Michael Creed (Cork North West, Fine Gael)
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Question 14: To ask the Minister for Agriculture; Fisheries and Food given the potential of the sugar beet industry as a source of renewable energy as well as an employer and agri-food sector and on foot of the report published by the European Court of Auditors, if he is prepared to explore any future development of the industry here; and if he will make a statement on the matter. [45256/10]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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As part of the reform of the EU sugar regime in 2006, a temporary restructuring scheme was introduced by the EU Commission with the aim of reducing EU sugar production in order to comply with WTO and other international obligations. The scheme provided an incentive for sugar processors to renounce sugar quota and dismantle the associated sugar processing plant and it provided compensation for affected stakeholders.

Greencore plc, the sole Irish sugar processor and holder of the entire Irish quota allocation, decided to avail of the restructuring scheme. Accordingly, the company renounced the quota and dismantled the last remaining Irish sugar factory at Mallow in compliance with the conditions of the scheme.

With regard to the potential of the sugar beet industry as a source of renewable energy, the Deputy may be aware that Cork County Council undertook a study to provide a factual evaluation of the viability of ethanol production from beet and wheat at the former sugar factory in Mallow. The results were published in September 2006. The study found that production of ethanol from beet and wheat is technically feasible at the Mallow site with the appropriate plant and equipment modifications and additions. Furthermore, an investor would need to consider capital investment of €55 million to €65 million for plant and modifications in addition to some €25 million to €30 million to purchase the site. By comparison, capital investment for a greenfield site would cost in the region of €100 million to €110 million, plus land purchase of €1 million to €2 million for agricultural zoned land or up to €15 million to €20 million for industrial zoned land.

Ethanol from beet or wheat in Mallow would require economic support to compete with petrol or imported ethanol. The support needed would be 26 cent for every litre produced compared to the full excise relief of 44 cent per litre available under the current excise relief schemes. Ethanol production in Mallow would employ some 50 people, which is less than 25% of the number employed during the sugar campaign. At full capacity the plant would require feedstock from 50,000 hectares. Ethanol would help overcome dependence on foreign energy, it burns cleaner than petrol and results in fewer emissions.

I understand that since decisions regarding the future use of the former sugar factory at Mallow were primarily a matter for the owners, anyone who expressed an interest in the possibility of utilising this factory for bioethanol production was advised to pursue the matter directly with Greencore.

There is no mechanism under the present regulations to allow for the re-instatment of the sugar quota for the growing of sugar beet in Ireland for the sugar industry. Any proposal to review the EU sugar quota regime would be a matter for the EU Commission in the first instance and any proposal to re-establish a sugar factory in Ireland would, subject to the availability of quota, be a matter for commercial decisions by interested parties. The Deputy will be aware that a quantity of sugar beet has always been grown in Ireland for fodder purposes and this continues. It is not affected by the EU sugar regime.

Michael Creed (Cork North West, Fine Gael)
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The Minister's response is interesting. I ask him to place in the Oireachtas Library a copy of the agreement reached between the Commission and the Government in February 2006 because it is a difficult document to access and one that is critical to this debate.

The Minister has outlined the reasons for potential. I am aware of the report from Cork County Council. The problem is that the plant in Mallow has been razed to the ground. Whether the future industry can develop in Mallow or Midleton or elsewhere is a parochial issue which I do not wish to deal with in detail here. However, it is clear that a monumental mistake was made. Whether one blames the Government, Greencore or the farm organisations, the blame game is irrelevant now. What we need to do now is to salvage something from this situation. Will the Minister seize this issue and pursue it to its end objective? It is a very valuable crop from a tillage industry which will come under increasing pressure in the future. It offers a source of income to the tillage sector and also employment and it meets our future non-renewable energy objectives.

