Simon Coveney (Cork South Central, Fine Gael)
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Question 36: To ask the Minister for Communications, Energy and Natural Resources the measures he is planning to introduce to promote bio-fuel production here in view of the setting a bio-fuel content for petrol and diesel target of 4%. [43461/09]

Eamon Ryan (Dublin South, Green Party)
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In the interests of security of supply and the imperative to reduce green house gas emissions, the development of alternative transport fuels is of critical importance.

The 2009 renewable energy directive has set a 10% target for renewable energy in transport across all member states by 2020. In order for Ireland to deliver on that target the Government is committed to the sustainable development of the Irish bio-fuels market in line with overall EU bio-fuel policy criteria.

The introduction of the national bio-fuel obligation next year will underpin delivery of the national bio-fuel target and will take full account of EU bio-fuels legislation. Priority drafting of the required legislation is currently being finalised. The national bio-fuels obligation will also integrate the EU Commission's guidelines on the sustainability criteria as soon as these are finalised. Under the obligation fuel suppliers will be legally required to include an average of 4% bio-fuels in their overall annual fuel sales. The obligation will create a long-term guaranteed market of scale to allow the Irish bio-fuel industry certainty for the development of the sector. The obligation therefore will act as an incentive for bio-fuel producers.

The bio-fuels mineral oil tax relief schemes have already supported the development of indigenous production. The schemes have resulted in 18 projects being awarded excise relief from 2005. Since the excise relief schemes were introduced there has been a steady increase in bio-fuels used in Ireland, albeit from a very low base. Prior to the introduction of the schemes, market penetration of bio-fuels was almost non-existent. In 2007, penetration was 0.6% and in 2008 penetration had risen to 1.6%. I am advised that it will be in excess of 2% this year. There have been at least five bio-fuel plants constructed or redeveloped on foot of excise relief granted under the schemes. A number of others are either at an advanced stage of planning, or have received planning permission.

The introduction of the bio-fuel obligation in 2010 will, through the creation of a guaranteed market demand, provide the Irish bio-fuel sector with the certainty it needs to invest in new infrastructure. It will therefore underpin the development of economically sustainable production of bio-fuels in Ireland.

Additional information not given on the floor of the House.

The trading of certificates under the scheme, will also act as an incentive for Irish producers. For each litre of bio-fuel sold in the market a certificate will be issued by the National Oil Reserves Agency as the administrator of the scheme. Certificates will also be subject to verification by sellers to demonstrate that they meet the sustainability criteria. Bio-fuel obligation certificates may be traded among registered operators. I am confident tradability of these certificates will enable small indigenous producers, in particular, to enter the market and develop their businesses.

Simon Coveney (Cork South Central, Fine Gael)
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I agree with the setting of targets for the blending of bio-fuels with petrol and diesel. However, to do so in the absence of a plan to promote the bio-fuel industry in Ireland is a mistake. The Minister has done half the job. He has not provided a plan to deliver significant bio-fuel production in the domestic market. Importing ethanol or bio-fuel from Brazil or other parts of the world does nothing for energy security.

How many of the 18 projects for which the Minister's Department provided excise relief have resulted in bio-fuel production in Ireland? How many resulted in bio-fuel factories or production facilities in Ireland? The Minister says 2% of our fuel this year will be bio-fuel. This is about 110 million litres. How much of that is produced in Ireland?

How many planning permissions have been granted for bio-fuel production facilities, which will have to provide a 4% bio-fuel content in petrol and diesel? That will be the equivalent of approximately 220 million litres going into our cars, trucks and so on. How much of that will come from Irish production facilities?

Eamon Ryan (Dublin South, Green Party)
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I will give some further detail on what has been produced to date under the scheme. Of approximately 67 million litres bioethanol, 55% was imported, of 103 million litres of EN590, approximately 50% was imported, of 5.5 million pure plant oil, 7% was imported and of 4.5 million of captive fleets, 3% was imported. These are the figures I have.

In terms of how this will work, we are keen and intent on developing an Irish bio-fuels industry using home sourced crops, whether second generation bio-fuels, cereal, beet or rape seed oil or waste products, which can deliver Irish fuels. First and foremost, we must see how the European sustainability criteria will work. I believe they may give a real benefit to Irish produced material which will meet the requirements in terms of emissions reductions and not seeing the chopping down of rain forests or the change in land use problems which are there with imported bio-fuels. They will give us a real opportunity to promote home-grown bio-fuels and are due to come out at roughly the same time as our legislation will be brought before the House, hopefully early in the new year. That will give us time to set up this scheme, get it working and adjust accordingly to promote Irish bio-fuel producers.

Simon Coveney (Cork South Central, Fine Gael)
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I welcome what the Minister said in terms of recognising the problems of importing large quantities of bio-fuel, whether that is producing ethanol by cutting down rain forests or even the madness of transporting ethanol half way around the world and the carbon footprint that entails.

Will the Minister try to ensure in the legislation that all of the power is not in the oil companies' hands to simply source the bio-fuel they require to meet the criteria as cheaply as possible and, therefore, force competition between Irish bio-fuel companies and companies half way around the world? When putting the legislation together, we must positively discriminate in favour of producing bio-fuels domestically and require oil companies to source bio-fuels locally; otherwise, the bio-fuels plan is a waste of time, commercially and environmentally.

Eamon Ryan (Dublin South, Green Party)
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We will do everything we can to support the home generation of bio-fuels but subject to world trade rules. We cannot breach world trade rules, put in conditions which will result in difficulties under GATT and other arrangements and then have to reverse engines. More than anything, we need to create a stable market and a stable environment in which people can start to develop alternative bio-fuels products.