Dáil debates

Tuesday, 13 February 2007

Private Members' Business

Biofuels (Blended Motor Fuels) Bill 2007: Second Stage

7:00 am

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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I move: "That the Bill be now read a Second Time."

I wish to share time with Deputies Olivia Mitchell, Connaughton and Hayes.

Our current use of energy is unsustainable. The oil era is coming to an end and we have not developed sustainable alternatives that can meet our energy needs in the next century. In 2003 the price of a barrel of oil stood at around $35. In 2006, it reached $70 and economists warn that the days of $100 per barrel of oil may not be far away.

Coupled with this price pressure, there are repercussions from Ireland's failure to meet its commitments under the Kyoto Agreement. Under the agreement, to which Ireland is a signatory, this country undertook to limit the increase of these emissions by 2008-12 to only 13% based on the level of emissions in 1990. The recently leaked EPA report revealed that Ireland has the highest level of CO2 emissions per head of population in the world which means we have reached a crisis in terms of the damage to our environment. The current Government has failed to treat this area as an urgent priority and it is time for new thinking and clear policies that will deliver.

The latest report, which is for 2005, is likely to show that the latest rise has been driven by a major increase in emissions from the transport sector, which grew by about 8%. This is significantly higher than the modest 2% rise for transport predicted in the Government's emissions trading report of last March.

This Bill proposes a mandatory bio-fuel component for all motor fuels. Our proposal would force fuel distributors to include a 5% bio-fuel mix in all petrol and diesel. This would not cost motorists as it would not require car engine modification. It would be mandatory that both petrol and diesel, used as vehicle fuel, be blended with ethanol and rape seed oil respectively. The transport sector has been identified as one of the largest offenders in terms of greenhouse gas emissions.

Another benefit is that blending motor vehicle fuels with bio-fuels would kick-start the process of reducing our dependency on oil. Our blending proposals would tackle our unacceptably high level of carbon emissions and create a viable alternative enterprise for farmers. This would help Ireland meet its Kyoto targets and reduce environmental emissions from the transport sector. It would also stimulate a market for farmers to produce bio-fuel crops and make Ireland more self-sufficient in meeting future energy needs. This Bill would give the bio-fuel industry the kick-start it so badly needs to become a viable, developing industry with the capacity to provide a long-term alternative to oil.

The Fianna Fáil-Progressive Democrats Government has consistently failed to develop a comprehensive policy on the development and promotion of bio-fuel. It has done little more than tinker. We have heard much talk from the current Government but have seen very little action on climate change. As my party's spokesperson on agriculture, I have consistently urged the Minister for Agriculture and Food, Deputy Coughlan, to stop stalling on this issue and persuade the Minister for Finance that we must kick-start mandatory blending and give wider support to rural communities to develop alternative energy generating projects. Rural communities and farmers are positively disposed to playing their part in tackling Ireland's energy crisis and in producing cleaner, greener energy. All that is missing is the Government's commitment to addressing this growing crisis.

There is no point encouraging farmers to grow renewable energy or bio-fuel crops, as the Minister for Agriculture and Food and the Government pretend to be committed to, when there is no market for them. The policy vacuum at the heart of the Fianna Fáil-Progressive Democrats Government is exposed by its failures in this area. There are no plans to legislate to ensure blended bio-fuels replace petrol and diesel, no proposals for the extension of the removal of excise duty on bio-fuels, no plans to open a public competition for capital start-up grants for bio-fuel processing plants, no plans to require public transport and other public service vehicles to convert to bio-fuels where feasible and no proposals to make a major capital allocation to bio-fuels instead of wasting money buying carbon credits.

There is significant support for bio-fuels throughout Europe. Commercial fuel is subject to mandatory blending of bio-fuel in Austria. Germany produces one third of bio-fuels in the EU. Ireland has stuck its head in the sand and has done nothing to introduce bio-fuels.

Yesterday's announcement by the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, showed a belated recognition by this Government of the importance of bio-fuels, which Fine Gael has highlighted repeatedly. The Minister did not propose any legislation, nor did he make it mandatory to produce bio-fuels, displaying a major lack of commitment to the future of our energy supply.

Similarly, the energy crop scheme announced by the Minister for Agriculture and Food last week has many weaknesses, most notably the exclusion of REPS farmers from the scheme and the exclusion of lands in receipt of disadvantaged area payments. Under the Minister's proposals for a new bio-energy scheme, farmers will receive grants to establish miscanthus and willow. However, if in receipt of this grant, they will not be able to draw down their REPS payments or their disadvantaged area payment on lands used to produce bio-mass crops. This could amount to a reduction of €12,000 on 100 acres used for renewable energy crops. It seems incredible that a scheme supposed to protect and promote the environment is excluding farmers from producing bio-fuels that could have a very positive effect on Ireland meeting its Kyoto targets. There is a clear conflict between the grants of which farmers can avail, cancelling any incentive for farmers to engage in bio-fuel production.

The structure of the scheme puts farmers in poorer parts of the country, especially in the BMW region, at a disadvantage. These farmers receive an acreage payment know as the disadvantaged compensatory allowance. However, under the Minister's proposals, farmers cannot collect this payment while participating in the new scheme. Growing miscanthus and willow is the only way forward despite a ready market. Unfortunately, farmers in poorer parts of the country who could provide willow and miscanthus will not be able to take advantage of it because of the major structural disadvantage. One arm of the State is contradicting the other arm of the State.

Consumers pay a levy on electricity bills to support Bord na Móna for its peat production. Peat cannot compete with oil and coal so this levy makes up the shortfall. It is a commendable proposal because it supports an indigenous energy source. It is vital to extend it to other indigenous energy sources, such as renewable energy crops. However, renewable energy crops are now at a disadvantage as they are not receiving the support available to peat producers.

The Government has a track record of facilitating and supporting the production of bio-fuels outside the country and foreign imports. The Minister for Communications, Marine and Natural Resources granted relief on excise duty to two companies, namely, the Goodman group and One51. Neither company intends to produce here. The Goodman group has a site in Pembrokeshire in the UK, and One51 also intends to import bio-fuel. Under the current scheme some 90% of bio-fuel will be imported. Those who made an investment and supported the development of a micro industry have had support withdrawn. This was done in favour of major players importing bio-fuels. Government policy serves only to support countries cutting down rainforests to generate renewable fuels. This will not benefit the environment in the medium or long term and will certainly not benefit the development of an industry in Ireland or support Irish agriculture. It is difficult for European companies to justify investing in renewable energy products in Ireland rather than in better supported neighbouring countries in the European Union, or even in the United States.

Fine Gael's blending proposal is a "no-brainer". There is nothing to prevent the establishment of a blending regime here. The proposal represents a win-win situation for our environment and our farming community. Moving to bio-fuels in the wake of the sugar beet industry wipe-out will give farmers new markets, new opportunities and allow Ireland to live up to its responsibilities to its people and to the planet. The Government must not continue the actions it took to wipe out the sugar industry and prevent the creation of a renewable energy sector in its place. It chose to ensure that Greencore would develop the sugar factory sites in Carlow and Mallow for residential and other purposes, rather than use the closure of the industry to kick-start the bio-fuel industry. Ireland's production of bio-fuels remains low by European standards and it is playing catch-up. Many farmers, however, will not change over to bio-fuel production unless they are confident there is a market for their product and that it has a long-term future.

