Brian Cowen (Laois-Offaly, Fianna Fail)

Vehicle registration tax, VRT, relief for flexible fuel vehicles, as announced in the 2006 budget, was provided for in the Finance Act 2006 with effect from 1 January 2006. We have been informed by the Revenue Commissioners that, to date, 12 flexible fuel vehicles have availed of the VRT relief, although this low number reflects the fact that legislation underpinning this relief was only enacted in late March. It was also announced in the budget that the VRT relief for hybrid electric vehicles, in place since January 2001, would be extended to the end of 2007. By the end of April 2006, 922 such vehicles had availed of the relief since its inception.

A new large-scale scheme of biofuels excise relief was also announced in the 2006 budget as a development from the preceding pilot biofuels excise relief scheme that has been in operation since 2005. The new scheme will provide for excise relief on up to 163 million litres of biofuels per annum, cost more than €200 million over five years, starting this year, will when fully operational result in CO2 savings of more than 250,000 tonnes per annum, meet a target of 2% transport fuel market penetration by biofuels, help reduce our dependency on conventional fossil fuels, and stimulate activity in the agricultural sector.

The process of applying for state aid clearance from the European Commission for this scheme is under way. Once approval has been granted, the Department of Communications, Marine and Natural Resources will advertise the scheme and set out the procedures for applying for the excise relief.

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