Tommy Broughan (Dublin North East, Labour)

I wish to share time with Deputy Upton. I commend Deputies Naughten, Durkan, Bruton, O'Dowd, Olivia Mitchell and their Fine Gael colleagues on bringing forward the Biofuels (Blended Motor Fuels) Bill 2007 and highlighting the critical importance of developing a vibrant Irish bio-fuels industry.

The transport sector across the world is heavily dependent on oil, with approximately 90% of world transport being oil-dependent, and it consumes a vast proportion of global energy resources. Because we are now increasingly facing the challenges of peak oil, climate change and the development of a low-carbon and sustainable economy it is critical that we encourage a viable and significant bio-fuels sector.

There are enormous benefits to bio-fuels and they provide a unique mechanism for reducing the present over-dependence on oil in transport. Given that bio-fuels are so similar to fuel produced from fossil fuels it is possible to incorporate them into the supply systems that already exist at petrol stations. In recent years we have seen the success of Brazil, Canada, the United States and others in that regard.

At present almost 100% of Irish transport is dependent on imported oil, with a requirement for 200,000 barrels per day, and there is a need for the rapid deployment of cleaner fuel sources, particularly those derived from our own native agricultural resources. This Bill aims to ensure that all motor fuels comprising mineral oils will at least partly be made up of bio-fuels. It provides an interesting first legislative step for advancing bio-fuels and it is telling that it was not brought forward by the Minister of State at the Department of Finance, Deputy Parlon, the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, the Chairman of the Joint Committee on Communications, Marine and Natural Resources, Deputy O'Flynn, Deputy Peter Kelly or any of their colleagues, who have provided few initiatives or incentives for bio-fuel development during the term of the outgoing Government.

Last year I remember Deputies Naughten and Upton being very upset as the sugar factories in Mallow and Carlow were closed down, causing devastation in those two local communities. The Government refused even to consider the possibility of transforming those two factories into bio-fuel centres. We were all contacted by people on that issue, particularly in Mallow, where many believed the refinery in the town could easily have been adapted to bio-fuels.

Deputy O'Flynn mentioned the work done by Cork City Council, about which I heard at the recent meeting of the Joint Committee on Communications, Marine and Natural Resources. I recently congratulated Dublin's Lord Mayor, Vincent "Ballyfermot" Jackson, on introducing in a fleet of bio-fuel cars. The new 18 Ford Focus flexi-fuel environmentally friendly vehicles run on any mixture of conventional petrol and E85 bioethanol. They will constitute 10% of the council's car fleet and will be used by staff from a number of departments. However, as with other major developments in this area, it has been left to local government to introduce innovative developments. For example, Dublin City Council, on which I once sat, has brought froward a Wi-Fi broadband zone. Why can the national Government not introduce such initiatives?

I have watched with interest the new series of media advertisements for the Power of One energy efficiency campaign and I strongly support its awareness-raising objectives. People have noted it but the power of one should have started with one Minister. The refusal of 15 out of 17 senior Ministers, as recently confirmed by a report in the Irish Independent, to opt for greener, more fuel-efficient ministerial Mercedes or Volvos is a terrible example to the rest of the country. The Minister must start with himself because this refusal flies directly in the face of the message of personal energy responsibility he has sent to the public.

The Bill before us does not include any actual targets. Although setting targets can be very useful for achieving real advances in renewable energy resources, I note that the intention behind the absence of targets is to allow flexibility for the Government of the day, hopefully a new Government, to increase the proportion of bio-fuel as much as possible. Almost two years ago, on behalf of the Labour Party, I called for a mandatory bio-fuel obligation, as has been proposed in the Bill, so that we would meet the 5.75% target.

This Government's record on developing renewable energy sources is, despite what the Chairman of the Joint Committee on Communications, Marine and Natural Resources said, absolutely dire and this is even more true when it comes to bio-fuels. Deputy Peter Kelly will remember that when I raised the issue of senior citizens in this city looking for an insulation grant in March 2006 we discovered that the HSE budget for the city was totally exhausted. That showed this Government's commitment to renewable energy to be non-existent.

In late January the EU released figures showing that bio-fuels contributed just 0.05% of the Irish fuel mix in 2005. As a fellow member of the Joint Committee on Communications, Marine and Natural Resources, Deputy Peter Kelly will be interested to note that, in 2004, the proportion was 0.00002%. Such was the commitment of the then Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, the Taoiseach and the Minister for Finance, Deputy Cowen. The Government's national indicative target, which the EU belatedly gave us, of 0.06% was not even approached. Instead the Government chose to establish an even more meagre target. We were supposed to have reached a target of 2% bio-fuel by the end of 2005, another of the many missed targets of the outgoing Government, following decentralisation, education and health.

The 2002 programme for Government, which I know Deputies read for entertainment, is a work of fiction worthy of submission for the Booker prize. Most of its targets were not met.

Until yesterday the main mechanism through which bio-fuels were encouraged was a limited bio-fuels tax relief programme. In August 2005, the bio-fuels mineral oil tax relief scheme was introduced, which allowed for €3 million per annum in excise to be forgone on bio-fuels. Many of our EU partner states were zooming ahead with fiscal measures at that stage. Finally, in budget 2006, an excise relief package for bio-fuels of €200 million over a five-year period, from 2006-10, was announced. I note that, of the €200 million in tax relief, €150 million will be spent by the next Government. If the Labour Party gets the opportunity, we will be delighted to do so and will increase the figure.

In February 2006 the EU presented a new bio-fuels strategy to encourage member states to take more action to reach the 2010 target. A number of measures were proposed, including seven policy axes including possible mandatory targets, which we need at every pump and in every forecourt. They also include the promotion of second generation bio-fuels, for example biomass and wood, and appropriate environmental standards. It is a useful programme which we should adopt.

Due to the present cost differential with traditional fossil fuels many EU governments have also intervened to promote bio-fuels, often in the form of a remission on excise duties. One of the best studies I have read, by a group of UCD-based economists, found that to encourage bio-fuels the exemption from excise duties is the instrument that incurs the least transaction costs. The report is entitled Stimulating the Use of Biofuels in the European Union: Implications for Climate Change Policy, and is authored by Ryan, Conway and Feirreira, UCD 2004. For the past few years the UK has set the excise duty for bioethanol at 20p below the excise duty of ultra-low sulphur petrol and sulphur-free fuel. Spain, Finland, Germany, the Czech Republic and Sweden have all taken decisive action on excise exemption.

Allied to the lack of development in the bio-fuels sector has been the stagnation of biomass. I used to be my party's spokesperson on forestry, when it was in the same portfolio as communications and natural resources, although it is now with agriculture — probably correctly, given land use strategies. The European Commission, at the end of 2005, presented a biomass action plan that aimed to double the use of bioenergy sources in the EU's energy mix by 2010. At the moment, approximately 4% of the EU's energy needs are met through biomass. The European action plan advances 31 measures to promote the use of biomass in heating, cooling, electricity production, transport etc. Germany, the UK and the Netherlands already have, or are currently preparing, national biomass action plans. The European Commission has long urged a rapid adoption of the EU plan by all states. The adoption of a national plan by our country should be a priority, even before the Government leaves office. It is coming up with legislation and plans as we head into the general election so it would be better to do this late rather than never.

This Government's record should make Deputies on that side of the House hang their heads in shame. It is more than a coincidence that in the week we were supposed to discuss this Bill, the Minister for Communications, Marine and Natural Resources underwent a Damascene conversion on the benefits of bio-fuels and proposed the introduction of a bio-fuels obligation. I studied his press release because I am not sure of his intentions.

See this speech in context