Joan Burton (Dublin West, Labour)
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Question 68: To ask the Minister for Communications, Marine and Natural Resources if he has reviewed the new EU strategy for biofuels which was presented on 8 February 2006; the progress which has been made on implementing the 2003 EU biofuels directive; and if he will make a statement on the matter. [6716/06]

Noel Dempsey (Meath, Fianna Fail)
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The communication on biofuels published on 8 February is part of the broader EU biomass action plan published in December 2005 and proposes a range of detailed policy measures to encourage biofuels and remove market barriers. I welcome this initiative by the Commission and my Department is examining the communication in conjunction with the Department of Agriculture and Food and the Department of Transport in the context of the policy debate on the overall biomass action plan.

The EC biofuels directive sets indicative targets to member states of 2% market penetration for biofuels by the end of 2005. Noting that we are starting from a very low current production base, we aim to meet the 2% target by 2008 through targeted fiscal measures designed to stimulate market development.

Under the 2005 scheme for mineral oil tax relief for biofuels, eight projects have been awarded excise relief, including four pure plant oil, three biodiesel or other biofuel and one bioethanol proposal. It is estimated that the pilot scheme will result in 16 million litres of biofuels being placed on the Irish transport market by next year.

Building on the success of the pilot biofuels scheme, I have agreed with the Minister for Finance a further targeted package of excise relief valued at €205 million, which was announced in the budget. The new excise relief programme, which is subject to state aid approval, will run to 2010 and will enable us to reach the initial target of 2% market penetration by biofuels by 2008. I am also providing funding towards the capital cost of developing biofuels processing facilities, which will critically underpin the excise relief package. Set in the context of EU developments, work is ongoing to put in place a policy framework for the development of the Irish biofuels market taking into account the perspectives of agriculture, transport and other relevant sectors.

Tommy Broughan (Dublin North East, Labour)
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I thank the Minister for his answer. In his reply to a recent question he said the total contribution of biofuels to the transport sector is approximately 0.00002%. Will it not be an incredible challenge to meet the 2% target over the next few years and an even greater challenge to meet the EU target of 5.75% by 2010? Has the Government not had a deplorable record in this area?

The EU strategy presented on 8 February to which the Minister referred includes seven policy axes, one of which refers to possible mandatory targets for member states. Is it the Government's intention to pursue a policy that includes mandatory targets? On the forthcoming European Council does the Government have any views on the common energy policy for Europe? The fiscal reliefs mentioned by the Minister are welcome and I commend him on taking that step. The United Kingdom Government has introduced a renewable transport biofuels obligation which will demand that 5% of all petrol sold in the UK is biofuel-based. Has the Minister considered such an obligation?

Approximately one year ago I asked the Minister if he would lead by example and ask the Taoiseach to change the Government fleet to greener and more biofuel-oriented vehicles. This was asked later by another party. It was announced around the time I asked the question that the UK Prime Minister, Mr. Blair, had made a similar request to his Government and no less than eight Ministers abandoned their Rovers and Jaguars for high-tech and greener alternatives. Does the Irish Government intend to give up the Saabs, Mercedes and Volvos, transfer to biofuel or electric alternatives and lead by example——

Bernard Durkan (Kildare North, Fine Gael)
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Hear, hear.

John Perry (Sligo-Leitrim, Fine Gael)
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A Jaguar.

Tommy Broughan (Dublin North East, Labour)
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——or, as is the case with so many other issues similar to the one I have raised, will the Government wait until this side of the House is in power and we show it what to do in this respect?

Noel Dempsey (Meath, Fianna Fail)
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When I was in Government with the Labour Party, I did not notice a rush away from the Mercedes.

Tommy Broughan (Dublin North East, Labour)
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This is a different Labour Party.

Noel Dempsey (Meath, Fianna Fail)
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The Deputy will be pleased to note when I was in the Department of the Environment, Heritage and Local Government, I made inquiries about a Toyota Prius hybrid car and was informed that the purchase of the cars for the ministerial fleet was a matter for the Garda Commissioner. I think we might have been restricted to EU cars. The Deputy will be pleased to know I have again requested a hybrid car and hope that by approximately April I will be driven in a Lexus hybrid.

Tommy Broughan (Dublin North East, Labour)
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I congratulate the Minister. I will have to save for one.

Noel Dempsey (Meath, Fianna Fail)
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The figure for penetration of biofuels by the end of 2005 was approximately 0.06%. This will increase to 0.13% by the end of this year and the initiatives announced in the budget will bring us to our target of 2% by 2008. Few member states, approximately ten, have identified targets of more than 2% for 2005. I am supportive of moving this up but we have to create the infrastructure. That is the design of the incentives introduced in the budget, to create the infrastructure and encourage the processing of biofuels and so on.

I am not enamoured of mandatory targets. This one-size-fits-all approach is taken in the EU in various areas and does not take factors such as the size of our market into account. We have the same approach in the energy market generally. I am not sure one can make mandatory targets that should apply across Europe.

Tommy Broughan (Dublin North East, Labour)
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One needs targets.

Noel Dempsey (Meath, Fianna Fail)
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I was about to say that. I agree with the Deputy that we should have firm targets and meet them. Although our EU targets in this area are not mandatory, the Commission is attempting to pursue us legally on that matter and we will resist that strongly.

Eamon Ryan (Dublin South, Green Party)
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I support the Minister. For many years we have been calling for the building up of infrastructure for our own oil industry. I welcome that. I would be keen to see an ethanol industry established from the closure of our sugar industry among other possibilities.

In the long run, from after 2010, once we have established a basic industry and raised our percentage to 2% to 5%, rather than providing simple tax reliefs or duty exemptions for biofuels, we should set up a percentage requirement that all fuels would have to have, be it mixed in or in the form of biodiesels etc. This would move the costs, which can be significant in terms of lost tax revenue, from the Government and the people to the oil companies and fuel consumers. We should signal this now. Does the Minister agree that in the long run we must switch to such a system? While he may not agree with mandatory targets on a European level, it makes sense for us to have a mandatory biofuel requirement because that saves the taxpayer money as well as doing the right thing environmentally.

Noel Dempsey (Meath, Fianna Fail)
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While I agree with the Deputy we first need to set up the infrastructure, create the demand, and afterwards explore the route he outlined. When I referred to mandatory targets I meant those that the Commission might set. I think we would follow the route he suggested and I anticipate that this could happen sooner rather than later.