Tuesday, 9 February 2010
Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010: Second Stage (Resumed)
I welcome the Minister. This is a good Bill and the Minister is going about this in the right way. I note the target is to have 10% renewable by 2020 which would include renewable electricity in terms of electric cars for transport in Ireland. I was disappointed to hear Senator Quinn state the green movement uses fear. Neither the Minister nor I is involved in that. We are not about fear. I note the Minister repeatedly——
The Minister constantly asks for all sides of the House to come together on energy policy because it is so important for the nation. Transport policy in particular is a very difficult issue for us to resolve from the point of view of energy security for transport. It is great to discuss the free availability of diesel and petrol. In the 1970s, when I first got interested in politics, the issue which first drew me into the Green Party was that of peak oil. I remember the oil crisis of the 1970s when we could not go to school by car because we did not have fuel. This was to do with OPEC and other countries refusing to give us oil. There was an embargo on oil and I have spoken to various people in Cuba about the embargoes they have suffered and they have had to come up with interesting ideas. Senator Quinn mentioned Brazil, which has a deliberate policy of using ethanol. Brazil has large tracts of land where bio-fuels can be easily produced, and they have been doing so for a long time.
Our transport fuel is not secure. Almost all of our transport fuel is imported and there is no guarantee that this will continue forever. In fact, there is a guarantee that it will not continue forever. The need for transport fuel will become increasingly difficult. Quite often, people confuse the issue of climate change with that of peak oil. The peak oil issue is about future energy security. If the oil tap was turned off tomorrow, I do not know exactly how long the country's existing economic structures would survive but it would not be very long. This is a possibility. I may be using fear now, but this is a very real situation.
We do not have control over our own fuel sources. It is important that we find alternative fuel sources to help us in emergency situations to be able to provide a certain level of security, in particular for transport. If we considered it strategically, indigenously produced bio-fuels would help us to have a certain level of transport in difficult times.
When I first became a member of Galway City Council, somebody mentioned that vegetable oil was blocking up the sewage pipes because various chip shops were pouring the waste vegetable oil down the drain. I proposed the solution of creating a market for it, turning it into fuel and running our council vehicles on it. The response I got from almost every councillor was guffaws and that it was an absolutely ludicrous solution.
I thank the Senator for his kind interjection. It is now a few years later and Galway City Council vehicles have 5% bio-fuel. Waste vegetable oil in the city has been converted into bio-fuel. A waste product has become a bio-fuel and is useful. It is hoped that it will be increased to 10%, which is in line with the Minister's target. I hope we exceed that target before 2020.
I received a very interesting policy document from Fine Gael entitled Rebuilding Ireland A "NewERA" for the Irish Economy. I could consider this from a party political point of view but, like the Minister, I believe it is important that we welcome what is in the document. It is a good document and one which Deputy Enda Kenny constantly quotes with regard to 100,000 new jobs. One of its key points is on bio-fuels and a large section of the document is on this issue. This is a document from an Opposition party so it is not only the Government that is pushing this forward. The 100,000 jobs would come from bio-fuels and other areas such as smart meters, wind generators, broadband, renewable energy, water and greener homes. What is startling is that this is the green agenda and the Minister, Deputy Ryan, is leading the way on all of these matters.
I have a difficult with one area of the document which states: "From 2013 to 2015 we would phase out the sale of regular diesel from Irish forecourts with an aim of having only biodiesel available for purchase from 2015." That is very laudable but in this Fine Gael suggests replacing 2.3 million tonnes of diesel with 150,000 tonnes of biodiesel and this is obviously an impossibility. In the short term we cannot replace all of the diesel in the country with biodiesel and, unfortunately, the document contains a mistake in this regard. However, the general sentiment is that we need to move towards a decent level of bio-fuels and renewable energy.
The green agenda is very important. When I was growing up in the 1970s we spoke about the Hubbert peak, which is now known as peak oil. This country has eminent people who are experts on peak oil. Peak oil means that worldwide demand for oil exceeds the amount that can be produced and there is not enough oil to meet demands.