It is hypocritical of the Government to give farmers less than one month in which to decide whether to avail of the scheme that the Minister for Communications, Marine and Natural Resources announced last week. The Government knows that without a market in place and leaving such a small window of opportunity for farmers to avail of the scheme is a political ploy to wrap the green flag around itself before the general election to say it is as green as any other party.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Greener.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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This Government is trying to pull the wool over people's eyes on this issue. Fine Gael has solid proposals that will stimulate a market for farmers and encourage consumers to make the switch to bio-fuels, while reassuring farmers of the future security of the industry. We call on the Government to create a market for bio-fuels by legislating to provide that all motor fuels must include a blend of fuel from renewable sources. Such legislation will mandate that all petrol sold at filling stations will include a 5% bio-ethanol mix and all diesels will contain a 5% bio-diesel mix. It should remove all excise duty on bio-fuels produced from renewable energy crops and provide establishment grants for producer groups that would consist of up to 50% of the costs of setting up the group, subject to a maximum of €300,000 per group, in order that farmers can benefit directly from market returns.

There is little point in establishing a market unless we ensure that farmers get a share of the profits out of that manufacturing process which is not the case in many other areas of agriculture today. I urge Members to support Fine Gael's Bill. Climate change is a major global problem facing all of us. Global meltdown is a reality and urgent action is required. Developing practical and feasible solutions to climate change presents a serious challenge to all policy-makers and legislators. Tackling climate change is so important, so vital and urgent that it must go beyond petty political squabbling.

I urge Members and the Minister to think globally, act locally. Fine Gael's proposal is a step in the right direction. It is a straightforward measure that can have an immediate significant impact. I am not aware of any reason fuel blending cannot be introduced here. If the Government has any concerns over the working of this proposal, my party colleagues and I are more than willing to sit down and iron them out, after tonight, on Committee Stage. Tonight it is vital to accept the broad principle of this Bill. The Government can act now, support this Bill and kick-start the cleaning and greening of our environment.

I hope the Minister does not respond by saying that his statement yesterday is one of intent because the Government parties have had ten years to deal with this issue. They have had the past three years to deal with the fall-out from the closure of the sugar industry and have done nothing about that. The Government can allow political rivalries to kill this worthwhile proposal and wait until the EU forces Ireland to act on the issue. Stalling in the face of irreversible climate change and environmental pollution is no longer an option. I urge the Minister and his colleagues to accept the principle of the Bill. I commend the Bill to the House.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
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The policy in this Bill is not new because Fine Gael published it last April but it is apposite to discuss it in the aftermath of the figures announced last week by the UN committee on climate change. Those figures proved that the time has come for Ireland to take its head out of the sand on climate change and accept personal and national responsibility for what it has contributed to climate change, and to mend that for the future. It is time for us to take seriously all the issue surrounding climate change.

On this Government's watch Ireland has lost all right to promote itself as a green and clean land. Our CO2 emissions per head are the highest in the world. We have lost all moral standing and authority when it comes to the environment and the future of the planet. We can begin again, if not to reduce emissions, to reduce the growth in them but this is a monumental task. The challenge is not just to reduce emissions but to do so without damaging growth in the economy but encouraging and sustaining it.

The failure to tackle any of the parameters on energy use has made this a difficult task. Energy production is highly inefficient and totally dependent on carbon fuels, 90% of which must be imported. The Government has stood by and watched wasteful and inefficient production. It has also ignored consumption. Last year we built 80,000 new homes, and over the past ten years close to 500,000 new homes, but no attempt was made to increase their insulation standard or to maximise the use of renewable or improved heating fuels. Short-term commercial interests were put before those of purchasers or of the planet.

Our transport emissions have made the greatest contribution to greenhouse gases in recent years. This is caused by growth not only in numbers of cars but in congestion, an almost entirely urban phenomenon that the Government has ignored. We must look in turn for the greatest reductions from this sector. This requires a focused and forensic consideration of how to set about the task which will be painful and challenging. If the economy is to grow and if we are to improve our quality of life and sustain living standards we must improve and increase, not reduce, mobility. That is the challenge.

Being an island Ireland needs a strong aviation sector and cannot consider major carbon taxes to prevent planes flying in and out of the country. We need this sector to get our goods to market and to sustain our transport industry. We could, however, consider the foods we import. There is no reason to bring sugar snap beans from South Africa. We can live without them and grow cabbage instead. Spinach jumps out of the ground here.

Rail freight has become almost extinct, simply because CIE says it is uneconomic. The Government does not seem to have a view but it must take the long and broad view of rail freight and consider the external factors that exist for this versus road haulage. There are major costs in road haulage that are not considered when CIE decides that rail freight is uneconomic and cannot be sustained. It may be that rail freight is not appropriate for all goods. I accept that. Rail cannot achieve the kind of penetration enjoyed by road haulage. However, we cannot ignore the fact that the latter industry is responsible for huge emissions. At the very minimum we must consider stopping the destruction of rail infrastructure and the selling off of existing rolling stock.

When it comes to road transport, there is no denying the car. The population outside Dublin is extremely dispersed and people will always depend on cars. It is crucial, therefore, that we begin to concentrate on ensuring that we can decouple their mobility from CO2 emissions. Mobility is crucial to quality of life and we must ensure the people retain the latter.

The use of bio-fuels, which the Bill proposes, is clearly the way to proceed. Engine improvements and modifications will come in time. What we can do now, without inconveniencing anyone, making any effort or introducing carbon taxes, is demand, as Fine Gael suggests, the introduction of a 5% bio-mix for petrol and a 2% mix for diesel. The Bill is not prescriptive in this regard. Overnight, what we are suggesting would lead to a 5% reduction in fossil fuel use, make us less dependent on volatile and insecure oil supplies, reduce our CO2 emissions and kick-start home production of bio-fuels by creating a guaranteed market. In short and as my colleague stated, it is "no-brainer". I am delighted the Minister, although late in the day, is of the same view.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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He has undergone a late conversion.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
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When coupled with the abolition of excise tax on the bio-fuel element, which is also proposed by Fine Gael, the transition to a more sustainable fuel will be painless for the consumer. The Minister for Finance might be interested to hear that in other countries where this has happened, the tax advantage has become unnecessary. This is because petrol supplies will diminish and become more expensive and bio-fuel will become established internationally.

What is important is to encourage public enthusiasm for the change. Carbon taxes may become essential in the future to limit the use of fossil fuels. Before we go down that road, however, we must first exploit all the potential incentives to change behaviour and encourage a move away from fossil fuel.

The Bill deliberately avoids prescribing a fixed percentage of bio-fuel blending. Initially, we anticipate the 5% bio-ethanol mix for petrol because this would require no change to the average car. Over time, however, it will rest with the Minister to increase this quantity in line perhaps with EU requirements, the development of the European and Irish markets for bio-fuel production and improvements in car technology. I hope the recent announcement by the Commission of recommendations on average car emissions will drive the development of the industry.

There are always gainsayers who oppose every suggested change from our old ways. For example, it has been stated that the capacity to produce bio-fuel in the quantities required for higher levels of blending just does not exist in Ireland or even, perhaps, in Europe. That may be the case in light of current technology. However, the position will change. Even if the capacity does not exist, it would be better to import bio-fuel that to import oil. I ignore the gainsayers who state that we cannot make changes of this kind.

There is huge public enthusiasm to limit our wasteful use of resources and to make the switch to using renewable energy sources. Improvements in our recycling rates came about simply as a result of providing people with facilities at which to recycle. The position is similar with Luas, which has been extremely successful and to which I am a convert. It is a myth that people love their cars. If they are given the opportunity to commute on a reliable and frequent public transport service, they will grab it. Luas is one example of this, as is Aircoach. If one offers members of the public frequency and convenience, they are quite willing to leave their cars at home.

