Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

The feasibility studies were very professionally done. Both of them were presented to me and both of them involved detailed meetings around the presentation of those feasibility studies. We then asked officials in the economics section of my Department to assess the feasibility of the business plans. It is important to say, though, that in order for those business plans to be viable, the price of processed sugar must remain at a level that can pay for all of this because we are talking about a €200 million investment to build the plant before any sugar beet can be processed to produce either ethanol or sugar. It is probably fair to say, as a rule of thumb, that these feasibility studies stack up if the price of sugar remains at over €500 per tonne. It is well over that level at the moment and actually, in the last 12 months, it was close to €800 per tonne because there were real shortages of sugar in the European Union. A lot of food industries in Ireland, some from my own part of the country, were finding it hard to get sugar at any price, which suggests that there is an argument around sugar security for both the pharmaceutical and food industries. Having said that, a judgment has to be made by the investors and those putting the business plan together as to what the likely sugar price will be in three, five or ten years time and what the price will be if sugar quotas are abolished in the European Union.

When we were producing sugar in Ireland we were not particularly competitive vis-à-vis other parts of Europe in terms of the tonnage of beet per hectare we were growing and the sugar content. However, I believe we can be much more competitive now and the proof of that can be seen in the United Kingdom at the moment. The varieties of sugar beet being grown there are highly competitive with other parts of Europe and there is no reason Ireland could not benefit from that. We can be competitive in this area but whether this happens will be contingent on where world sugar prices go. In my view, they are not likely to collapse any time soon. Sugar is in strong demand because consumption will continue to grow, both in the European Union and, more important, further afield.

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