The worldwide economic crisis was not due to the collapse of Lehman Brothers but the price of oil. It is clear to me that the price of oil shot up to more than $100 per barrel because demand was increasing exponentially to the point at which it could no longer be met, with the result that we experienced a great economic collapse. Economics works according to the simple law of supply and demand. People do not realise how the price of oil penetrates society and economy. I have spoken to schoolchildren as part of the green flag programme. The fleeces they wear are made from recycled oil-based plastic bottles. Until recently, they were produced in Ireland. Fertilisers are also produced from oil. I would not be surprised if many of the materials used in this Chamber were produced from oil. All plastics and most chemicals are oil-based.
This country does not have an indigenous supply of oil and, while it is possible we will discover one, it will be a non-renewable resource. I cannot understand why we spend all our time discussing people like George Lee when we should be jumping up and down in alarm at the small proportion of our energy supply which comes from indigenous and renewable resources. We have great potential in that regard.
I commend Fine Gael on its document, Rebuilding Ireland: A "NewERA" for the Irish Economy. An all-party approach would help to bring about the certainty we need in our energy policy. It is incumbent on us to work together because the future of the economy depends on it. I do not claim bio-fuels alone will bring us out of recession but energy security will be one of the key ingredients in our recovery. I commend the Minister on his efforts in this regard. He is getting on with the job Fine Gael proposes to take up. He is in the House on a regular basis to debate the Bills he has introduced.
I welcome the Minister. In recent times we have held a number of debates on aspects of environmental policy, the pros and cons of governmental proposals and, as Senator Ó Brolcháin noted, submissions from Opposition parties. However, the Bill before us deserves closer scrutiny. We rely on expert advice on most issues. In researching material for my contribution I studied a submission from the Irish Bioenergy Association. I imagine the Minister has already considered that association's recommendations but I wish to outline them for benefit of the House.
There is no doubt we are overly dependent on fossil fuels and need to encourage bio-fuel production, not least in the light of the employment generated in rural areas. The production of bio-fuels can help to kick start economic activity in rural areas. With insight and strong support from the Government, we can rebuild the rural economy by this and other means, including marine activity.
Noting the resemblance of the scheme provided for in the Bill with the one in place in the United Kingdom, the association expressed its concern that it might not be workable. According to its submission, 89% of the bio-fuels used in the UK market are imported, primarily from Brazil and Argentina. I have previously discussed, in the context of overseas development assistance, the impact of bio-fuel imports on developing countries.
We must also be mindful of the scheme's impact on the consumer. We saw the immediate effect of the carbon tax in terms of the price at the petrol pump for petrol and diesel. This is a very car dependent country because, unfortunately, our public transport system is not at the level where one could, for example, take the train from Cork city to the Beara Peninsula. In terms of further carbon taxes and levies, we must be mindful of people in rural areas who are on lower incomes or without jobs and who continue to rely on their cars for transport. The cost of any further obligations will be shared by everybody, although some sections of society have more disposable income and can take more of a hit than those already struggling to meet rent payments, mortgages and household bills. On the Order of Business last Thursday I raised the issue of the increases announced by permanent tsb to its interest rates. An increase of 0.5% means an extra €60 on a mortgage of €200,000. We need to be mindful that families are already struggling to meet utility bills, put food on the table and negotiate out of high mortgage repayments.
Road transport services depend on imported fuels for 99% of their needs. Some 70% of the bio-fuels used here to date have been imported.