Let us leave aside the blame game. The monumental errors made by Greencore, by the Government, by the Commission and outlined by the EU Court of Auditors, are only of comfort in respect of "I told you so" - which is what some people in this House did, but that is water under the bridge. Can we salvage something now and will the Minister pursue it, take it on board and bring it to an end-game?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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With regard to Deputy Creed's comments, I do not accept that the Government made mistakes with the sugar regime. I said earlier in the House-----

Michael Creed (Cork North West, Fine Gael)
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The Government decommissioned a fully viable plant, it should look at the EU Court of Auditors document.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Deputy Creed is very well versed in this subject. He knows well that Greencore was the quota holder. It decided to exit the industry, not the Government.

Michael Creed (Cork North West, Fine Gael)
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The then Minister, Deputy Mary Coughlan was at the negotiating table.

Brendan Howlin (Wexford, Labour)
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The Deputy should not shout Members down. The Minister without interruption.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The then Minister, Deputy Mary Coughlan, was extremely active in opposing the European Commission in regard to sugar reform. Thirteen other member states initially supported the Irish stance and the Tánaiste chaired that group and led it at that time. When the decision came to the Council-----

Michael Creed (Cork North West, Fine Gael)
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The Minister should be ashamed of himself.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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-----meeting about the sugar regime, Ireland did not have the support to block the Commission proposals. In that event, the then Minister had negotiated a compensation package to be available to the different stakeholders-----

Michael Creed (Cork North West, Fine Gael)
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Compensation.

Brendan Howlin (Wexford, Labour)
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We have had this debate in the House. I am anxious that the specific question be answered.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Deputy Creed raised that issue and it was important that I give my view. I will come back to Deputy Creed in case I am inaccurate in any detail. I checked my information when we debated this previously. I understand that Greencore did some study on the possibility of starting a bioethanol facility. It stated at the time that this was not viable. The issue has to be addressed in the term used. From recollection there was out of quota sugar. The sugar quota regime issue would still come under the present regime. I will check my information and I will write to Deputy Creed on that specific issue. I am speaking from memory.

Deputy Creed made the point about renewable energy. The Department of Communications, Energy and Natural Resources is the lead Department in this regard. Deputy Creed is familiar with the Food Harvest 2020 report in which we outlined a number of issues which we need to advance and which my Department will advance in conjunction with the Department of Communications, Energy and Natural Resources.

Brendan Howlin (Wexford, Labour)
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I remind Deputies they have one minute in which to answer questions and I have already allowed the Minister three minutes.

Seán Sherlock (Cork East, Labour)
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I ask for clarification. From where has the Minister derived the figure of the price of 26 cent per litre? Is this the amount that would make it sustainable? Is the Minister now saying that pre-2015 there is no possibility of subsidisation of beet growing for the production of ethanol? Is he saying there would be no Government support for the production of ethanol from sugar beet?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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There is Government support for the renewable energy sector. Deputies questioned us regarding support for the growing of miscanthus and willow. This coming year provision has been made for a very substantial increase, the largest ever.

I wish to be accurate in my reply to Deputy Sherlock regarding the implications for the EU sugar regime, were a bioethanol production facility to be established in Ireland. I will communicate with both Deputies. I did not check that issue but I recall reading it prior to the last debate. The note I had at that time referred to out-of-quota sugar and the fact that Greencore had carried out some initial studies on the viability of such a plan.

Noel Coonan (Tipperary North, Fine Gael)
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In view of the statement by the European Court of Auditors that the sugar industry should never have been closed in Ireland, will the Minister use the CAP reform negotiations to pursue the agenda of reopening this industry?

The Minister mentioned the issue of money and the unavailability of sites. The first mistake was the closure of Thurles sugar factory. Is the Minister aware that Anglo American, the owner and operator of Lisheen Mine, which has a centre of excellence for renewable energy and a subsidy from the ESB, is focusing on this and has land that is zoned for the purpose? Will he enter into discussions with Anglo American with a view to basing this industry in Thurles, County Tipperary, in the midlands, where it should be? Will he avail of its offer and expertise? It has the capital investment to put into it.

