Joanna Tuffy (Dublin Mid West, Labour)
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Question 27: To ask the Minister for Communications, Energy and Natural Resources if his Department has a policy on the promotion of bio-fuels; and if this policy takes account of the impact of bio-fuels on the environment. [20778/08]

Seán Sherlock (Cork East, Labour)
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Question 54: To ask the Minister for Communications, Energy and Natural Resources if the targets for bio-fuels still stand; if he will review these targets in view of growing concern regarding food prices and supplies worldwide; the percentage he estimates will be imported from developing countries in order to reach Ireland's target on bio-fuels; the amount of bio-fuels produced here; and if he will make a statement on the matter. [21374/08]

Eamon Ryan (Dublin South, Green Party)
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I propose to take Questions Nos. 8, 27 and 54 together.

I will shortly launch the public consultation on the proposed bio-fuels obligation. The consultation process will enable all interested stakeholders to submit their views on the proposal. In that context, EU developments on bio-fuels policy in light of the emerging concerns in relation to sustainability will be fully factored in and will be publicly debated. Specific details of the obligation will be finalised on foot of the consultation process. The intention is to have the bio-fuels obligation in place next year in line with the programme for Government.

We are currently working to deliver the EU indicative target of 5.75% penetration of bio-fuels by 2010. Under the excise relief schemes over 50 million litres of bio-fuels are being deployed in Ireland, of which in the region of 25 million litres are produced in this country. The EU Commission's proposed renewable energy directive sets a minimum mandatory target of 10% market penetration of bio-fuels in transport in all member states by 2020. The proposal also includes an explicit framework for sustainability criteria in relation to bio-fuels. These criteria are designed to ensure that bio-fuels deployed by member states are produced sustainably and do not contribute towards the degradation of the natural environment, including the destruction of forests, wetlands or long-established grassland. The criteria will also set strict targets for bio-fuels in terms of the greenhouse gas emissions they must save before they can be considered eligible as counting towards national targets. My Department is actively engaged in the EU Council working group which is working to agree the sustainability criteria.

Currently, the feed stocks used for bio-fuels production are generally sourced on the open internationally traded commodities market with little or no information attached to these with regard to their origins. It is only through setting stringent sustainability criteria that Ireland and other member states will be able to trace the source of these fuels and obviate the cumulative effect of unsustainable practices on developing countries. I wholeheartedly support the Commission's commitment to ensuring that rigorous sustainability criteria are put in place and complied with under the new directive.

Eamon Ryan (Dublin South, Green Party)
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I fully sympathise with and understand the difficulties faced by people, particularly in the haulage industry and elsewhere, because of increasing diesel prices. However, providing a short-term solution that ignores the fundamental long-term problem is not doing them or anyone else a favour.

Eamon Ryan (Dublin South, Green Party)
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I am talking about the haulage people. We have the eighth cheapest priced diesel in the European Union. We will not serve those people well by addressing a long-term problem with a short-term solution which will not have any material effect in the long run. We are far better investing any resources we have in providing a long-term solution to what is a long-term problem.

I return to what I said earlier. The crucial issue is that we identify to the Irish people and provide real clarity as to the scale of the challenge and problem we face. A total of 60% of our energy comes from imported oil. We do not have any oil ourselves and we are not likely to have any in the next 20 years. The majority of our oil will come from the Middle East where we do not have a secure future supply. We are exposed. The response to that exposure cannot be to pretend that it is just a short-term problem and that if we reduced our tax by 1%, which would probably be gobbled up by the market anyway, we would solve the problem. We would not. We need to make fundamental changes in everything we do to address that long-term fundamental problem.

Bio-fuels represent one of the answers. One of the greatest frustrations for companies who want to get into this area has been that the tax-exempt scheme was a competitive scheme which left a lot of companies — of the kind the Deputy referred to — outside the process. They did not win in the competition, therefore they could not develop anything. They could not get the excise duty exemption. The key attraction of an obligation scheme is that it does not provide such a restriction; it is an open door to anyone who can make an economic and, crucially, a sustainable case for their production. Then there is no impediment to them in developing fuels.

Liz McManus (Wicklow, Labour)
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On the last point, I support the Minister in his call for honesty. I do not have a problem with that and I know it is difficult but I ask the Minister to consider that it is not honesty that the poor and the elderly of this country need but rather support. The Minister cannot expect them to bear the burden he is asking of them this coming winter. It has to be a fair burden and we all must share the burden fairly. What the Minister is doing by refusing to recognise that there is a need for a fuel poverty strategy is expecting the poor to pay an undue price, which is unacceptable.

Is the Minister aware that while he is expecting the consumer to pay increased prices, he must also accept that the Government is making an absolute killing out of increased fuel prices? Is he aware that in 2007, the return from VAT to the Government coffers was €970 million and this year it will be well over €1,000 million? Is he willing to accept that this money should be ring-fenced and put to good use in terms of ensuring that we have a good bio-fuels strategy and a good meeting of that requirement?

I return to the issue of bio-fuel traceability. If I buy a steak in a supermarket I can see the farmer's name and a picture of the farm where the animal was reared, yet the Minister cannot tell me how much of our imported bio-fuel comes from the developing world. Unless that issue is addressed, all the fine words about protecting against world hunger are meaningless.