Without doubt, the single biggest way to reduce CO2 emissions is to get the members of the commuting public in our cities out of their cars and on to public transport. At the same time, this would help reduce congestion. Rail-based solutions will come about in time but action is needed now. The only immediate action we can take in respect of public transport is to provide buses. Fine Gael strongly believes a competitive market best serves the public's interest. We are committed to increasing the choice available to the public by encouraging private sector interests to tender for new and existing routes in our cities. It is only with frequent and reliable services that we will tempt members of the public out of their cars. The emissions reduction brought about by people switching from cars to buses is enormous. An average bus carrying 60 people offers a scenario that is 12 times cleaner than one in which those 60 people drove their cars instead. Again, it is "no-brainer".

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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I congratulate Deputy Naughten on introducing the Bill, which makes great sense on four or five different fronts. We are not discussing anything that has not been mentioned in the House on several occasions during the past two years. The problem previously was that the Government was not listening. Some of the efforts it has made, however welcome, are not good enough to tilt the balance to encourage people to do what they should do in so far as the environment is concerned.

If this debate was taking place in the context of a barrel of oil being priced at $90, people's reaction would be amazing. If it were taking place in the context that there would never be a shortage of diesel or petrol, it would be difficult to encourage people to speak about the most important aspect of this matter, namely, a cleaner environment. This comes down to people's psychological make-up.

As Deputy Olivia Mitchell stated and in so far as the transport element is concerned, recent figures from the car manufacturers show that by 2018 or 2019 the number of cars on our roads will have doubled. Imagine the queues with which we will be faced unless there is a huge sea change in our attitudes in respect of all the actions that must be taken.

I wish to comment upon a matter in respect of which the Government has been lacking and to which the Minister has referred on several occasions in the context of the various incentives that have been introduced to encourage people to grow alternative crops. It does not make a goddamn bit of difference what one gives them if members of the farming community have, for very good reasons, decided not to catch on. The reason they have not caught on is that they do not believe the Government has thought matters through and because they are of the view that when the crops have been grown, there will be no one to whom they can be sold.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That is correct.

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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It must be recognised that there are no guaranteed outlets.

There are 9 million acres of relatively good land here. On foot of European Union constraints and restraints of every description, our national herd is declining, there are fewer sheep and cattle and less tillage. As a result, a great deal of land is lying idle. The best land in the entire country has been set aside. In recent months, the Minister decided to provide X amount of money per hectare to encourage people to grow the relevant alternative crops. He is now wondering why farmers decided not to grow more of these crops than has proven to be the case. As Deputy Naughten stated, the Minister gave them a month or two to decide whether to opt to grow these crops. The Minister is here long enough to know that no group in society will make an overnight switch regarding something in respect of which no research was carried out. Years ago the Agricultural Research Institute did research into any proposed actions by farmers and tried them out in practice to ensure they would work at farm level.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That is right.

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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Some research is being done at Oak Park and a number of other locations but it is only beginning. If the Minister pays the piper, the tune will be called.

When 2,500 eminent scientists throughout the world say we have a problem with climate change, we must take it seriously. If it turns out that, because of the way the Government decided to kick-start this process and encourage the growing of alternative crops, it got out of hand, there would be no problem putting a ceiling on it through taxation but the Minister did not provide for such a position. The proposal before the House is simple and doable, and I believe the public will react favourably to it. There is no magic in the concept of blending. We would have the biofuels suitable to do this provided we convince farmers to grow the crops.

Another aspect worth mentioning is the proposed removal of excise duty on biofuel. Many young people tell me they want to build their houses and use the wood pellet system to heat them. I tell them they will have no trouble getting the grant to put in the burner, which was a good move by the Government, but I then ask them from where they will get the wood pellets because wood pellets for a house in Ballinasloe might have to come from County Tyrone, Kildare or elsewhere. If someone's fire has gone out and they are waiting on the supplier to cross the country with a supply of wood pellets, they can be assured they would have a great deal of trouble in that regard.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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They would have to go for kindling wood.

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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That whole area has not been thought out. I made representations recently for two people who are getting involved in the manufacture of wood pellets and discovered there is very little capital for it. I will give way to Deputy Hayes.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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I commend my Fine Gael colleagues for bringing this Bill before the House. Climate change is a major problem facing the world but we have not been serious about addressing it. The recent rise in the cost of crude oil, petrol and diesel on the world market and increased costs here brought home to many people the real difficulties facing them on a daily basis in that regard. It stemmed the debate on the potential of biofuel, the cost and so on but the closure of the sugar beet industry late last year reignited the debate and brought home to many people, particularly those living in rural areas who are dependent on the land, the changes taking place and the whole issue of alternative farming. There is a real lack of leadership in that regard. Deputy Connaughton touched on that aspect when he spoke about the lack of research in this area.

There is a crying need among farmers, be they big or small, to stay on the land and make a living on it. The potential for growing alternative crops that could produce energy was never more wanting. I have never had as many people coming to clinics or meetings inquiring about the possibility of growing alternative crops. However, when a farmer tries to size up the possibility of growing some of those crops, the obstacles one can come across are amazing. For example, people involved in the rural environment protection scheme cannot grow alternative crops while claiming the REPS grant. It is a disgrace that people who went out of their way to get involved in a rural environment protection scheme and have been compliant with it cannot use some of their land to grow alternative crops. That is one example I can give the Minister. There are many other examples of issues that are prohibiting people from getting involved in the growing of alternative crops.

The Government is keeping this issue at bay. People have a decision to make about their future but it is also about the future of rural Ireland and the alternatives that could be available in rural Ireland. A sea change is happening in agriculture and there is potential for an alternative industry, but we are not grappling with it or offering people the alternative they deserve.

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

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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Deputy O'Flynn can shake his head but that is the reality.

Photo of Noel O'FlynnNoel O'Flynn (Cork North Central, Fianna Fail)
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Major progress has been made.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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The Deputy should stop in my constituency on his way to Dublin or any part of his own constituency and he will meet people who are at a loss to know how to progress this issue.

I urge the Minister to re-examine this area. He is not giving leadership. There is potential in this area. The world needs it, our country needs it and generations after us need alternatives. We must stand back and look at the type of environment we are passing on to future generations.

I urge the Minister to examine our proposals. They are well thought out and genuine. The Deputies involved, particularly Deputies Naughten, Durkan and many others, have put hours of research into this Bill. For the sake of the country and rural Ireland, I ask the Minister to give serious consideration to the proposals before him.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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I wish to share time with the Minister of State, Deputy Parlon, and Deputy O'Flynn.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Is that agreed? Agreed.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Come home to Parlon country.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The heavies have to come from some side because I have not heard any of them yet.

I am delighted to have the opportunity to inform Deputies once again of the extensive and effective range of policies the Government has introduced to support renewable and sustainable energy in Ireland and in particular to outline current and future initiatives in bio-fuels. I am disappointed that Fine Gael has chosen to introduce a Bill which, however well-meaning, cannot be supported by Government for the simple reason that it would contravene EU law.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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What about the Austrians? Does a different EU law apply to them?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Despite the long hours of research allegedly undertaken——

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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What about the sugarbeet industry?

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Allow the Minister without interruption.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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——by Opposition Deputies, this fundamental information seems to have escaped them.

