Seanad debates

Tuesday, 9 March 2010

Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010: Committee Stage (Resumed).

 

1:00 am

Photo of David NorrisDavid Norris (Independent)

I also welcome the Minister. The Minister of State, Deputy Conor Lenihan, and his advisers did a good job when the Minister, Deputy Ryan, was not here the last day, but it is particularly important that the Minister with direct authority in this area be here.

The Minister is highly intelligent and diligent so I will not rehearse all the arguments. I imagine that either his advisers have acquainted him with the arguments made or he has read the debate. It was quite technical and some of us spoke at considerable length. The point was generally agreed by both the Minister and his advisers and by all parties in the House - which is important - and there was a general consensus that we had won the argument. The only obstacle was a technical difficulty. As Senator Walsh has said, we wish to work together in this regard.

The arguments revolve around two issues, the first of which is Irish jobs. It is important we maximise the capacity to produce employment. The other is the impact on the environment, both domestically and, to a smaller extent, in countries such as Brazil. I will not go over the arguments again. I was obliged to leave the House to take a telephone call so I hope I am not reiterating too much of what has already been said.

I accept the good will of the Minister of State, Deputy Conor Lenihan, and of course the Minister for Communications, Energy and Natural Resources, Deputy Ryan. In what I say I am not implying any malign intention, but it does appear that some of the statements, especially in light of the briefings we have subsequently received, may have unintentionally misled. For example, the amendments are in fact completely consistent with trade guidelines for the EU. They do not unduly or unfairly restrict imports. The provisions have been proven to be WTO compliant, as evidenced by their implementation in other EU member states. During the previous debate I and other colleagues read a list of the other European states, of which there are at least eight, that already have such provisions. I also put on the record the fact that an international committee was established with representation not only from the United States and the EU countries, but also from Brazil itself, and it was positive in this regard. I do not see where there could be any objection. Germany and France import Brazilian ethanol, but not for fuel use. In 2009 Germany imported 4 million litres of undenatured ethanol from Brazil.

The statement that suggested there might be a price hike at the petrol pump that would be unwelcome to Irish consumers could also be held to mislead. This must be put into context. Bioethanol will constitute a 5% or 10% petroleum blend - E5 or E10 - and the difference between the existing proposed tariffs is 9 cent per litre. Thus, the equivalent price increase, if any, to the consumer would be 0.45 cent and 0.9 cent per litre for E5 and E10, respectively. There is no evidence from any other European markets, following the introduction of exactly the same kind of tariff legislation, that there was any jump in price at the petrol pump. This argument needs to be ruled out. I am not suggesting any malign intention, but I suggest there is likely to be no impact whatever at the pump. The main driver of petrol prices at the pump, in any case, is the international oil price.

The notification to the European Commission of the change in the technical regulation should be just a formality for the reasons I have mentioned. There is a suggestion that this might be a diversionary tactic by the Minister's Department. I am sure this is not true. Everybody in this country is seeking the creation of jobs. I would like to ask specifically, if my colleagues have not already asked, whether the notification has already been submitted, because there are lead times involved. In addition, there are a whole series of arguments about the United Kingdom not having adopted this measure, but these are also unrealistic and I am sure the companies involved have already made this clear to the Minister.

I believe we won the argument on Second Stage and there was general agreement on the issue. The Minister signified he would consider the meaning of the amendments, but at a later stage. Senator O'Toole has dealt with the question of whether it would be technically possible or appropriate to introduce it on Second Stage in the Dáil. My colleagues and I have worked hard on this and it would be appropriate for this to be done in the Seanad, which is possible.

I know there must be formal notification. The problem is the regulation must rest with the European Commission for three months and other member states have an opportunity to object, which might cause another three-month delay. The process has already been delayed from 1 January to 1 July, which is approximately six months, and a further delay would have serious consequences in possible loss of employment and a possible closure of the firm, which has a capacity to deliver. That would be a disaster. The excise relief is running out under the mineral oil tax, MOT, scheme II. The bio-fuel obligation must be put in place no later than 1 July 2010, as indicated by the Minister for Communications, Energy and Natural Resources already.

I am serious about this and will table an amendment on Report Stage which might resolve the issue. I would be very happy for the Minister to introduce it. Very often in legislation passed by this and the other House, there is the equivalent of the unenumerated constitutional rights. We have a broad outline of the Bill and we also have reserve powers of the Minister to introduce further measures by regulation. That means the Bill can be passed but we make clear that the power to make regulations is implicit in the Bill, setting out certain quality standards that might be applied. Once the Bill is passed, we should draw up a statutory instrument setting out the requisite standards and present that to the European Commission under Directive 98/34/EC. That would allow the changes to made, as requested, on Committee Stage and also allow the Bill to proceed as planned.

The Minister should respond directly to that technical measure. Will he accept that kind of amendment or will he introduce it on Report Stage? This meets both requirements of the European Commission and the urgent necessity for the Bill to be passed in a form that makes the necessary changes allowing for the development of this important industry. It would also allow the possibility of perhaps 1,000 jobs in what is an economic blackspot.

There are two questions for the Minister. What is the current state of play with regard to notification and has this already been submitted? The Minister has already agreed that the arguments in the Seanad have prevailed so will he accept an amendment in the Seanad on Report Stage which will allow the Minister to make the appropriate changes by regulation and the creation of statutory instrument?

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