Seán Sherlock (Cork East, Labour)
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Tell that to the Fine Gael boys in Mallow.

Noel Coonan (Tipperary North, Fine Gael)
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That is the proposal. Is the Minister aware of it and will he pursue it with the company?

Brendan Howlin (Wexford, Labour)
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I will take a brief final question from Deputy Creed.

Michael Creed (Cork North West, Fine Gael)
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I understand the Minister's defensiveness about this.

Brendan Howlin (Wexford, Labour)
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Quickly, Deputy Creed.

Michael Creed (Cork North West, Fine Gael)
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There are many that should shoulder the blame, not least the Department, the European Commission and Greencore, but can we salvage something from this? I support the point made by Deputy Coonan. I am not preoccupied with the issue of whether a factory is built in Mallow or Thurles, but an industry can be re-established. Thousands of growers and factory workers were sacrificed on the altar of this deal.

Will the Minister leave the past behind, look at the report of the European Court of Auditors and decide this is a viable industry whose cornerstone is alternative energy? Will he run with it?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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With regard to the point made by Deputy Coonan, I would not try to influence any company on where it might locate a potential industry.

Noel Coonan (Tipperary North, Fine Gael)
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Not even if it was going to Cavan?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Deputy Crawford and I would indicate the merits of locating industry in Cavan or Monaghan, but I would not try to influence anybody.

Seán Connick (Wexford, Fianna Fail)
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What about Wexford? Wexford is very important.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I am not familiar with the potential project Deputy Coonan mentioned. Those people may have been in touch with the Department, although I am not aware of it.

Noel Coonan (Tipperary North, Fine Gael)
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They were in the House this morning to appear before another committee - the Joint Committee on Communications, Energy and Natural Resources.

Brendan Howlin (Wexford, Labour)
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Please, Deputy. I ask the Minister not to be distracted but to finish his answer.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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As Deputy Coonan knows, that is the lead Department for that industry.

Noel Coonan (Tipperary North, Fine Gael)
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Will the Minister co-operate with it?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Of course we will. I said in my initial reply that we have ongoing co-operation with that Department.

Brendan Howlin (Wexford, Labour)
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I must move on to the next question.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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In very difficult financial circumstances, we have made provision for 1,800 ha. of miscanthus and willow to be planted in the coming year.

Brendan Howlin (Wexford, Labour)
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Question No. 15.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I will just answer Deputy Creed's question about the report of the European Court of Auditors. There has been public commentary about that, particularly on national radio. The report mentioned that Mallow could have been a viable sugar beet processing facility, but only if the European Commission reforms had not been carried out. That is always left out of the commentary.

Noel Coonan (Tipperary North, Fine Gael)
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Will the Minister use the CAP negotiations-----

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The reforms were carried out.

Michael Creed (Cork North West, Fine Gael)
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That is not the point.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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It is.

Seán Sherlock (Cork East, Labour)
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The Minister is now deliberately provoking a debate on the issue.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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No, I am not. That is the point.

Andrew Doyle (Wicklow, Fine Gael)
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A Leas-Cheann Comhairle, I did not speak on this.

Seán Sherlock (Cork East, Labour)
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The Minister had the last word, and then-----

Brendan Howlin (Wexford, Labour)
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The House will have order.

Seán Sherlock (Cork East, Labour)
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The Minister is provoking a debate on this issue.

Brendan Howlin (Wexford, Labour)
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Minister, we are moving on to question No. 15.

Seán Sherlock (Cork East, Labour)
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That was a cheap parting shot.

Andrew Doyle (Wicklow, Fine Gael)
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May I ask a supplementary question?

Noel Coonan (Tipperary North, Fine Gael)
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The House may have order but the country does not.

Brendan Howlin (Wexford, Labour)
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Question No. 15.

Seán Sherlock (Cork East, Labour)
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You could not be up to them.