Brendan Smith (Cavan-Monaghan, Fianna Fail)

As part of the reform of the EU sugar regime in 2006, a temporary restructuring scheme was introduced by the EU Commission with the aim of reducing EU sugar production in order to comply with WTO and other international obligations. The scheme provided an incentive for sugar processors to renounce sugar quota and dismantle the associated sugar processing plant and it provided compensation for affected stakeholders.

Greencore plc, the sole Irish sugar processor and holder of the entire Irish quota allocation, decided to avail of the restructuring scheme. Accordingly, the company renounced the quota and dismantled the last remaining Irish sugar factory at Mallow in compliance with the conditions of the scheme.

With regard to the potential of the sugar beet industry as a source of renewable energy, the Deputy may be aware that Cork County Council undertook a study to provide a factual evaluation of the viability of ethanol production from beet and wheat at the former sugar factory in Mallow. The results were published in September 2006. The study found that production of ethanol from beet and wheat is technically feasible at the Mallow site with the appropriate plant and equipment modifications and additions. Furthermore, an investor would need to consider capital investment of €55 million to €65 million for plant and modifications in addition to some €25 million to €30 million to purchase the site. By comparison, capital investment for a greenfield site would cost in the region of €100 million to €110 million, plus land purchase of €1 million to €2 million for agricultural zoned land or up to €15 million to €20 million for industrial zoned land.

Ethanol from beet or wheat in Mallow would require economic support to compete with petrol or imported ethanol. The support needed would be 26 cent for every litre produced compared to the full excise relief of 44 cent per litre available under the current excise relief schemes. Ethanol production in Mallow would employ some 50 people, which is less than 25% of the number employed during the sugar campaign. At full capacity the plant would require feedstock from 50,000 hectares. Ethanol would help overcome dependence on foreign energy, it burns cleaner than petrol and results in fewer emissions.

I understand that since decisions regarding the future use of the former sugar factory at Mallow were primarily a matter for the owners, anyone who expressed an interest in the possibility of utilising this factory for bioethanol production was advised to pursue the matter directly with Greencore.

There is no mechanism under the present regulations to allow for the re-instatment of the sugar quota for the growing of sugar beet in Ireland for the sugar industry. Any proposal to review the EU sugar quota regime would be a matter for the EU Commission in the first instance and any proposal to re-establish a sugar factory in Ireland would, subject to the availability of quota, be a matter for commercial decisions by interested parties. The Deputy will be aware that a quantity of sugar beet has always been grown in Ireland for fodder purposes and this continues. It is not affected by the EU sugar regime.

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