Mary Coughlan (Donegal South West, Fianna Fail)

The importance and significance of biomass is increasing within the wider agenda of agriculture and energy policy generally. Most biomass energy in Ireland is derived from wood products which are converted into heat. The exploitation of wood resources, especially pulp wood, sawmill residues and harvestable forest residues, offers enormous potential and could contribute significantly to meeting our energy and heat requirements. Ireland has an excellent climate for growing and an ongoing supply of raw materials for wood fuel. The Minister for Finance has confirmed that the existing income tax exemption for forestry will not be changed, as its significant environmental benefits have been verified by a cost benefit analysis.

Wood residues are being used to produce heat for sawmills across the country. The wood energy market is poised for growth with the emergence of a number of commercial start-ups and a supply chain. The €27 million "greener homes" grant programme for the domestic sector, which was announced by the Minister for Communications, Marine and Natural Resources recently, will help to drive demand for wood biomass. The levels of grant aid to be made available for commercial scale biomass boilers, which will be announced in the coming weeks, will stimulate demand further. The Department of Agriculture and Food is actively promoting the use of wood biomass through grants to promote and develop sustainable forestry, including alternative timber uses. It is close to finalising a scheme of supports for the purchase of specialist wood biomass harvesting equipment. It is directly promoting the use of wood biomass by installing a wood-using heating system in the Department's offices at Johnstown Castle.

Short rotation coppice and miscanthus have considerable potential for heat and electricity generation. The production of short rotation coppice is relatively undeveloped in Ireland, however. Therefore, the costs of production, especially the substantial initial establishment costs, will be high due to the economies of scale. The Minister of State, Deputy Mary Wallace, is pursuing a proposal to reactivate establishment grants for short rotation coppice. I have received a number of proposals for the introduction of establishment grants for miscanthus and they are being considered.

The Department of Agriculture and Food, in conjunction with Teagasc and COFORD, has examined the potential of energy crops, wood biomass and farming and food by-products. Last year, it started to provide direct funding on a competitive basis to support priority research projects relating to biofuels. This funding is channelled through the Department's research stimulus fund programme. Three of the projects selected under the 2005 call for proposals, which relate directly to biofuel and energy crops, received grant assistance of €900,000. The funding available under the programme has been substantially increased. A further call for projects was recently advertised in the national press. This call also relates to the non-food uses of agricultural land.

Apart from purpose-grown energy crops and wood biomass, several by-products of the farming and food processing industries can be recovered and used in various ways as biofuels. I refer mainly to animal by-products such as meat and bonemeal, tallow, animal manures and food by-products. Some of the many significant opportunities for the use of animal by-products as biofuels are being considered actively. The proposals in question are being driven by commercial realities. As the disposal of by-products imposes a cost on industry, it makes economic sense to offset this cost by realising the potential of the by-products as energy sources. Tallow is used as a biofuel in thermal boilers in rendering plants and larger meat export plants to provide energy. A recent EU regulation provides for the conversion of tallow to biodiesel. Some rendering plants are considering building biodiesel plants for this purpose using various combinations of tallow, recovered vegetable oil and rapeseed oil. The importance of biofuels and bioenergy is recognised in the agri-vision 2015 action plan. The Minister of State, Deputy Mary Wallace, and I will continue to work closely with my colleague, the Minister for Communications, Marine and Natural Resources, to ensure agriculture contributes to the development of biofuels as part of a coherent energy policy.

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