When the Minister of State at the Department of Foreign Affairs, Deputy Peter Power, was in the House recently to debate overseas development assistance, we spoke about the impact of bio-fuels on developing countries. Too often an issue comes across as being straightforward at first but complications soon become apparent when it is addressed it in more depth. An example concerns bio-fuels and climate change. Oxfam has produced a report on Tanzania, where vulnerable groups are being forced aside to make way for bio-fuel plantations. Mtamba is one of several Tanzanian villages which skirt the 9,000 hectares of land in respect of which Sun Bio-fuels Tanzania Limited, a subsidiary of the British company, Sun Bio-fuels, is finalising an investment deal. The 11,000 people who live in the area use the land to produce charcoal, firewood and herbs for food and medicines. Significantly, the land allocated for bio-fuel production includes the swamp that offers the only source of water for the villages in question. It is unclear what will happen to this water supply as a result of the bio-fuel development. Will businesses making commercial investments in such schemes consider the implications for the people who depend on the land they plan to use? The evidence in every other developed country would suggest differently. Even in poor countries where bio-fuels may offer a new commodity and increased employment, the potential costs, including environmental damage, land displacement and diminished food and water supplies, are severe. That is an issue that will never be too far from a debate such as this. I urge the Minister to be mindful of the hard-pressed consumer, especially in today's climate when any proposed scheme with an obvious cost implication is being introduced.
I welcome the Minister and the Bill. We have had a useful debate. Senator Quinn, in particular, has highlighted many of the concerns people have. I sought a similar measure to the current one in an Adjournment debate in 2004. This measure was mooted in previous Finance Acts but now it is being put into legislative form. Since that time, there have been changes in the bio-fuel sector. I was extremely enthusiastic about starting up an indigenous bio-fuel industry. The potential was evident, especially in rural areas. However, at that time we did not see the downside, which has been alluded to by several speakers in the context of developing countries, for example Brazil, where the rush to provide space to grow the crops has had a detrimental effect on the environment and climate. That is why we need to be careful. It is not reason enough to stop progress in this area but it is reason to cause us to reflect. That is why I was glad of Senator Quinn's contribution in particular. I understand why the Minister said the subject terrified him somewhat in that there was much alarmist talk. When one is not an expert one can rely heavily and quickly on any scientific information to back up one's opinion. However, Senator Quinn made a fair point about some reservations. As we move towards growing a bio-fuel sector, we need to be cognisant of the lessons we can learn from the first generation bio-fuels to the more functional second generation bio-fuels.
Senator Quinn made a valid point about the absolute or true costs, environmental and otherwise, of producing bio-fuels. We should also be mindful of the additional cost of having bio-fuels transported to this country. That is something that is sometimes overlooked and of which we need to be cognisant. Other speakers referred to the development of an indigenous bio-fuel industry. We would all prefer to see that. Previous speakers spoke about the difficulty of ensuring that the benefit will accrue to the industry in this country and provide opportunities for farmers, whom I see as being agricultural or environmental entrepreneurs. There is great scope for diversifying the traditional agricultural sector. We should not be in the business of protectionism and I accept it is not easy to build certain mechanisms into legislation so as to ensure the benefits might accrue to the indigenous sector.
Senator Quinn made an interesting point about biomass and energy efficiency in terms of turning it into liquid fuel. He suggested we should focus on how to use biomass to generate electricity in power stations. As Senator Ó Brolcháin indicated, 10% of transport fuels are to come from renewable sources. Everyone thinks of electric cars as being environmentally sound, but they are not. It depends on how the electricity is generated. If it is generated through energy efficient means, not through the burning of fossil fuels, then it is greener fuel. He also referred to nuclear power, its sustainability and whether it is environmentally sound. We should have a debate on nuclear energy. The Minister is keen to have it. I am interested in seeing more power stations being fuelled by biomass. If we choose that option we will arrive at a greener target. I speak in the context of the whole cost of producing the energy.
By 2020, a total of 20% of electricity generation will come from renewable energy. Much of that will come from electric sources, such as electric cars, but we should ensure that the electricity is produced in a green way, such as wind or the burning of biomass. We tend to overlook certain issues when we all jump on a bandwagon because we think something is a good idea. Senator Quinn in particular mentioned that the burning of biomass for liquid fuels is not the most energy efficient way to produce energy. We should be careful to ensure that whatever incentives are provided to help us achieve our targets on renewable energy, that they do not end up having unforeseen negative consequences. I welcome the Bill.
