Tuesday, 9 February 2010
Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010: Second Stage
Martin Brady (Fianna Fail)
Senator O'Reilly has covered many of the issues I wanted to raise. I will make a few general points. The potential gains associated with bio-fuels were recognised by the Minister for Communications, Energy and Natural Resources in November 2009 when he announced the bio-fuels obligation for the industry. When the Minister made the reduced reliance on fossil fuels argument, he said that over €6 billion is sent overseas each year to import fossil fuels. As Senator O'Reilly said, that figure is likely to increase in the future. The Minister said at that time that access to an alternative energy supply is vital to provide security, particularly in light of Ireland's vulnerable position. He advocated the bio-fuels obligation approach that is being taken in this Bill. He argued that this measure will provide a guaranteed market for the bioenergy sector. He also said that our forests and farms will be able to provide the fuel of the future through the new scheme. That will help us to reduce our carbon emissions and thereby tackle climate change. These goals have been echoed by an EU Commissioner, who has said the growth in greenhouse gas emissions from the transport sector, which was mentioned by Senator O'Reilly, threatens to cancel out savings made elsewhere. He has contended that increased vehicle efficiency, coupled with the move towards vehicles powered by renewable energy including bio-fuels, has the capacity to make a big difference. He has also referred to the potential of bio-fuels to contribute to employment in rural areas and to the scope for research and development, in terms of second generation bio-fuels. As Senator O'Reilly said, it is important to be conscious of the importance of domestic bio-fuels production too.
I would like to speak about the food versus fuel argument. In January 2008, maize prices increased by 300%, wheat prices increased by 127%, rice prices increased by 170%, and vegetable oil prices increased by 200%. It needs to be recognised that such price increases were caused by various factors. The World Bank has argued that the most important factor was the large increase in bio-fuel production from food stocks in the European Union and the United States. When considered alongside the depletion of stocks as a result of the production of bio-fuels, the contribution of other factors, such as poor yields and bad crops due to drought, to price increases would have been moderate. In the US, the increase in fossil fuel energy costs, which feed into agriculture production costs, accounted for between 15% and 20% of crop prices. The food versus fuel debate was to the fore in a recent Seanad motion on the proposed bio-fuels obligation scheme. Senator O'Reilly mentioned Teagasc's estimate that up to 100,000 hectares of land could be used for bioenergy crops without damaging, interfering with or putting at risk our food production targets. Even if Ireland could produce bio-fuels without damaging food production, it is important to remember that this is a global issue. It is possible that some of the imported bio-fuels will come from areas where food production is displaced.
The European Union's energy import dependency is forecast to reach 64% in 2020. That is why the Commission is doing all it can to improve EU levels of energy-efficient renewables, including bio-fuels. Energy efficiency is one of the least costly ways of reducing our impact on the environment. The use of renewables, including bio-fuels, is seen as an important means of increasing energy security, diversifying our energy mix and using locally available clean sources of energy. Greenhouse gas emissions from the transport sector are increasing rapidly. This growth threatens to cancel out the savings being made elsewhere. On present trends, transport will account for more than 60% of the Union's increase in carbon dioxide emissions between 2005 and 2020. At EU level, there are just two policies with the capacity to make a difference to this trend. We must strongly and simultaneously promote both improvements in vehicle efficiency and vehicles powered by renewable energy, most importantly bio-fuels. Such developments can contribute to employment in rural areas in the EU and in developing countries. They can offer scope for technological developments, for example in second generation bio-fuels. A renewable transport fuel obligation has been in operation in the UK since April 2008. The Irish Bioenergy Association has cited evidence that the UK scheme has led to the importation of 89% of bio-fuels used in the UK. It further claims that the certificates issued in the first year are now worth just 6p per litre. The conclusion reached is that there is a future for sustainable bio-fuel production. However, feed stock production must avoid exploiting land which otherwise would be used for food production. If the land use change is not checked, there is a concern that it will reduce biodiversity. It has been suggested that it even has the potential to cause, rather than reduce, greenhouse gas emissions. Irish farmers will not grow bio-fuels unless it is financially attractive for them. I am glad a scheme of grant assistance along those lines has been announced in recent days. That is very good news.
I am sure the Minister will clarify the various points, as he always does. This Bill is necessary, as Senator O'Reilly said. If the points for clarification are taken on board, the Bill will satisfy and meet the requirements of all concerned.