Last May, the Fine Gael Party introduced a private Members' motion on renewable energy and, in particular, bio-fuels. Despite a lengthy debate in the House, I am disturbed to see Fine Gael's thinking on bio-fuels has not progressed in any meaningful way since then.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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It has progressed much more than the Government's thinking on the matter.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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If anything it has become even less clear and demonstrates——

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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At least we are in the arena.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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——an astonishing lack of understanding of the legal and policy framework in which the bio-fuels market is developing.

In October 2006, I published the Green Paper, Towards a Sustainable Energy Future for Ireland, outlining options for the development of the bio-fuels market. If Fine Gael had taken time to read the Green Paper, it would have noted the clear and unambiguous position on bio-fuel mandates.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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We read it and it was not unambiguous.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Perhaps in the hours of research Deputy Durkan undertook, he should have read the Green Paper.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I read the Green Paper. The Government read our proposals before it published it.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Deputy Durkan, allow the Minister without interruption.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The Green Paper states "It should be noted that mandates — where fuel suppliers are required to produce a percentage of bio-fuel in each litre of fuel sold — are not currently permitted under EU law". Should the Opposition be in any doubt, the public consultation document on the bio-fuels directive, published by the EU Commission in April 2006 notes that bio-fuels obligations and excise relief programmes are the chosen bio-fuel policy instruments of many member states. On the question of a mandate in the form proposed by the Fine Gael Party, the Commission stated:

A third approach would be to require each litre of petrol or diesel sold to contain a given proportion of bio-fuel. This mandate system has been used in Brazil and elsewhere. In Europe, however, it would contravene the EU fuel quality directive as presently drafted. In addition, without EU wide harmonisation of the minimum proportion per litre, such an obligation would constitute a serious internal market barrier.

Fine Gael Members probably only read the first sentence.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Minister is sheltering behind a wall of bureaucracy.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Notwithstanding the rhetoric and empty promises in Fine Gael's press release on bio-fuels and this Bill, the party simply ignores the legal reality around the question of mandates.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The sugarbeet industry disappeared because of bureaucracy and compliance with EU law.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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As I pointed out last May, Fine Gael's proposals are less ambitious than those proposals outlined by the Government. I am surprised by the Opposition's lack of foresight and simple research on this issue.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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The Government has not delivered anything.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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In contrast, the Government has taken a clear and ambitious approach to the development of a bio-fuels market.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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It is as clear as slurry.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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On Monday, I announced the Government will introduce a bio-fuels obligation to ensure bio-fuels represent 5.75% of Ireland's transport fuel market by 2009 and 10% by 2020. If Fine Gael had read the Green Paper, it would have seen these targets.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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They were only announced yesterday.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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We wondered why it was announced yesterday.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The Deputies should read the Green Paper. Unlike the mandate system proposed by Fine Gael, the bio-fuels obligation will require fuel supply companies to ensure bio-fuels represent certain percentages of their fuel sales on an annual basis. By 2009 this will be 5.75%.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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They will import the bio-fuels.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Companies will have to account for their fuel mix on an annual basis and if they do not reach the obligated limit, they will have to pay a fixed amount penalty per litre for the amount of the target not achieved.

The obligation will allow Ireland to achieve the EU bio-fuels directive target a year in advance of the 2010 deadline. The establishment of a further target for 2020 is in line with EU thinking on bio-fuels policy. Critically, it provides long-term market certainty that will allow market players to develop economically viable scales into their projects.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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It will defeat the whole purpose of having our own bio-fuels industry.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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This in turn will assist industry and the farming sector in developing appropriate financing, planting, refining, storage, distribution and supply chain logistics.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Minister knows much about the farming sector.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Deputy Durkan will allow the Minister without interruption.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Member states across Europe are increasingly opting for bio-fuels obligations as the preferred policy route. Nine other member states have now signalled their intention to introduce bio-fuels obligations, including the UK, Germany, France, Poland, the Czech Republic, the Netherlands, Slovenia, Austria and Finland. The Government is not aware of any member state that has proposed a mandate system as proposed by Fine Gael, because they know it would be illegal.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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We know that supporting one's own industry starts at home.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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When the Deputy is in a hole, he should stop digging.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Minister has been in one long enough and he has not stopped.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Ireland's bio-fuels obligation will be introduced in 2009 and I intend to embark on extensive consultations with relevant sectors over the coming months about its implementation. The details of the measure must be carefully drafted to maximise the benefit to the economy and the environment. The public consultation will, therefore, include discussions with the traditional fuel and emerging bio-fuel sectors, as well as discussions with the farming and waste-processing sectors.

The introduction of the bio-fuels obligation is one of the principal decisions of the seven Ministers who participated in the ministerial bio-energy task force, which I established in July 2006. It is the culmination of several months of discussion and analysis and is part of the Government's approach to the development of the bio-energy sector. It was also signalled strongly in the Green Paper on energy and I intend to publish the report of the White Paper over the coming weeks.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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In preparation for the election. Doomsday.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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These reports will set targets to 2020 for renewable energy in the heat, transport and electricity sectors and will provide a roadmap for future policy development.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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The Minister should not refer to roads and targets.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The introduction of the obligation follows the successful roll-out of two bio-fuels mineral oil tax relief schemes in 2005 and 2006.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Both of which are oversubscribed.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Under these schemes, almost €220 million in excise relief is being provided over six years for a range of bio-fuel projects. The projects range in size and structure and include bio-diesel, bio-ethanol and pure plant oil projects.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That is supporting foreign industry.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Eight projects were successful in the first scheme, and 16 were selected under the second scheme. Significant volumes of bio-fuels are already coming on stream in the fuel market. For example, ConocoPhillips at the Whitegate refinery, has already commenced distribution of bio-fuel complying with the diesel standard. Diesel pumps throughout Munster are selling diesel, a percentage of which has been made from vegetable oils.

Another successful applicant under both schemes is selling petrol containing 5% ethanol at 85 service stations, and selling ethanol in blends of 85% in 13 service stations. Flexi-fuel vehicles can use the 85% blend of ethanol in petrol. High blends of bioethanol, offer significant potential in terms of CO2 reductions and greater market penetration.

Recognising this, the Government introduced a 50% reduction on vehicle registration tax for flexi-fuel vehicles in the 2006 Finance Act. Two leading car manufacturers have already introduced these vehicles in the market and 200 flexi-fuel vehicles have been purchased to date. In addition, some 1,500 vehicles have been purchased under the 50% VRT relief scheme available for hybrid electric vehicles. The Government is now embarking on a review of VRT to link tax rates with CO2 emissions. This is further evidence of the integrated approach being taken by Government on sustainable energy policy.

Bio-fuels offer significant potential for rural development and I have been working closely with the Minister for Agriculture and Food to ensure the appropriate measures are in place to support the farming sector in participating in the emerging bio-fuels market. In the budget, the Minister for Finance announced three critical agriculture measures which complement the renewable energy measures being implemented by the Department of the Environment, Heritage and Local Government. Of particular relevance to the bio-fuels sector is the introduction of a top-up of €80 per hectare on the current energy crop payment. This will bring the payment to €125 per hectare and offers a significant incentive to farmers to grow energy crops. Further incentives are being offered to assist farmers to grow and harvest energy crops for the renewable heat and electricity markets.

