a fivefold increase in sales of biofuels in UK between 2004 and 2005 with production of biodiesel increasing at a similar rate between 2003 and 2005. The UK biofuel production capacity is continuing to expand, stimulated by the announcement of a Renewable Transport Fuels Obligation.

• A number of incentives have been announced by Government to help realise the potential of UK biomass including the creation of a new Defra funded capital grant scheme for biomass heat and funding for installation of biomass boilers in England . There is also an intention to launch a further round of the Bio-Energy Infrastructure Scheme in England in 2006/07. Alongside the establishment of a UK Biomass Energy Centre and development of a UK wide Biomass Strategy.

• Markets are gradually developing for range of innovative renewable materials and products including plant based pharmaceuticals, biolubricants, chemicals and construction products.

• Delivery of the Strategy has been strengthened with the continued growth in the work and reputation of the Government funded, National Non-Food Crops Centre (NNFCC) and the launch of the DTI Bioscience for Business Knowledge Transfer Network (KTN) in which NNFCC is a partner. There have been some improvements in links with the regional organisation to ensure delivery takes into account local priorities.

• Out of the 50 individual actions in the Strategy Action Plan, 17 have been completed, 31 are ongoing and 2 have yet to be started.

The report outlines the Project Board's suggestions for future work and priorities which can be summarised as follows :

• The Strategy remains the most appropriate overarching framework for driving the bio renewables agenda in England, but some refocusing of the Action Plan is necessary to build on lessons learnt from work to date, and to factor in real world changes and developments in bioscience and technology since 2004.

• In future efforts should focus on the following four sectors which show most potential for sustainable competitive growth:

•  bioenergy (for heat and power and transport fuels, including looking further at the potential for establishing whole crop biorefineries in the UK );

•  plant based pharmaceuticals;

•  renewable construction materials;

•  renewable chemicals.

• Continued, and in some cases reprioritised work in the following cross cutting areas should help push progress in the 4 sectors:

•  communication and education;

•  integrating supply chains and adding value to production chains;

•  more focused and joined up R&D;

•  and greater use of public procurement.

• Expansion of the renewables industry must continue to be carefully aligned with the complex mix of environmental objectives. For example, the impacts on issues such as biodiversity and waste management must be monitored and assessed.

• Government commitment and incentives are key to taking forward the bioenergy and renewable materials agendas in short and medium term. Government should provide a firm steer on what levels of progress it expects to see over the next three years.

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