I am often surprised that people have not taken to dimethyl ether, DME. I am pleased the Minister, Deputy Ryan, is nodding. I have spoken to him previously about the matter. DME has not reached the mainstream yet. In five years we will all be talking about it and we will all see it as a new, cleaner, energy efficient source of power. It presents enormous potential in this country. I hope we do not end up putting into legislation something which we will no longer need in the future. DME will become far more mainstream in a way that bio-fuels were approximately ten years ago. DME will provide us with a green, energy-efficient way of sourcing fuel. It would be regrettable if we ended up tying ourselves in knots because of legislation we have enacted. The green economy is in good hands in the hands of the Minister, Deputy Ryan. I welcome the Bill and look forward to what I hope will be its swift passage.
I ask the Minister to excuse my hoarse voice as I make my contribution. I hope he can understand what I am saying. The contributions to date have been interesting and wide ranging. I listened with interest to the Minister's party colleague, Senator Ó Brolcháin – I hope my pronunciation is correct – give us the example of the oil being used as a fuel by Galway City Council. The Leas-Chathaoirleach will be aware that possibly the first person to use a waste oil product in a vehicle was the former Cathaoirleach and Leas-Chathaoirleach of Seanad Éireann, Charles McDonald. Another former Senator who owned a number of chip shops in Cork city was thought to be one of the suppliers of the waste oil to Senator McDonald in the late 1980s and early 1990s. Most of Senator McDonald's colleagues thought his proposal for running his second-hand Mercedes on chip oil was daft but the vehicle brought him regularly and safely from County Laois to the House and, therefore, he was a pioneer in that respect. The legislation is welcome, and as Senator O'Reilly said, in his usual fashion of fine prose, Fine Gael supports the legislation but we have a number of questions. The most significant issue relating to the Bill is how to generate the maximum volume of bio-fuels from domestic resources. In other words, how can it be ensured available land will provide the maximum volume of bio-fuel? When the former Fine Gael leader, James Dillon, served as Minister for Agriculture he recalled a famous saying about the expansion of agriculture production in the 1940s: "One more cow, one more sow and one more acre under the plough". It was a simple slogan that worked. We must ask how we can put more acreage into bio-fuel production.
Senators Quinn, O'Malley and others highlighted the food versus fuel debate, which is interesting. Fine land is available for agriculture production. However, as a result of set aside policies imposed by the EU or farming practices in some parts of the country that are not as good as in others, a substantial amount of land is not fully utilised and it could be diverted to bio-fuel production without affecting food production. It will be necessary for the Minister to engage in a detailed dialogue with his colleague, the Minister for Agriculture, Fisheries and Food, in advance of the serious negotiations that will shortly commence about the future funding of Irish agriculture via the Common Agricultural Policy and related programmes and to try to ensure maximum assistance will be available to encourage farmers to grow energy crops.
The excellent document, which all of us received from the Oireachtas library and research service, outlines the background to the Bill, various ideas and interesting statistics on elephant grass and other energy crops. However, solutions are available and they can be applied to lands in Ireland provided the Government can get the financial equation right. The sugar beet industry was shut down a number of years ago. Ireland produced sugar from the early part of the previous century and, tragically, five years ago the Government made a decision in conjunction with the European Commission to shut down the sugar industry. There was a great deal of hope, expectation and optimism that sugar beet could be used effectively as an alternative crop to produce bioethanol. The people of Mallow and Carlow had hoped the disused sugar factories could be used for the production of energy. Sadly, that did not come to pass but a number of people have ideas and proposals. I presume they have been in contact with the Minister and his Department but we must try to encourage them. Ireland was able to grow top class sugar better and other fodder crops which can be used for bio-fuel production.
