Eamon Ryan (Dublin South, Green Party)

In the interests of security of supply and the imperative to reduce green house gas emissions, the development of alternative transport fuels is of critical importance.

The 2009 renewable energy directive has set a 10% target for renewable energy in transport across all member states by 2020. In order for Ireland to deliver on that target the Government is committed to the sustainable development of the Irish bio-fuels market in line with overall EU bio-fuel policy criteria.

The introduction of the national bio-fuel obligation next year will underpin delivery of the national bio-fuel target and will take full account of EU bio-fuels legislation. Priority drafting of the required legislation is currently being finalised. The national bio-fuels obligation will also integrate the EU Commission's guidelines on the sustainability criteria as soon as these are finalised. Under the obligation fuel suppliers will be legally required to include an average of 4% bio-fuels in their overall annual fuel sales. The obligation will create a long-term guaranteed market of scale to allow the Irish bio-fuel industry certainty for the development of the sector. The obligation therefore will act as an incentive for bio-fuel producers.

The bio-fuels mineral oil tax relief schemes have already supported the development of indigenous production. The schemes have resulted in 18 projects being awarded excise relief from 2005. Since the excise relief schemes were introduced there has been a steady increase in bio-fuels used in Ireland, albeit from a very low base. Prior to the introduction of the schemes, market penetration of bio-fuels was almost non-existent. In 2007, penetration was 0.6% and in 2008 penetration had risen to 1.6%. I am advised that it will be in excess of 2% this year. There have been at least five bio-fuel plants constructed or redeveloped on foot of excise relief granted under the schemes. A number of others are either at an advanced stage of planning, or have received planning permission.

The introduction of the bio-fuel obligation in 2010 will, through the creation of a guaranteed market demand, provide the Irish bio-fuel sector with the certainty it needs to invest in new infrastructure. It will therefore underpin the development of economically sustainable production of bio-fuels in Ireland.

Additional information not given on the floor of the House.

The trading of certificates under the scheme, will also act as an incentive for Irish producers. For each litre of bio-fuel sold in the market a certificate will be issued by the National Oil Reserves Agency as the administrator of the scheme. Certificates will also be subject to verification by sellers to demonstrate that they meet the sustainability criteria. Bio-fuel obligation certificates may be traded among registered operators. I am confident tradability of these certificates will enable small indigenous producers, in particular, to enter the market and develop their businesses.

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