The prospective new chair of the Environment Agency is refusing to divest his shareholding in a hydrogen and carbon capture company chosen for a major government project.
Alan Lovell stood down as a director of Progressive Energy last month, according to Companies House records, two days after being announced as the preferred candidate for the role running England’s environmental watchdog.
The company leads the North West Hynet project, which has been chosen by ministers to drive decarbonisation in the north-west and north Wales as part of a £1bn push for carbon capture and hydrogen in the UK net zero strategy.
The committee on climate change said in a 2019 progress report that in order to develop hydrogen options, significant volumes of the gas must be produced to low-carbon standards at multiple industrial clusters.
MPs were told this week that Lovell had put his role as chair of a “renewable energy” company into his declaration of interests. They were told he had stepped down and had proposed that his financial interest in the firm could be managed by him recusing himself from decisions relating to the company.
But Sir Robert Goodwill, the chair of the environment food and rural affairs (Efra) committee, asked: “Would it not be more effective or less of a risk to divest?”
Lovell replied: “I don’t feel that I need to do that.”
The accountant and businessman, who has made a name stepping in to rescue failing companies, including a failed attempt to shore up the construction firm Carillion, said he felt MPs should be pleased he had been engaged in investment in important sectors.
“I regard the CCS [carbon capture and storage] and hydrogen sector as an extremely important one. I have been investing in it since 2009,” he said. The company, he added, had been selected as the coordinator of one of the two clusters that the government was backing.
Lovell defended his decision to keep hold of his shares. “For a start this project is going to go ahead. It has good enough backing for the government that it is going to go ahead. I don’t believe there is any issue on that score,” he told MPs.
He said the project would be coming to the Environment Agency (EA) for planning and permitting consents. But he did not see a conflict of interests, telling the committee: “These would be round the edges, I would say, of the value of the company. Further I shall not be on the environment and business committee of the agency, which will consider permitting and planning issues.”
Lovell said he had been reassured by the chief executive of the agency, Sir James Bevan, who was “quite adamant” about him not being involved in any decisions that came to the EA board.
“I take confidence in the fact that he himself is confident about that and I feel it is OK to retain the investment,” Lovell said.
His candidature to succeed Emma Howard Boyd as chair comes at a time when the agency is under attack over its failure to improve water quality in rivers and hold water companies accountable for pollution. There is also concern within the agency over its failure to take tough action against polluters.
Lovell’s selection, the government said, followed a rigorous process conducted in accordance with the ministerial governance code on public appointments. Its announcement last month made no mention of his role at Progressive Energy but cited other companies where he held directorships.
Lovell told MPs on the environmental audit committee and the Efra committee that he was not an “activist” on the environment. His environmental credentials, he said, included the fact that he came from a family of farmers, his interest in renewable energy and his ownership of a wood in Wiltshire.
MPs will produce a report on Friday about the appointment before Lovell’s position is confirmed.