The Government has not given sufficient attention to this option over the past two or three years and it is important the Minister liaises with the Minister for Agriculture, Fisheries and Food to see what options exist. The domestic agriculture industry faces enormous challenges. Farm incomes have reduced significantly, dairy prices have almost fallen through the floor while tillage prices have been disastrous. Huge challenges face Irish farmers but, at the same time, there is a need to produce energy crops. It would be nice if these two problems could be examined to marry them into a solution. Significant funding is available and I make this point regularly when speaking to farming groups. The EU continues to be the best friend of Irish agriculture. It has a significant funding commitment to Ireland, which will be maintained into the future. There may be adjustments but we must ask ourselves how we can use the funding to keep farmers farming and the land productive. We must observe our food obligations from a food security perspective but a significant proportion of our land could be used for energy crop production and the Minister will have to give a lead in this regard.
I welcome the Bill in that it will not only serve as a stark reminder to energy providers but it will also place a stark obligation on them to produce bio-fuels, which is a positive first step. The second step from a domestic and rural perspective is to ensure energy crops are produced on our land. The technology, land, farmers and machinery and history of bio-fuel production are in place but a further push is needed. It would be disappointing, as previous speakers said, if the 4% obligation was entirely met by imports. Some years ago, a biodiesel plant was proposed for north Cork and one of the major objections was the fear that the vast majority of product required to refine the biodiesel would be imported and not produced locally. The challenge we face in the legislation is to ensure maximum domestic production.
We will debate these issues further on Committee Stage. The Minister's key challenge is his work with the Minister for Agriculture, Fisheries and Food to put the grant structure in place and I look forward to that debate. I wish him well with this important and necessary legislation. It is doable but domestic production must be kept at the top of the agenda and if we manage to do that, we can turn this legislation into a win win. Not many Bills like this come before the House. Generally one side wins while the other is defeated or makes concessions. This legislation is win win if the Minister strikes the correct balance to meet our obligation while maximising bio-fuel production on the land, which will be good for the consumer, the farmer and the environment. I look forward to the Minister's work in advancing that set of aspirations.
I welcome the Minister. I am not an expert on bio-fuels but a group of us on the British-Irish Interparliamentary Body examined energy issues and the opportunities that are there for Ireland which is so dependent on new ideas for enterprise and employment. There is great potential to retain and create jobs in the agriculture and energy industries through the green agenda. Toyota is having difficulty with new technology in the Prius car. Such new hybrid cars and the drive for new ideas in the car industry is counteracted by small glitches that have nothing to do with the technology. In the case of the Prius, I heard someone earlier say the issue was a sensitive brake pad as opposed to anything structural in the car. It is not a vote of no confidence in the new technologies. It is important for us to keep saying this to give people the confidence to think about the new alternatives and try to ensure they are moving to cars that are more sustainable in environmental terms.
A few years ago we were up at Gilliland's farm in Derry, a place I have driven past and been driven past since I was tiny. My grandfather lived about 200 yards across from that farm. However, it took a committee visit of the British-Irish Parliamentary Assembly for me to realise exactly what was happening there. Human effluent is taken from Derry City Council, or the wider region, and injected into the soil to grow willow and miscanthus. To be there physically and watch is interesting because one would assume the process involved smells and so on. The young willows absorb the effluent and grow very high, around nine feet in a year, after which they are cut down and the plants begin to grow more like bamboo. Thus, one can see them evolving into the material that will become woodchip pellets. When I left the place after an hour and a half, I considered the process. The willow, which is a very slight plant, goes through the process of this field versus that field and is then taken into the barn, in which the energy to power the house and the visitors' centre is generated.
The point that was made by the experts at that meeting, when we asked how we could persuade people to move away from oil, peat and coal to energy sources such as wood pellets, was that it was not very economical. If there is no market one cannot sell to the market. In the absence of a critical mass, costs are high. However, I welcome the announcement yesterday by the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, of a new bioenergy scheme under which grants would be available for the planting of willow and miscanthus over the period 2010 to 2012. There was a scheme in 2007 which supported 2,500 hectares. It is welcome that we are now in a position to put another thousand hectares under the scheme in 2010. The establishment grant is €1,300 per hectare to cover 50% of the cost of establishing the crops.