It would have been helpful if Deputy Naughten had done some research before making claims in regard to REPS. I note that the Minister for Agriculture and Food, Deputy Coughlan, today confirmed that REPS farmers are not excluded from the new bio-energy scheme for willow and miscanthus——

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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Farmers are not paid on the basis of the acreage on which the crop is grown. Perhaps the Minister should read the proposals before he makes statements about them.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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——under which an establishment grant and annual premium are paid.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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The Minister has come into the Chamber and tried to twist the facts.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Deputy Naughten should allow the Minister to continue.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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This scheme was announced last week. Fine Gael, without doing its research on the issue, ran with a newspaper article which claimed that REPS farmers were excluded from the scheme.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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They are excluded. Those receiving disadvantaged area payments are also excluded.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The Minister, Deputy Coughlan, confirmed that farmers participating in REPS can obtain the energy crop premium and the establishment grants for areas planted with either willow or miscanthus. The remainder of the land continues to be eligible for REPS payment. The Minister is reviewing the overall position in the context of preparations for the introduction of REPS 4. The new REP scheme is part of the rural development programme 2007-13 which is currently with the European Commission for approval.

The development of Ireland's bio-fuels sector is part of a comprehensive strategy to increase deployment of renewable energy across the three energy sectors — transport, heat and electricity. In the last two years alone, I have announced a range of support programmes for these sectors. The greener homes domestic renewable heat grants programme provides grants for householders for the purpose of installing renewable heating, including wood biomass boilers and stoves, solar panels and heat pumps. The overall funding available for this scheme over the five-year period to 2010 is now €47 million, which includes the additional €20 million I secured in budget 2007. Grants of up to €6,500 are available to members of the public under this programme.

The scheme has been hugely successful, with almost 13,000 applications received since it was launched last March. Irish people have strongly embraced the renewable energy imperative and are keen to play their part in creating a cleaner environment. The Government is supporting this public enthusiasm through a targeted grants package that allows householders access to cheaper and cleaner energy.

The bioheat grants programme provides grants for commercial scale wood biomass boilers aimed at the business and services sectors. Almost 100 applications have already been received for grant aid under this scheme. A sum of €22 million was originally made available for this scheme to 2010. In budget 2007, a further €4 million was added to the programme. In response to early feedback from the public, we are now expanding this programme to allow community and voluntary groups, schools and other public entities to avail of the grants and to include solar and other renewable technologies.

The €11 million combined heat and power, CHP, grants programme provides funding for the commercial sector to switch to more efficient electricity and heat generation. Eighteen applications for funding have been received since this programme was launched in July, and a call for proposals for biomass CHP will take place in coming months. In June 2006, I launched the Renewable Energy Feed in Tariff, REFIT, which provides a fixed feed-in-tariff for renewable electricity over a 15-year period. This programme will see Ireland achieve a target of 15% of electricity consumed from renewable sources by 2010.

The two excise relief programmes for bio-fuels, which I outlined earlier, are costing in the region of €220 million in excise foregone——

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Those programmes are oversubscribed and must be expanded.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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——and are positioning Irish market players to participate in the longer-term market that we are creating through the implementation of a bio-fuels obligation.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Several home producers of pure plant oil are awaiting approval.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Deputy Durkan should allow the Minister to continue.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The overall new investment being facilitated by the Government amounts to more than €400 million and is a clear indication of its commitment to the development of a vibrant renewable energy sector in Ireland.

In tandem with our initiatives to support renewable energy deployment, the Government is encouraging consumers to think about energy usage. Deputies are undoubtedly familiar with my Department's Power of One campaign, which was launched last year and will continue into the future.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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It is a good campaign.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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It has been hugely successful to date. The dedicated website has been visited by more than 35,000 people, and 25,000 information packs have already been despatched from our mailing centre. We will shortly extend that campaign into a Power of One Street campaign.

The Government has clearly had significant success to date in the area of bio-fuels. While I appreciate Fine Gael's intention in introducing this Bill to the House, its provisions cannot be introduced without incurring a serious breach of EU legislation. I urge the Opposition not to support this Bill but to participate in the forthcoming debate on the structure and roll-out of the bio-fuels obligation which I announced on Monday——

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The time for talking is over; we must take action.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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——with a view to providing a carefully considered measure that is in line with EU policies, is legal and delivers tangible benefits for the environment, rural communities and for an emerging and vibrant Irish bio-fuels sector.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Minister has been receiving telephone calls with queries about his whereabouts.

8:00 am

Tom Parlon (Minister of State, Department of Finance; Laois-Offaly, Progressive Democrats)
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I am pleased to address the House on this Bill. The development of a bio-fuels market is important from several perspectives. From an energy perspective, bio-fuels offer one of the few options available to governments to reduce harmful greenhouse gas emissions in the transport sector.

Unlike the heat and electricity sectors, the transport sector in Ireland has been growing exponentially in recent years. Final energy use in this sector grew by 151% in the 15-year period between 1990 and 2005, and road transport accounts for 65% of fuel consumption in the sector. The Government is fully aware of the need to reduce emissions from this growing sector and has taken a series of important steps towards replacing polluting fossil fuels with more sustainable renewable fuels. The bio-fuels obligation announced by the Minister, Deputy Noel Dempsey, will have the effect of taking the equivalent of 200,000 cars off the road. This is more than the number of new cars registered in 2006.

The bio-fuels obligation also provides a long-term framework, to 2020, for the development of a bio-fuels sector and will allow Ireland to reduce its dependence on imported fuels. Ireland currently imports more than 99% of its transport fuels. Two thirds of these are imported fully refined and a further one third are refined at the Whitegate facility in Cork. It is clear, therefore, that the new bio-fuels strategy will not only contribute to our environmental objectives but will also lessen our dependence on imported fuels.

The bio-fuels obligation, coupled with the projects that are already emerging from the Government's bio-fuels excise relief programmes, also offers significant potential for rural development and the farming community. It is estimated that 75,000 hectares of land would be required to support 2% market penetration of bio-fuels, if those bio-fuels were to be produced from energy crops alone. Obviously, waste products such as recovered vegetable oil and tallow will be part of the overall mix in our bio-fuels sector, but waste supplies are limited and there is enormous potential for the farming community arising from a 5.75% target by 2010 and a 10% target by 2020.

In formulating its renewable energy strategies, the Government has been constantly mindful of the opportunities which renewable energy presents in terms of rural development. The benefit is three-fold because it also replaces imported energy and contributes to environmental objectives. Recognising the potential role of the farming and forestry sector in renewable energy generation, the Government has already introduced a range of initiatives.

The €26 million bioheat programme provides a new and growing market for wood chip products. Through this programme and the €47 million greener homes programme, we are developing a new market for wood energy products. The Green Paper on energy policy estimates that renewable biomass heating will account for 5% of Ireland's heating needs within three years. The establishment of targets for the renewable heat sector, ahead of any EU initiative in this area, is a welcome move for Ireland and for biomass producers in Ireland.

To encourage farmers and foresters to take advantage of the new demand for renewable heat products, which has been created through these programmes, the Minister for Agriculture and Food recently announced an €8 million scheme to provide establishment grants of up to 50% for farmers planting miscanthus and willow on set-aside land and on areas that have been subject to an aid for the EU energy crop premium. The scheme is being piloted this year and will allow up to 1,400 hectares of willow and miscanthus to be grant-aided in the first year. I am glad to note the Minister for Agriculture and Food's clarification today that REPS farmers are not excluded from the new bioenergy scheme for willow and miscanthus. The remainder of their land continues to be eligible for REPS payment. The Minister said she was reviewing the overall position in the context of preparations for the introduction of REPS 4.

In his budget 2007 speech, the Minister for Finance also announced that funding would be available for specialised biomass harvesting machinery. This will assist farmers and foresters to add value to their forestry plantations by providing new markets for waste wood products.

