Joe O'Toole (Independent)

I welcome the Minister to the House. This is an issue close to his heart and I know that he has been openly committed to what we are doing here. This legislation is welcome and while we have tabled amendments, this is a serious attempt to open up the debate. I hope he will see his way to meeting our point of view on the Bill.

Since the debate last week on Committee Stage, I put some of the points that arose to those working in the industry and others. It is important to put those matters clearly on the record. In his statement, the Minister of State said that we must remain compliant with EU regulations and WTO guidelines on trade, which means that we cannot unfairly restrict imports. It is crucially important to recognise that nothing that we are proposing here in any way goes against either the EU regulations or the WTO guidelines. I think the Minister of State threw in a red herring at that point. As we understand it, the proposed amendments are fully consistent with EU trade guidelines and do not restrict imports unfairly or unduly. In addition, they have been proven to be WTO-compliant, as evidenced by their implementation in other EU member states. Both Germany and France import Brazilian ethanol, but not for fuel use. It is important to recognise that as a direct response to what the Minister of State said in his reply to the debate on Second Stage. He also said that the amendments from us largely suggest that Ireland should mimic the fuel standards in place in other member states, including Germany and France, which serve was an effective barrier to outright competition.

Essentially, the Minister of State was saying that there are two separate tariff codes - one for denatured or industrial, and the other for food grade or agriculture. One is significantly higher than the other. It is important therefore to recognise the impact of what we propose for price increases. The Minister of State was a bit disingenuous, but I will not go any further than that. He said the latter is significantly higher at 19.2 cent per litre versus 10.2 cent per litre. Someone who was not listening closely would come to the conclusion that what we are proposing would increase the price by 10 cent per litre. To put this in context, however, it should be explained that bioethanol will constitute only 5% or 10% of petroleum blend, whether one goes on the E5 or E10 regulation. Putting it all together, with the difference between the existing and proposed tariff, the equivalent price increase to the consumer, if any, would be less than 1 cent per litre either way. That is crucial to our argument. When we come to a conclusion on all of this and have put it all together, we need to be sure about what we are doing. Let there be no doubt about it; there is no evidence from other EU markets, which have implemented the 19.2% duty on the 2007 tariff code, that there is any impact on pump prices. If we are wrong about this, I would like the Minister to revert to us on it. We are putting these amendments forward in good faith, having undertaken research, including talks with industry representatives and others.

I do not think the Minister of State was fair in his response to us concerning his points on compliance, guidelines on trade, and the cost per litre. He also said the European Commission would have to be notified under the 1998 directive, as this type of initiative would be deemed a technical regulation. There is no doubt about that. However, notifying the European Commission of the change in a technical regulation is no more than a formality. If it is more, we should know. The European Commission is, and has been for some time, familiar with the German scheme and with similar schemes in many other member states. Therefore, it is a distraction to introduce this argument.

I am disappointed with the response of the Minister to the three points I have made. I know the Minister a long time, but this seems a completely defensive response. We did not put our amendments forward in order to have a go at the Department or the Minister. They were put forward in good faith. The Bill is a good one and helps us move forward in a progressive manner. However, this House examines legislation, sees what is good in it and makes suggestions. I had hoped there would be openness towards our suggestions. Where we see problems with issues, we suggest another look should be taken at them. I will certainly evaluate closely the response from the Minister.

The Minister said that from a national perspective the only substantial problem with the course of action proposed is that the United Kingdom has not adopted such a measure and given that we import 60% of our road transport fuel from the UK, such a measure would have the potential to increase costs to Irish consumers substantially as they would have to be supplied with a different blend of bioethanol. That is probably the most challenging of all the points made. I would like to put on record the industry's response to us on that. If what I say misleads the Minister or the House, please correct me, because we put forward our amendments in good faith. I recognise that this is a technical issue, but the reference to the UK as not having adopted this measure is misleading and does not pose an issue as inferred. Indeed, it demonstrates a lack of understanding in differentiating between two very different products, sourced from different parts of the world and technically handled in very different ways.

Most Brazilian fuel ethanol is transported to Europe in bulk tankers in an undenatured state. Normally, it is only denatured at the point of receipt into the member state to benefit from the lower tariff and technical requirements. Most of it is brought into Rotterdam and subsequently broken down and then distributed across Europe. Best practice recommends that blending takes place as close as possible to the point of distribution. Hence, the point of blending tends to be the destination member state. Currently in Ireland, bioethanol blending usually occurs at the point of receipt in the bond - whichever bonded facility it goes into. With regard to petroleum, we currently import approximately 50% of our requirements from the UK, 35% through Whitegate and the balance from Scandinavia, through Derry. We have been reliably informed that all the oil majors in Ireland will have blending capacity and undenatured ethanol at their facilities by the end of the year. This has been confirmed separately to me as being correct. Topaz, in Whitegate, already has full capability. Even if oil companies opt to blend in the UK or mainland Europe, these are pan-European suppliers that already supply some member states with a product similar to the Irish specified product. All that matters is that the bioethanol coming into Ireland satisfies the definition under the bio-fuels legislation, which must comply to Taric code 2207 1000 and EN 15376. I want this on the record because when the Minister of State came back to us on the points we raised, he did not deal with the issues.

What I am doing here is coming back to the Minister on the issues. I believe everything I have said is technically correct. I am relying on other information, but I have tried to confirm its sources and believe it is true. If it is true, it confirms what I said last week, namely, that what we propose has many attractions, for the Minister and the State. It increases tax revenue to the State, is a boost for the agricultural industry, leads to carbon dioxin capture and therefore reduces our need to offset or invest more money in offsetting. I recall that before the Minister came into office, he took a strong view against the provision in the 2007 budget for the €270 million being put aside for offsetting. I agreed with him at the time and said that here. Another attraction is that the measure creates employment in various parts of the country and provides support for the agricultural industry, rural development and various processing facilities, including the one in Waterford-Kilkenny. The arguments against it do not stand up.

The Minister of State made an unusual statement. He said he would listen to our arguments and try and bring some measures forward to meet our needs. That was a positive response. However, it was not very positive of him - we found this difficult to understand - to say he would not do that until Second Stage in the Dáil. I am now aware amendments can be introduced on Second Stage. The Seanad is the anvil on which the arguments have been hammered out. Therefore, we should mould, shape and conclude the Bill here. We need to bring the argument to a conclusion now. If the points I have raised are incorrect, we need to argue the case again and come to a conclusion on it here. We can do that on Report Stage. I do not feel the need or desire to bring this to a vote here, because the House should not divide on the issue. We should convince each other through argument and through providing plausible and cogent responses to each other's positions and in that way find a compromise position.

I do not want us to be arguing about the issue. I want the Minister to recognise that what we have said was said in good faith and to respond to it as positively as he can. If there are reasons what we propose is in some sense bad for national policy or not in compliance with national or international policy, or WTO or EU regulations, let us hear that and then let us deal with the issue again. In the meantime, I urge the Minister to accept our amendments or agree to bring forward similar ones on Report Stage. We put them forward with the best of intentions to support what is good and important legislation. I look forward to a positive response from him.