The message we got when we went to Gilliland's was that this was the only way forward. The area needs help and subvention. However, a constant learning curve is also required. We keep saying that schools are the places where everyone will learn everything. However, we must continue to make people aware that there are new ways of doing things and new opportunities.
There was talk recently about the development of wind energy. Nobody knows better than the Minister that there is plenty of air — and hot air — in County Donegal. We heard the recent announcement about Killybegs. From the moment the group concerned came together with the concept of pairing windmills with reservoirs — the windmills will have reservoirs for storing electricity — many people have been coming to me asking how they can get planning permission for windmills. Some people like them and some do not; there are those who do not mind them on land and those who would rather have them out at sea.
There are people in my area, of whom I am one, who objected to the concept of developing the Tunes Plateau as a wind farm at the time it was suggested, although the project seems to have gone to Neverland. If it arrives on the Minister's desk, which it probably will not because even though the Foyle is under joint jurisdiction it seems the Crown Estate can do what it wants when it comes to giving out leases, I ask him to remember that there are other good locations. We do not need to stick any windmill into the middle of the Foyle. I asked what would happen to the greatest salmon fishery in Europe if it was allowed to proceed and I was told the smolts could have great sport swimming around the bases of the windmills. There is many a true word spoken in jest, but although the people concerned thought it was funny, very few of us thought it was funny at the time.
There are many people who are interested in driving change and we should be encouraging them. A large conglomerate of interests have met with the Minister for Communications, Energy and Natural Resources and the Minister for the Environment, Heritage and Local Government, as well as many members of our parliamentary party, in this regard. We should be doing as much as we can to support them. However, the question is raised of the current status of the grid. We are trying to drive new thinking in the area of bioenergy. A person might come to me saying he or she intends to build a new house with a wood pellet boiler and avail of the supports available, but there is also a river beside the house and he or she wishes to set up a mini-hydroelectric facility. However, when one asks how this can be connected to the grid and whether credits can be given to the householder, the situation is unclear.
We considered this at the British Irish Parliamentary Assembly. Ireland is an island, but there are two different jurisdictions from an energy point of view. The electricity interconnector might go North to South in some respects but more needs to happen. We need a single grid or two mutually compatible grids. My understanding is that the two grids are currently not compatible. I was led to believe, in addition, that there was a strong need for an upgrade of the national grid so it can adapt to the new opportunities that are presenting themselves and that people are more than happy to take up.
Education is important if we are to persuade people to buy into this. The Bill before us is about obligations, which are seen by many as a negative concept. Until it is explained to people that renewable energy is ultimately in their economic interest as well as the interest of the environment, they will not be convinced. It is important that we provide as many facilities as possible as quickly as possible. An example is the idea of the electric car, which is no longer new. If I were in Dublin I would probably consider it on the basis that I would not be travelling many miles, but people from my region do not have a train service — there is no reason we could not have a Dublin-Derry train service because the line is there — and we need our cars. We must have confidence that if we leave Donegal to go to Dublin in our electric cars, there will be four or five recharging points in case we need them. We must know our electric cars have the same capacity as a diesel or petrol-driven car.
I wish the Minister well in his endeavour. As I said, there are good employment opportunities involved in making the country more economical and more environmentally friendly. There are many people who want to rise to the challenge. It is a question of awareness. The people who are becoming aware are energised and excited about the issue. I hope we can spread that excitement and enthusiasm around the country.
Cuirim fáilte roimh an Aire. I have remained in the House for many of the contributions on this debate and I read the Minister's speech, although I am sorry I was not able to be present when he was speaking. I found it a fascinating discussion and the issue is an important one.
I must confess I was scared by what Senator Quinn had to say. It seems there are no easy solutions in this world, even when one is trying to do good. Undoubtedly, the creation of a domestic bio-fuel industry is a desirable objective. The creation of this obligation will help us to move down that route. As I listened to Senator Quinn, I was glad that a man of integrity and someone from the Green Party was leading the Bill through the House. I do not doubt that the Minister takes seriously his commitments in terms of the need to protect the environment, source energy resources and work towards energy security. He also cares about global solidarity and would be careful in considering any possible unintended consequences. I will comment further in this respect. Senator Quinn's speech was stimulating. To some extent, most Senators must trust the Government in an area such as this, as it has research resources at its disposal to ensure unintended consequences are avoided, inasmuch as Ireland, a small country, can have an influence on the world stage.
