Noel Dempsey (Meath, Fianna Fail)

Eight projects were successful in the first scheme, and 16 were selected under the second scheme. Significant volumes of bio-fuels are already coming on stream in the fuel market. For example, ConocoPhillips at the Whitegate refinery, has already commenced distribution of bio-fuel complying with the diesel standard. Diesel pumps throughout Munster are selling diesel, a percentage of which has been made from vegetable oils.

Another successful applicant under both schemes is selling petrol containing 5% ethanol at 85 service stations, and selling ethanol in blends of 85% in 13 service stations. Flexi-fuel vehicles can use the 85% blend of ethanol in petrol. High blends of bioethanol, offer significant potential in terms of CO2 reductions and greater market penetration.

Recognising this, the Government introduced a 50% reduction on vehicle registration tax for flexi-fuel vehicles in the 2006 Finance Act. Two leading car manufacturers have already introduced these vehicles in the market and 200 flexi-fuel vehicles have been purchased to date. In addition, some 1,500 vehicles have been purchased under the 50% VRT relief scheme available for hybrid electric vehicles. The Government is now embarking on a review of VRT to link tax rates with CO2 emissions. This is further evidence of the integrated approach being taken by Government on sustainable energy policy.

Bio-fuels offer significant potential for rural development and I have been working closely with the Minister for Agriculture and Food to ensure the appropriate measures are in place to support the farming sector in participating in the emerging bio-fuels market. In the budget, the Minister for Finance announced three critical agriculture measures which complement the renewable energy measures being implemented by the Department of the Environment, Heritage and Local Government. Of particular relevance to the bio-fuels sector is the introduction of a top-up of €80 per hectare on the current energy crop payment. This will bring the payment to €125 per hectare and offers a significant incentive to farmers to grow energy crops. Further incentives are being offered to assist farmers to grow and harvest energy crops for the renewable heat and electricity markets.

It would have been helpful if Deputy Naughten had done some research before making claims in regard to REPS. I note that the Minister for Agriculture and Food, Deputy Coughlan, today confirmed that REPS farmers are not excluded from the new bio-energy scheme for willow and miscanthus——

See this speech in context