Dáil debates

Thursday, 27 January 2005

Priority Questions.

Renewable Energy Crops.

3:00 pm

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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Question 5: To ask the Minister for Agriculture and Food if he will make a statement on the potential of renewable energy crops within the context of the reformed Common Agricultural Policy. [2175/05]

4:00 pm

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)
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Promotion and development of renewable energy in Ireland are matters in the first instance for the Minister for Communications, Marine and Natural Resources. In so far as renewable energy crops are concerned, Council Regulation (EC) No. 1782/2003 establishing the single payment scheme introduced an aid of €45 per hectare per year for areas sown with energy crops. The aid is granted in respect of areas where production is covered by a contract between the farmer and a processor, except in the case of processing undertaken by the farmer on his holding. Agricultural raw materials, with the exception of sugar beet, may be grown under the energy crops scheme provided the crops are intended primarily for use in the production of products considered to be biofuels and for electric and thermal energy produced from biomass.

A maximum guaranteed area of 1,500,000 hectares for which aid for energy crops can be granted has been established in the European Union. According to figures provided by the EU Commission, in excess of 303,000 hectares was sown with energy crops in 2004, of which 439 hectares were Irish. From 1 January 2005, farmers may claim the energy crop payment in addition to their entitlement under the single farm payment. In addition to this scheme, set-aside land can be used for a variety of non-food uses, including growing of crops for energy purposes, and will therefore qualify to activate set-aside entitlements under the single payment scheme.

Biomass production from early forest thinnings and short-rotation forestry crops offer considerable scope for use in renewable heat and electrical energy production. In this regard, my Department, through the offices of the National Council for Forest Research and Development, is closely involved with the work of the bioenergy strategy group. The objective of this group is to examine the potential supply and use of wood biomass in meeting Ireland's renewable energy targets.

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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According to the EU directive governing this area, 2% of all transport fuel sold in the country must be biofuel by the end of the year. The ultimate target is 20%, to be achieved by 2020. Is the Minister satisfied that domestic production and processing of the relevant crops will meet that demand? The success of the initiatives producing rapeseed oil in Wexford proves that there is massive potential for farmers under the new dispensation resulting from the introduction of the single farm payment. Will the Minister clarify the position on the use of sugar beet? As he said in his reply, sugar beet does not qualify as an agricultural raw material for which the grant of €45 per hectare can be claimed. Given the current crisis in the sugar beet sector, particularly the closing of the processing plant in Carlow and the added cost accruing on sugar beet producers because of their having to transport their raw material to Mallow, will the Minister consider allocating a grant to those who are prepared to use their land to produce sugar beet or other crops to meet the target set for 2020?

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)
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My Department and the Department of Communications, Marine and Natural Resources are quite confident that we will reach the targets laid down by the European Union. It is a matter under consideration by the bioenergy strategy group, which involves both Departments, and the renewable energy development group, in which my Department is involved.

There are a number of pilot schemes in operation around the country. The forest services are providing for a pilot project involving 47 hectares of short-rotation willow coppice. There is a rapeseed oil project in Wexford and a similar project in Wicklow. Another project involves the use of biofuels by 17 vehicles used by Cork County Council. We are all aware that section 50 of the Finance Act 2004 provides a relief from excise on biofuels where the Minister is satisfied that any biofuel is essential to a pilot project designed to produce biofuel or test the technical viability of biofuels.

This matter is being considered in Brussels at present and we are awaiting a response, which will probably be available very soon. The pilot projects being carried out are very welcome.

We are all very concerned about the closure of the sugar factory in Carlow. A number of Wexford farmers are considering the possibility of utilising beet as an alternative energy source. Their work is at a very early stage but may result in possibilities. Bearing in mind the existence of the strategy groups and the pilot schemes, the Deputy can rest assured that the Department is fully involved and will keep a watching brief on the Department of Communications, Marine and Natural Resources to ensure that we obtain a supply of alternative energy from crop-growing.