My song writing talent was set in motion as I reflected on the strange acronym NORA, National Oil Reserves Agency. I thought of my late grandfather who used to sing the song "Nora", also known as "Maggie". I remembered one verse. in particular: "The violets were scenting the woods Nora, displaying their charms to the bees". It would be sad were that verse to end with the line, "But the woods were all cut down for biomass Nora, causing environmental degradation and food scarcity". As the Minister can see, I will not win any prizes for song writing, but this is the moral consideration raised by Senator Quinn, namely, that there could be unintended consequences in terms of environmental degradation, no net carbon emissions benefits, food scarcity and damage to indigenous populations. The Minister will answer these concerns in his summation.
I am happy to support the Bill which is a long overdue step in beginning to create a market for bio-fuels. If produced in a sustainable manner, bio-fuels have a role to play in reducing our dependence on fossil fuels, increasing our fuel security and, last but far from least, providing an income for farm families and employment opportunities for rural communities. This is not simply a matter of fashionable economic policy. Since the dawn of agriculture, farmers have grown crops to produce not only food, but also fuel and clothing from flax to cotton. The use of crops to power our transport systems is not new. The horse and humble donkey were powered by crops grown in Ireland for centuries. In this sense, we are reverting to a pre-fossil fuel age.
We all know that Ireland's current fuel use is unsustainable in the long term and highly risky in the short to medium term. We import almost €6 billion worth of fossil fuels a year. We are the last link in the long gas pipeline that brings gas from Siberia to Santry. Our use of fuel grew dramatically during the boom and transport accounts for a significant and ever increasing proportion of overall energy use. According to the Environmental Protection Agency, EPA, fuel consumption accounted for 27.8% of energy use in 1990 and rose to over 40% in 2005. The transport sector is dependent on fossil fuels. The 99% consumption ratio has been mentioned. According to the EPA, this has resultant impacts on the security of fuel supplies and exposure to oil price fluctuations. When we consider all of these matters, there is a powerful case to be made. CO
We must act to enhance Ireland's energy security, reduce our dependence on carbon emitting fossil fuels and move towards a sustainable future. I fully agree with the Minister that our forests and farms can help to provide the fuel of the future, reducing our carbon emissions at the same time. However, the Bill on its own will not achieve that objective. It will help to create a market but, without urgent action, that market will be supplied not by Irish produced bio-fuels but by imported stocks. Senator Quinn also raised this point. The benefits to the economy would be marginal at best. We should note that this has already occurred in the case of a similar scheme in the United Kingdom. According to the Irish Bioenergy Association, the scheme led to the importation of 89% of the bio-fuels used in the United Kingdom.
Importing bio-fuels means any benefit from reduced carbon emissions in Ireland would necessarily be negated by the increased carbon footprint generated in transporting the bio-fuels half way across the world. To quote my father, I am cutting stubbles, if the House will pardon the agricultural metaphor, in revisiting points raised by others. The importation of bio-fuels would do little or nothing to enhance Ireland's energy security. If the seas are unsafe for oil tankers, they would be no safer for bio-fuel tankers.
Having raised these caveats, I have no major problem with the Bill. I support it fully, as I do a mandatory obligation to create a market for bio-fuels. However, unless the Government also puts in place measures to encourage a significant increase in the production of domestic bio-fuels, the Bill will fail in its policy objectives. I am not considering the woodlands quoted in the song "Nora" so much as I am the significant areas of land not properly farmed or used. The hope is we could develop an indigenous source of bio-fuel in these areas.