A key feature of the Government's strategy for renewable energy and, in particular, bioenergy, is the introduction of a top-up to the energy crop payment. While farmers have begun to diversify into the growing of energy crops, the €45 per hectare European energy crop payment has not been sufficient to attract large numbers of farmers into the energy sector. Last week, as part of the Government's bioenergy crops scheme, the Minister announced that the Government would provide an €80 per hectare top-up to the payment allowing farmers to avail of a payment of €125 per hectare.

This is a significant increase and is timed to coincide with the new market demand measures introduced by the Minister for Communications, Marine and Natural Resources. It is part of the joined up Government approach which is central to renewable energy policy in Ireland. In July, the Minister, Deputy Noel Dempsey, established a bioenergy ministerial task force. Ministers from seven Departments were represented on the task force, including the Ministers for Agriculture and Food; Finance; Environment, Heritage and Local Government; and Enterprise, Trade and Employment. The combined initiatives announced in the three months by the Minister for Agriculture and Food and Minister for Communications, Marine and Natural Resources were firmly rooted in the work of the task force and were fully backed by the Minister for Finance. These initiatives are designed to deploy renewable energy in a manner which maximises all of the opportunities for Ireland, including benefits for the environment, security of energy supply and rural economic development.

The new measures also build on the success of previous programmes. The two bio-fuels mineral oil tax relief schemes launched in 2005 and 2006 have demonstrated that there is a strong appetite in Ireland for the development of an indigenous bio-fuels sector. While EU state aids rules do not allow the Government to provide tax relief to fuels only produced in Ireland, a range of projects have emerged from these two schemes, which will see new facilities being developed on the island using feedstocks which include Irish energy crops and waste products.

Eight projects were approved under the first scheme and 16 have been successful under the second scheme announced in November. The projects range in size from smaller pure plant oil facilities to producers of high blends of biodiesel made from recovered vegetable oil and oil seed rape, for use in captive fleets, and to largescale production of bioethanol and biodiesel that is already being blended and sold in regular fuel pumps. The move to a bio-fuels obligation will provide a serious new opportunity for the farming community to diversify into energy crops.

I note that ten member states are now opting for bio-fuels obligations as the preferred policy options. Member states which initially had difficulty kick-starting their bio-fuels markets are now rising to the challenge and I have no doubt there will be increasing opportunities for Irish growers and producers not just in Ireland but in the wider European market. This is particularly relevant when we consider that Ireland is committed to a target of 10% by 2020 and that this target is in line with proposals currently being considered at EU level.

The Minister, Deputy Noel Dempsey, has already alluded to the fact the Bill, as presented, cannot be accepted because it would contravene existing EU legislation. The measures announced by him this week provide a workable and more ambitious solution to developing a bio-fuels market in Ireland and I strongly commend the Government for its ongoing initiatives to support this growing sector.

Photo of Noel O'FlynnNoel O'Flynn (Cork North Central, Fianna Fail)
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I refer to the energy report of the Joint Committee on Communications, Marine and Natural Resources of June 2006 which contained 38 recommendations. A Green Paper followed from that in October and we await the White Paper on Energy. We are making much progress in regard to energy. Since coming into office, the Minister, Deputy Noel Dempsey, has very much focused on the energy sector and on the difficulties facing not only Ireland but the world. We commend him for so doing. Over the past year or two, for the first time ever, the people have begun to focus on security of supply and on whether fossil fuel is finite. They are also looking at ways to save energy.

The success of grants introduced by the Department and administered by Sustainable Energy Ireland for renewable energy, whether solar panels, geothermal pumps or wood pellets, has been phenomenal. People are concerned about their energy needs and are looking at ways to reduce them and save energy. I would like all new builds to have solar panels on their roofs to avail of energy generated by the sun when it shines. It would not be very expensive to put solar panels on roofs to help meet the energy needs of households. I hope the policymakers will consider that suggestion and other alternative sources of energy which could be built into new builds. I note a number of companies offer different specifications to do that. I hope we move towards keypad metering and that the ESB and Bord Gáis move towards this so people would be aware of their energy consumption and would do something to reduce it.

As Chairman of the Joint Committee on Communications, Marine and Natural Resources, I fully appreciate the importance of building a more sustainable transport future. As the Minister outlined, this Bill, in its approach to encourage bio-fuel development, is flawed. I am surprised at Deputy Durkan because he contributed to the 38 recommendations made by the joint committee. Indeed, his fingerprints are on a number of the recommendations here which are already in place and where the policies are being developed by the Minister and the Department.

I welcome the fact it is the Minister's intention to introduce an obligation on fuel supply companies to have an average of 5.75% bio-fuels in their overall annual transport fuel sales by 2009. He is giving us enough time to do that. Those who manufacture vehicles and engines must convert engines to ensure we can use bio-fuels.

Representatives of Cork City Council appeared before the Joint Committee on Communications, Marine and Natural Resources. Indeed, members of the joint committee went to see Cork City Council's fleet of vehicles. It is interesting to note that 5% of the transport fleet of Cork City Council is run on alternative fuels, includingrapeseed oil etc. Perhaps the Minister and his Government colleagues might look at the transport fleet of companies, local authorities and Government bodies to see if vehicles could be converted to run on bio-fuel. We should encourage other local authorities to follow the example of Cork City Council. Perhaps other local authorities have done so but there is an opportunity for us to lead the way and to seek the conversion of all vehicles in the ownership of the State or statutory bodies to run 100% on bio-fuels.

As Chairman of the Joint Committee on Communications, Marine and Natural Resources, I have presided over a number of important debates on renewal energy policy not only in the transport sector but in the renewable heat and electricity sectors. The pace of development and the scale of achievement have been very positive and encouraging. In addition to the successful bio-fuels mineral oil tax relief schemes and the newly announced bio-fuels obligation, we have introduced several innovative support schemes for the renewable heat and electricity sectors. The renewal energy feed in tariff programme has been extremely successful. The €47 million greener homes domestic renewable heat grants programme has been very successful with over 13,000 grant applications. I am thinking of getting a solar panel to see if it will help save on my energy use.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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I thought the Deputy had one.

Photo of Noel O'FlynnNoel O'Flynn (Cork North Central, Fianna Fail)
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The €26 million grant aid package for commercial scale biomass boilers will allow businesses to avail of lower cost heating and will facilitate the development of a biomass sector in Ireland. The Minister launched the €11 million combined heat and power grants. We are delivering an ocean energy strategy. University College Cork is developing an ocean wave strategy and mechanisms which, hopefully, will be successful and will help in the area of renewal energy.

The power of one is an important first step but the power of two involves everybody saving energy and being conscious of the necessity to do so. I commend the Minister, his Department and the Government on the initiatives they are taking. A very important first step has been taken in recent years, which will result in a successful outcome for this country.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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I wish to share time with Deputy Upton. I commend Deputies Naughten, Durkan, Bruton, O'Dowd, Olivia Mitchell and their Fine Gael colleagues on bringing forward the Biofuels (Blended Motor Fuels) Bill 2007 and highlighting the critical importance of developing a vibrant Irish bio-fuels industry.

The transport sector across the world is heavily dependent on oil, with approximately 90% of world transport being oil-dependent, and it consumes a vast proportion of global energy resources. Because we are now increasingly facing the challenges of peak oil, climate change and the development of a low-carbon and sustainable economy it is critical that we encourage a viable and significant bio-fuels sector.

