Mary Coughlan (Donegal South West, Fianna Fail)

I accept the €45 per hectare available under the energy crops scheme is a small enough incentive for the growing of energy crops and is not sufficiently attractive in itself to stimulate the growing of such crops. I called for a review of the premium at the February meeting of the Agriculture and Fisheries Council for that reason. I am pleased the European Commission has undertaken to review the operation of the scheme, which was reiterated today by the Agriculture and Rural Development Commissioner, Mariann Fischer Boel, on the floor of this House. The production and utilisation of agricultural products for energy purposes can be sustained in the longer term only if biofuels generate a more favourable return than traditional market outlets. I am confident the extension in the last budget of excise relief of €205 million, which will support the use and production of 163 million litres of biofuels annually when it is fully operational, will help to drive additional demand for the production of energy crops.

Following the decision by Greencore to cease sugar production in Ireland, it has been suggested that bioethanol production might provide an alternative outlet for the sugar beet crop, possibly using the facilities in Mallow. The agreement on the reform of the EU sugar regime provides for a restructuring scheme under which a sugar manufacturer that renounces its quota and completely dismantles a sugar factory may receive 100% of the restructuring aid available, of which at least 10% is to be reserved for growers and contractors. The option of partially dismantling a factory and using it for non-sugar production, while continuing to attract 75% of the aid available, is also open to sugar manufacturers. During the negotiations leading to the agreement, I argued strongly that the provision in the agreement relating to partial dismantling should be extended as an incentive to the production of bioethanol. I am glad we achieved that aim. The question of full or partial dismantling and the continued use of the Mallow plant for bioethanol production are matters for commercial decision by Greencore. Under the relevant regulations, the initiative in this regard rests with the company.

As the Minister for Agriculture and Food, I hold a single special share in Greencore. The share does not empower me to get involved in the company's operational matters or normal business decisions. I refer to a decision to use the facilities for bioethanol production, for example. However, I raised the possibility of using the Mallow plant for ethanol production with Greencore having regard to the option under the restructuring scheme, the inclusion of sugar beet in the energy crops scheme and the expanded excise relief scheme. The company informed me it does not intend to produce bioethanol in Mallow, but the framework remains in place whereby other potential developers could consider the option.

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