Eamon Ryan (Dublin South, Green Party)
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I share the Deputy's concern for those suffering from hunger and poverty, which is a crucial aspect of this matter. That is why the Department of Social and Family Affairs is spending €158 million this year on natural gas and electricity allowances. That is why my colleague, the Minister for the Environment, Heritage and Local Government, Deputy Gormley, introduced a new scheme involving a €10,500 grant for people to upgrade their properties.

Liz McManus (Wicklow, Labour)
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Putting in oil-fired central heating.

Eamon Ryan (Dublin South, Green Party)
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That is why we have practically doubled the budget for the warmer home scheme to assist people in low-income housing to cut back on the use of fuel, which is the best long-term solution, rather than trying to reduce tax which is a short-term solution.

The Deputy is correct in saying that at present it is impossible under World Trade Organisation rules to differentiate between various bio-fuels. They are sold globally and purchased on spot markets, so one does not have ultimate traceability. That is why it is important to support, as I have done, Commissioner Piebalgs and Commissioner Dimas in their attempts to establish a new system to ensure full traceability on the energy efficiency of bio-fuel crops. There are concerns that one might use as much energy in creating certain bio-fuels as one would obtain from them. The new EU system will also determine whether the bio-fuel is from a sustainable resource. It is important to support that EU initiative. It is the only way of achieving such traceability and obtaining a secure supply of bio-fuels, which we use not only to reduce our emissions but also, crucially, as a back-up stock in case of future oil supply difficulties, while helping Irish agriculture in the process.

Joe McHugh (Donegal North East, Fine Gael)
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Food imports and exports are completely reliant on the haulage industry. Excluding excise duties, there has been a 360% increase in fuel prices over the past five years. Fishermen say that 70% of their turnover is being spent on diesel for their boats, while the corresponding figure for the haulage industry is 50%. Many haulage operators have bought new lorries that are economically efficient and are adding blue liquid solutions to be environmentally compliant. Does the Minister think there is an opportunity to incentivise the haulage industry in some way, perhaps by discounting motor tax? In his response, the Minister will say that we must look at the long-term position but, as Deputies McManus and Coonan have said, there is a short-term crisis because lorry drivers are going out of business every day. What measures can the Minister take to ensure the future of the haulage industry? They will go out of business in the short term, not to mention the long term.

Eamon Ryan (Dublin South, Green Party)
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We are not talking about a long-term issue because it has arrived. Oil at $135 a barrel is a signal that, increasingly, supply cannot meet growing international demand.

Joe McHugh (Donegal North East, Fine Gael)
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The Minister should answer the question.

Eamon Ryan (Dublin South, Green Party)
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We must prepare people for the medium term.

Joe McHugh (Donegal North East, Fine Gael)
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Does the Minister have any incentives for the haulage industry?

Eamon Ryan (Dublin South, Green Party)
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We must prepare for a time when supplies contract.

Jack Wall (Kildare South, Labour)
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The Minister cannot answer if the Deputy is interrupting him.

Joe McHugh (Donegal North East, Fine Gael)
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He is rambling.

Jack Wall (Kildare South, Labour)
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Please allow the Minister to answer the question.

Eamon Ryan (Dublin South, Green Party)
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The State is spending significant resources on road networks to facilitate the haulage industry. We have developed this country's economy on the basis of supporting such a freight system.

Joe McHugh (Donegal North East, Fine Gael)
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What short-term incentives does the Minister have to prevent haulage operators going out of business?

Eamon Ryan (Dublin South, Green Party)
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Rather than offering a short-term tax break to try to solve a long-term problem, it would be better to use any resources to make a fundamental shift in how Ireland works and to prepare the country for a fossil fuel future that is very different from the one we have had over the past 20 years.

Joe McHugh (Donegal North East, Fine Gael)
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That is not an answer.

Eamon Ryan (Dublin South, Green Party)
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I disagree fundamentally with the Deputy's approach in that regard and do not believe it is the right solution.

Joe McHugh (Donegal North East, Fine Gael)
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They are going to be out of business.

Eamon Ryan (Dublin South, Green Party)
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The Deputy is correct in saying that farmers are also exposed. There are myriad reasons why world food prices have gone up. One such reason is that climate change has affected crops in Australia and elsewhere.

Eamon Ryan (Dublin South, Green Party)
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Another reason is that diets are changing in Asia. The consumption of meat has doubled in the last five years in China, which has changed the agricultural model because it takes a lot more food grain to produce a pound of meat than a pound of grain. In addition, certain food crops have gone into bio-fuels rather than the food chain and while that is not the main reason for rising food prices, it is one of them. Another reason for higher food prices is that globally farmers are finding it difficult to survive or succeed because of increasing oil prices. That affects the cost of fuel for tractors, as well as pesticides and fertilisers which are oil-based. Irish farmers are also exposed and the agricultural community must consider how it can develop in future.

Eamon Ryan (Dublin South, Green Party)
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The Department of Agriculture, Fisheries and Food is engaged, via Teagasc, on a number of support schemes and a range of different biomass projects. The Committee on Climate Change and Energy Security is working collectively with my Department and the Department of Agriculture, Fisheries and Food to see what solutions we can deliver to cut our emissions and oil use. It is a win-win situation and the way for our economy to go. We are only starting but we have a radical shift to make.