There are enormous benefits to bio-fuels and they provide a unique mechanism for reducing the present over-dependence on oil in transport. Given that bio-fuels are so similar to fuel produced from fossil fuels it is possible to incorporate them into the supply systems that already exist at petrol stations. In recent years we have seen the success of Brazil, Canada, the United States and others in that regard.

At present almost 100% of Irish transport is dependent on imported oil, with a requirement for 200,000 barrels per day, and there is a need for the rapid deployment of cleaner fuel sources, particularly those derived from our own native agricultural resources. This Bill aims to ensure that all motor fuels comprising mineral oils will at least partly be made up of bio-fuels. It provides an interesting first legislative step for advancing bio-fuels and it is telling that it was not brought forward by the Minister of State at the Department of Finance, Deputy Parlon, the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, the Chairman of the Joint Committee on Communications, Marine and Natural Resources, Deputy O'Flynn, Deputy Peter Kelly or any of their colleagues, who have provided few initiatives or incentives for bio-fuel development during the term of the outgoing Government.

Last year I remember Deputies Naughten and Upton being very upset as the sugar factories in Mallow and Carlow were closed down, causing devastation in those two local communities. The Government refused even to consider the possibility of transforming those two factories into bio-fuel centres. We were all contacted by people on that issue, particularly in Mallow, where many believed the refinery in the town could easily have been adapted to bio-fuels.

Deputy O'Flynn mentioned the work done by Cork City Council, about which I heard at the recent meeting of the Joint Committee on Communications, Marine and Natural Resources. I recently congratulated Dublin's Lord Mayor, Vincent "Ballyfermot" Jackson, on introducing in a fleet of bio-fuel cars. The new 18 Ford Focus flexi-fuel environmentally friendly vehicles run on any mixture of conventional petrol and E85 bioethanol. They will constitute 10% of the council's car fleet and will be used by staff from a number of departments. However, as with other major developments in this area, it has been left to local government to introduce innovative developments. For example, Dublin City Council, on which I once sat, has brought froward a Wi-Fi broadband zone. Why can the national Government not introduce such initiatives?

I have watched with interest the new series of media advertisements for the Power of One energy efficiency campaign and I strongly support its awareness-raising objectives. People have noted it but the power of one should have started with one Minister. The refusal of 15 out of 17 senior Ministers, as recently confirmed by a report in the Irish Independent, to opt for greener, more fuel-efficient ministerial Mercedes or Volvos is a terrible example to the rest of the country. The Minister must start with himself because this refusal flies directly in the face of the message of personal energy responsibility he has sent to the public.

The Bill before us does not include any actual targets. Although setting targets can be very useful for achieving real advances in renewable energy resources, I note that the intention behind the absence of targets is to allow flexibility for the Government of the day, hopefully a new Government, to increase the proportion of bio-fuel as much as possible. Almost two years ago, on behalf of the Labour Party, I called for a mandatory bio-fuel obligation, as has been proposed in the Bill, so that we would meet the 5.75% target.

This Government's record on developing renewable energy sources is, despite what the Chairman of the Joint Committee on Communications, Marine and Natural Resources said, absolutely dire and this is even more true when it comes to bio-fuels. Deputy Peter Kelly will remember that when I raised the issue of senior citizens in this city looking for an insulation grant in March 2006 we discovered that the HSE budget for the city was totally exhausted. That showed this Government's commitment to renewable energy to be non-existent.

In late January the EU released figures showing that bio-fuels contributed just 0.05% of the Irish fuel mix in 2005. As a fellow member of the Joint Committee on Communications, Marine and Natural Resources, Deputy Peter Kelly will be interested to note that, in 2004, the proportion was 0.00002%. Such was the commitment of the then Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, the Taoiseach and the Minister for Finance, Deputy Cowen. The Government's national indicative target, which the EU belatedly gave us, of 0.06% was not even approached. Instead the Government chose to establish an even more meagre target. We were supposed to have reached a target of 2% bio-fuel by the end of 2005, another of the many missed targets of the outgoing Government, following decentralisation, education and health.

The 2002 programme for Government, which I know Deputies read for entertainment, is a work of fiction worthy of submission for the Booker prize. Most of its targets were not met.

Until yesterday the main mechanism through which bio-fuels were encouraged was a limited bio-fuels tax relief programme. In August 2005, the bio-fuels mineral oil tax relief scheme was introduced, which allowed for €3 million per annum in excise to be forgone on bio-fuels. Many of our EU partner states were zooming ahead with fiscal measures at that stage. Finally, in budget 2006, an excise relief package for bio-fuels of €200 million over a five-year period, from 2006-10, was announced. I note that, of the €200 million in tax relief, €150 million will be spent by the next Government. If the Labour Party gets the opportunity, we will be delighted to do so and will increase the figure.

In February 2006 the EU presented a new bio-fuels strategy to encourage member states to take more action to reach the 2010 target. A number of measures were proposed, including seven policy axes including possible mandatory targets, which we need at every pump and in every forecourt. They also include the promotion of second generation bio-fuels, for example biomass and wood, and appropriate environmental standards. It is a useful programme which we should adopt.

Due to the present cost differential with traditional fossil fuels many EU governments have also intervened to promote bio-fuels, often in the form of a remission on excise duties. One of the best studies I have read, by a group of UCD-based economists, found that to encourage bio-fuels the exemption from excise duties is the instrument that incurs the least transaction costs. The report is entitled Stimulating the Use of Biofuels in the European Union: Implications for Climate Change Policy, and is authored by Ryan, Conway and Feirreira, UCD 2004. For the past few years the UK has set the excise duty for bioethanol at 20p below the excise duty of ultra-low sulphur petrol and sulphur-free fuel. Spain, Finland, Germany, the Czech Republic and Sweden have all taken decisive action on excise exemption.

Allied to the lack of development in the bio-fuels sector has been the stagnation of biomass. I used to be my party's spokesperson on forestry, when it was in the same portfolio as communications and natural resources, although it is now with agriculture — probably correctly, given land use strategies. The European Commission, at the end of 2005, presented a biomass action plan that aimed to double the use of bioenergy sources in the EU's energy mix by 2010. At the moment, approximately 4% of the EU's energy needs are met through biomass. The European action plan advances 31 measures to promote the use of biomass in heating, cooling, electricity production, transport etc. Germany, the UK and the Netherlands already have, or are currently preparing, national biomass action plans. The European Commission has long urged a rapid adoption of the EU plan by all states. The adoption of a national plan by our country should be a priority, even before the Government leaves office. It is coming up with legislation and plans as we head into the general election so it would be better to do this late rather than never.

This Government's record should make Deputies on that side of the House hang their heads in shame. It is more than a coincidence that in the week we were supposed to discuss this Bill, the Minister for Communications, Marine and Natural Resources underwent a Damascene conversion on the benefits of bio-fuels and proposed the introduction of a bio-fuels obligation. I studied his press release because I am not sure of his intentions.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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He is not sure of them himself.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Exactly. Does it mean that 5.74% of Ireland's transport market will be supplied by bio-fuels by 2009? In urban areas we are concerned about the way garage forecourts have been sold off for residential development. If the Government was serious about bio-fuels, it would ensure a good network of petrol stations exists because the public will only be able to benefit from this idea if fuel is available.

Tom Parlon (Minister of State, Department of Finance; Laois-Offaly, Progressive Democrats)
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The Deputy probably wants to nationalise them.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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Not now that he is in the low tax party.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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There is no need to do that but we should change the planning laws to state that each significant area should have a petrol forecourt — there is nothing wrong with that — and it should have a hotel as well. Perhaps the Minister of State has not noticed what his Government is doing in this city and other areas but it is taking away some of the services we need. I support the provision of services in Tullamore and other areas of Laois and Offaly but we also need them here in Dublin.

