Brian O'Shea (Waterford, Labour)
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Question 96: To ask the Minister for Agriculture, Fisheries and Food if his attention has been drawn to the potential of miscanthus to meet fuel needs for domestic and commercial users. [3872/10]

Trevor Sargent (Dublin North, Green Party)
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I am aware of the potential to use miscanthus to generate heat and power in the bioenergy sector. The Department has been grant aiding farmers to plant miscanthus since 2007 under the bioenergy scheme. The scheme was launched on a pilot basis to provide farmers with an establishment grant to cover 50% of the costs of establishment up to a maximum payment of €1,450 per hectare. Eligible costs include those associated with ground preparation, fencing, vegetation control, the purchase of planting stock and planting. Up to 2,500 hectares of miscanthus were grant aided to the end of 2009.

As with any emerging sector, markets for miscanthus cannot be developed in isolation and require close collaboration between all partners in the supply chain from producer to processor. The initial target market should be end users with a high continuous heat demand. These markets should be local and of sufficient size and dependability to reduce transport costs. I understand that new markets are being developed in the fire log, pellet and briquette sectors to meet the growing demand for biomass in domestic and commercial stoves, open fires and boilers. The use of miscanthus as a co-fuel with peat is also being developed with trials ongoing at the peat-burning power stations. Eventually it will be possible to convert crops like miscanthus into liquid biofuel through the use of emerging second-generation technologies. It will be a number of years, however, before these technologies reach commercial viability.

Ireland's climatic and soil conditions are very suitable for growing miscanthus and the sector has the potential to offer a new rural activity for farmers. Miscanthus can also deliver positive outcomes in terms of reduced CO2 emissions and can contribute an increased supply of biomass to meet Government targets on bioenergy.

My Department is currently reviewing the operation of the pilot bioenergy scheme to assess the need for a new scheme from 2010 onwards and an announcement will be made shortly.

Seán Sherlock (Cork East, Labour)
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In that review I ask the Minister of State to recognise that €1,450 is too modest a grant sum because the input cost is high enough for individual farmers who might wish to move into growing miscanthus. If the sum were to be increased it would encourage more growers.

There is no doubt about the potential of miscanthus especially for the anufacture of pellets and firelogs, as the Minister of State outlined. Demand is growing exponentially and on an almost weekly basis. The delay does not relate to miscanthus being brought to market but rather it revolves around trying to encourage more farmers to grow it. The only way to achieve the latter is to provide a greater incentive at the start-up point. I, therefore, ask that the Minister of State to consider increasing the start-up grant.

Trevor Sargent (Dublin North, Green Party)
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I will put the Deputy's suggestion regarding an increased start-up grant to the officials in my Department. As he stated, when it comes to pellets, briquettes, whole-bale boilers, co-firing, and so on, the potential of miscanthus is significant. As with any new activity, however, a certain amount of lead-in time is required. The methods relating to growing miscanthus are not unlike those which obtain in respect of growing wheat. Given that it is not a food crop, however, growing it does not come naturally to those involved in farming who have grown food all their lives. That said, increasing numbers of farmers are considering growing miscanthus. We will take account of the Deputy's comments in carrying out our review.

Michael Creed (Cork North West, Fine Gael)
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One of the observations made by those in the industry in respect of microgeneration is that the price being paid for the electricity being sold into the national grid is too low, in relative terms, when compared to the price that obtains in the UK and Northern Ireland. If we are to get a return on the investment we are giving to primary producers, we need to increase the price paid for microgeneration, for biomass energy production and so on.

I understand the Minister for Communications, Energy and Natural Resources is reviewing this whole issue. Investment in the sector has stalled because of the price differential. Will the Minister of State use his good offices to convey the concerns of the House to the Minister, Deputy Ryan on this specific issue, with a view to at least meeting the price that is being paid for microgeneration into the national grid?

Trevor Sargent (Dublin North, Green Party)
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We are getting great value in the House today, particularly when one considers that I am replying to questions that are proper to the Departments of Enterprise, Trade and Employment and Communications, Energy and Natural Resources.

Michael Creed (Cork North West, Fine Gael)
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The Minister of State did not answer the question I asked him earlier.

Trevor Sargent (Dublin North, Green Party)
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I will certainly pass on to the Minister for Communications, Energy and Natural Resources the Deputy's comments regarding the cost of feeding energy into the national grid. The review to which I referred will take on board the experience of farmers and the difficulties they face to date.

P J Sheehan (Cork South West, Fine Gael)
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The Minister of State does not appear to be very familiar with miscanthus, which has proven to have great potential in the context of the production of firelogs, and so on. In addition, miscanthus is a quick earner for farmers. I do not want this matter to be dragged out for two or three years. A decision must be made immediately. The Minister of State referred to two other Departments which have an interest in this matter. However, he must accept the necessity of ensuring progress is made as quickly as possible.

Trevor Sargent (Dublin North, Green Party)
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I have no doubt that, notwithstanding the implications in respect of energy and other matters, responsibility for miscanthus comes within the remit of the Department of Agriculture, Fisheries and Food. I accept that it is a quick earner for farmers. However, the market relating to it must still be developed. A product development project - in the context of mixing wood and miscanthus on a 50-50 basis - in respect of peat-fired generating stations is in train. I am sure this will help the market to grow. Ultimately, the market will determine the success of the sector. The start-up grant will obviously play its part but more will be required in the context of good market development.

Seán Sherlock (Cork East, Labour)
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I accept that a marketing exercise will have to be undertaken. However, a great deal of micromarketing is taking place in various regions - Limerick and east Cork are two examples of which I am aware - in respect of certain sectors. Those involved in the industry have informed me that if the start-up grant paid to farmers is increased, and if a proper education process to accompany this is put in place, this will be of major assistance to local or micromarketing initiatives.

With respect, we should not discuss this matter in an aspirational way. Let us put our money where our mouth is and invest in the industry. Miscanthus is both a carbon offset plant and a fuel source and it offers massive potential. We should display a great deal more urgency in the context of how we promote the growing of this plant.

Trevor Sargent (Dublin North, Green Party)
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A significant level of urgency has been afforded to this matter and a considerable amount of money has already been invested. Between 2005 and 2007, €6 million was spent, under the research stimulus fund programme, on 13 projects. There has been a great deal of investment in Oak Park and other centres. This matter is being treated with urgency. The review to which I referred earlier will provide a reality check on where we stand. While we may start off with the best of intentions, there is always need to tweak and change things to make them better. That is what is happening in this instance. This important part of Government policy is being refined and developed.