Michael Mulcahy (Dublin South Central, Fianna Fail)

The House will be aware that in the Finance Act 2004, a relief from mineral tax was introduced by the Minister for Finance for pilot projects for the production of biofuel and for testing the technical viability of biofuel as a motor fuel. This relief was confined to pilot projects. In the Finance Bill of this year, the Minister significantly expanded this scheme to make it a five-year scheme for mineral oil tax relief to commence in 2006 and end in 2010. This will cost approximately €20 million this year, €35 million next year and €50 million in each of the following years. When fully operational, this relief scheme is expected to support the use and production in Ireland of about 163 million litres of biofuels a year.

In this year's Finance Act, the Minister also introduced a vehicle registration tax relief of 50% for flexible fuel vehicles. This scheme is intended to encourage the purchase of such vehicles which use bioethanol, a blend of a minimum of 85% ethanol and petrol. That is excellent work by the Government but it needs to go further. Large motor vehicles which consume a large amount of petrol or diesel should have very high rates of vehicle registration tax. They should be discouraged as strongly as possible. Smaller cars with engine sizes of up to 1300 cc or 1600 cc should be fully exempt from vehicle registration tax to encourage the majority of our population to buy such vehicles. That kind of radical measure is needed to shift the balance away from the large, fuel guzzling cars which in a time of energy shortage virtually amount to an obscenity. There is no excuse for such vehicles, and I take a very strong line on that.

With regard to bioethanol, I agree with other speakers that through the former sugar factories, we should encourage the creation of fuels from sugar beet. That should become a priority for the Government.

On the consumption side, is the Minister satisfied that enough has been done to reduce our dependence on natural fossil fuels? I am not so satisfied. This is a crisis that we should take steps to remedy.

It is time there was a major policy statement from the Government setting out initiatives and measurable savings in consumption over the next ten years. These targets should be the subject of regular debates here.

There is an obligation on all of us to assist those in the energy industry who are doing their utmost to bring energy into the country. I congratulate the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, who has done his utmost wherever a dispute has arisen to put in place reasonable mediation where people with genuine grievances can make their views known. There is an onus on everybody to be reasonable and to help the maximum amount of energy reach this country which, as Deputy Coveney said, is at the end of the fuel chain.

I welcome the Bill. While the Government is doing much in the competition sector it needs to do more in the consumption area and needs to encourage, by subsidy or otherwise, the use and production of alternative fuels.

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