I broadly welcomed the Minister's suggestion yesterday. I have long asked him to look at the renewable transport fuels obligation introduced by my colleagues in the British Labour Party, Chancellor Gordon Brown and Prime Minister Tony Blair, that will require 5% of all fuels sold at the pumps by 2010 to be bio-fuels. We should follow the trails that have been blazed in Brazil, America and Canada. When I read the Minister's statement yesterday, however, I still could not see any details of how this will operate or when it will be implemented.

Some farmers are upset because they cannot avail of the benefits that might come from switching to bio-fuel production.

Tom Parlon (Minister of State, Department of Finance; Laois-Offaly, Progressive Democrats)
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Deputy Naughten is the only person who was upset because he did not understand the system.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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They do not get paid. It is black and white and the Minister of State knows it.

Tom Parlon (Minister of State, Department of Finance; Laois-Offaly, Progressive Democrats)
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They can be in REPS and still get money from the scheme.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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They cannot receive a REPS payment while getting the other payment from the land.

Tom Parlon (Minister of State, Department of Finance; Laois-Offaly, Progressive Democrats)
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Of course they can.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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That is the situation and the Minister accepted that today.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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That is my reading of the situation and, in spite of my slight Dublin accent, I am from a rural background so I was concerned about the bad situation in which many farmers found themselves.

Why does the Minister not mandate some of his officials to develop a clear plan to implement a bio-fuels obligation? He spoke about a long period of consultation but it is too late for that. Perhaps the next Government can embark on consultation. The Minister strongly condemned the Private Members' Bill yesterday but he has brought forward no initiatives on bio-fuels. It has been left to Opposition spokespersons, such as our Fine Gael colleagues and us in the Labour Party, to hound the Minister in Dáil Éireann to establish concrete measures for advancing bio-fuels and other forms of renewable energy. I cannot see why he is criticising this Bill and why it could not be adopted in principle.

We also heard on radio concerns being raised about vehicles. The Chairman of the Oireachtas Committee on Communications, Marine and Natural Resources is an expert on the area but there were interesting reports on problems faced by motorists who wish to convert their cars to run on bio-fuels and the problems with warranties when buying a car. I do not know if the Minister held any talks with car makers. If not, he should do so. Certainly, the Minister for Transport never talks to them.

I compliment Fine Gael and Deputy Naughten on introducing this Bill and I hope it will be a first step on the road to a more comprehensive legislative framework for the development of bio-fuels which, hopefully, we will be involved in during the next Dáil.

Photo of Mary UptonMary Upton (Dublin South Central, Labour)
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I welcome this Bill and compliment Deputy Naughten on introducing it. Mankind faces two equally great challenges — climate change and peak oil. Managing our reactions to all the consequences these challenges throw up will impact on the future course of mankind.

Local challenges are also being faced in Ireland on a daily basis by farmers. There are challenges in making a living from the land in the face of the running down of agricultural supports from the EU, competition from the south and finding alternative crops to sugar beet. Introducing mandatory blending of all motor fuels is an essential step we must take if we are to rise to the challenges we face due to climate change and peak oil. We must also try to solve the problems faced by Irish agriculture.

Biomass is the only renewable energy source that can replace fossil fuels directly, either completely in small-scale applications or by blending solid, liquid or gaseous biomass fossil fuels in large-scale applications. Thus, co-utilisation of biomass fuels with fossil fuels or bio-fuels is a quick and relatively reliable way to reduce greenhouse gas emissions, preserve natural resources and cope with excess agricultural production capacity.

Together, German, French and Italian bio-fuel production is 18 times greater than that of the USA. Europe is the global leader in biodiesel production and between 2003 and 2004, European bio-fuel production increased by 26.6%. Voting in favour of this Bill will not lead to motor fuel shortages. It will, due to increasing demand for bio-fuels, increase Ireland and the EU's energy security.

Bioenergy is often said to be carbon neutral, on the basis that the carbon released on burning the fuel is equal to the carbon removed from the atmosphere when the crop is growing. There are, however, limits to the extent to which conventional biodiesel or bioethanol can be combined with fossil fuels without requiring alterations to the current distribution infrastructure or engine requirements. In accordance with this Bill, the proportion by volume that is blended with the motor fuel should be subject to review.

The British Society of Motor Manufacturers and Traders states that while commercial bio-fuels, such as bioethanol, can reduce well to wheel emissions by between 7% and 77%, second generation bio-fuels that will become available within the next five years can exceed these carbon savings. This is endorsed by the Biosciences Federation and British Royal Society for Chemistry, which maintain that although first generation bio-fuels are necessary in the short to medium term, greater carbon savings can be achieved from second generation bio-fuels produced from biomass.

The use of biobutanol represents a possible first step between existing first generation bioethanol and more advanced bio-fuels that are still in pre-commercial development. Biobutanol exhibits distinct advantages over conventional bioethanol such as greater energy density and greater compatibility with existing infrastructure and distribution networks. Produced from the same feedstocks as bioethanol, such as wheat and sugar beet, biobutanol can also be blended with petrol at levels of up to 10% by volume without requiring vehicle modification or the invalidation of warranties.

Using anaerobic digestion to generate energy from organic waste provides the opportunity to use wet biomass, such as livestock slurry, sewage sludge and food waste. Anaerobic digestion is the breakdown of organic matter by micro-organisms to produce biogas, comprising 40% carbon dioxide and 60% methane, as well as liquid and solid bioproducts. Biomethane is equally suitable as a vehicle fuel, a source of heating or to create electricity.

Some experts have suggested that a large-scale transfer from using rapeseed oil for food to using it for fuel might disrupt world commodity markets. In this context, it is interesting to note that, in general, food crops are no more than 50% efficient. For every tonne of food produced, a further tonne of potential biomass is produced. A second generation bio-fuel such as lignocelulosic ethanol and biomass liquid transport fuels, that use organic waste material such as straw and woody waste, would have a less disruptive influence on world commodity markets for food than first generation bio-fuels. Large amounts of wood waste go to landfill at present and this could easily be used to generate bio-fuels for transport.

Despite genuine concerns about its impact on biodiversity, it is clear that Ireland has the agricultural experience, capacity and land to grow the bio-fuels necessary if we are to fulfil our obligation to meet the long-established EU target of 5.7% of the EU's fuel mix to comprise bio-fuels by 2010. We have begun in Ireland with a variety of fiscal measures but there is much more to do. We can do considerably more by introducing a mandatory blending of all transport fossil fuels with biofuels, which would at the same time stimulate demand and supply of biofuels in Ireland. The need for research and development has been mentioned. As research takes some time, we need to invest much more significantly in that area to bring about proposals for the appropriate mix with a view towards development particularly in the agriculture area.

As my colleagues have done, I draw attention to the disallowing of the REP scheme and the growing of alternative crops, which makes no sense. Farmers have rightly had grave concerns about how the closure of the beet industry was handled. It has been a huge disappointment that sugar beet was not considered an alternative fuel crop as could and should have been done. Making mandatory the blending of all motor fuels will not on its own conquer the challenges we all face as a result of climate change, peak oil and the end of supports for Irish agriculture. The time when we will need to introduce mandatory blending of all energy sources, not just motor fuels, may not be as far away as we might hope and think. The one thing we can do today to delay that time is to vote in favour of the Bill. It would assist in overcoming the challenges of peak oil, climate change and the phasing out of agricultural supports.