Pat Breen (Clare, Fine Gael)

I welcome the opportunity to speak on the Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010. The Bill amends the National Oil Reserves Agency Act 2007 in order to establish a bio-fuel obligation scheme with the result that 4% of transport fuels will comprise bio-fuels.

The Bill establishes a bio-fuel obligation scheme. Some 4% of transport fuels will come from renewable sources. The EU has set a target of 10% of transport energy from renewable sources by 2020. It is extremely important that the EU and Ireland have those targets and that Ireland sticks to them. As was said last night in Private Members' time, the country is over-reliant on imported fossil fuels to service its energy requirements. Most Members spoke about that over-reliance and the fact fossil fuels account for almost 96% of Ireland's primary energy mix. The fact we must import those fuels makes us very reliant on energy sources from elsewhere.

I acknowledge that some encouragement has been given to people to invest in bio-fuels through excise relief and tax incentives. There is much more scope in that area. Ireland is much more suited to developing second generation bio-fuels which use the entire plant or the waste part of the plant and, therefore, they do not compete with human food needs, which is extremely important. First generation bio-fuels are vegetable oils, animals fats, starch, etc. A small percentage of farmers in the agri-industry are already involved in the cultivation of elephant grass and willow.

The biggest challenge facing Irish farmers, who would like to diversify and set aside some of their land to grow willow, is getting their crops from the field to the marketplace, as there are very limited markets. Given the cost involved in trying to diversify and the way agriculture has gone, there is a huge burden on farmers who try to diversify to these second generation crops. The initial planting costs are very high. It costs approximately €2,600 to plant an acre of willow, although approximately 50% is grant-aided. In the case of willow, profit margins are comparable with other sectors, such as beef and dairy.

The development of willow is a three year cycle, so farmers can also face the same difficulties as many other businesses in the country. They must try to convince the banks to support them which is not very easy given the state of the banks and the fact they are very reluctant to lend to farmers or to any other sector in society because they do not want to take a risk. The farmer must wait for their product to grow. Credit in the banks has dried up, so that is a big issue.

In order to provide a bio-mass market, a local willow growers group, JHM, was established in west Limerick. It has been very innovative in this regard. It has developed miscanthus logs which are used in stoves. They have proved very popular. They are long-lasting, burn very slowly and are carbon negative, which is a very big seller in shops in my county.

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