The question will arise as to whether the Government has engaged in sufficient joined-up thinking and action, if the House will excuse these hackneyed phrases, to achieve what is required. We live on an island with one of the best climates in the world for producing biomass. We have strong competitive advantages in the production of winter wheat, trees and grass. The question is whether we will have a Government with the imagination and the will to focus not just on the PR dimension of the issues but to create a real bio-fuels industry.
Let me give an example of joined-up thinking. We know that hundreds of millions of euro are being pumped into research to convert cellulose into bio-fuels. Most experts agree that we should see a breakthrough to a commercial solution within the next five to ten years or so. Why not take steps now to encourage the large-scale production of willow and miscanthus-elephant grass in the midlands for burning in the area's power plants? In doing so, we would create critical mass — pardon the awful pun — of growers and supply such that when a commercial process is developed to convert the cellulose in miscanthus and willow to biodiesel, we would be ready to make the leap towards a new domestic fuel for transport.
If we are to have a sustainable bio-fuels sector, action will be required at European level to ensure the European Union's commitment to tackling climate change does not result in ecological and human devastation in poorer areas of the planet. I trust the Minister and his civil servants to think globally. I am not convinced that the measures contained in the Bill to ensure the sourcing of sustainable bio-fuels are enforceable. Ireland is so small as a market that we will have little impact on the global market. I hope our national tradition of solidarity with the developing world will influence European policy. The European Union is impressive as the greatest donor of overseas aid, but we need to ensure our vision permeates EU consideration of these measures in order that we can shape the world market to the point where it is sustainable and ecologically beneficial through united action.
Mar fhocal scoir, ba mhór an íoróin í agus ba mhór scanall é dá dtugfadh muid faoi cheist an fhuinneamh ghlan agus ghlas gan a chinntiú nach dtiocfadh sin salach ar na daoine is boichte ar domhan. Dá ndéanfaí damáiste don timpeallacht go háitiúil nó dá ndéanfaí damáiste do foinsí beatha, ba mhór an éagóir é sin. Ar scáth a chéile a mhaireann na daoine. Is fíor sin ar an leibhéal domhanda chomh maith le ar an leibhéal áitiúil.
The concept of the green agenda is fine until it is tested and it is in legislation such as this that we will test it. Interestingly, the Minister has said one of the objectives of the Government and other EU member state governments is to ensure there will be no adverse consequences for consumers, the environment or those living where the products needed will be grown or extracted. In reality, there will always be a clash somewhere along the line. Satisfying the green agenda may not satisfy the economic agenda and, in turn, how we produce bio-fuels. We even find that the Government has got involved in this issue because it often has had to forfeit revenue to drive the green agenda in terms of the use of bio-fuels. This was the experience of a plant in New Ross which makes biodiesel from waste products. As we know from the recent Finance Bill, the Minister wants to slap a carbon tax on biodiesel such as that produced in this plant in New Ross. In slapping a carbon tax on biodiesel produced here one will reduce the economic viability of plants such as this one. We can see, therefore, how measures taken in this area can clash. I am sure the Minister is aware of instances where major objections have been raised to the construction of plants which use biowaste to manufacture bio-fuels because the process involved creates its own difficulties. The process often involves the transportation of animal waste into a locality to make bio-fuels. One cannot keep everybody happy if one wants to improve energy security by using bio-fuel processes.
The issue highlighted by previous speakers of whether the production of bio-fuels is contributing to food scarcity is an international one. I do not know how much of an issue it is at national level. We have a large landmass that is not being farmed and would be available for growing elephant grass or willow trees that could be used in the bio-fuels sector. Therefore, we do not have a problem in that regard. Bio-fuel production is not displacing food production here such that it might contribute to an increase in world hunger. There is a lack of a clear Government commitment and policy on how to make the sector work. That is what is required, not the interim provisions we have had up to this point, which illustrate the ad-hoc way in which the sector works.
Those who have been involved in the production of green fuels have often found themselves bogged down in regulations. In some respects we are over-regulated. In framing this legislation I hope the Minister will not make that problem worse. I have had experience of this in County Wexford where a company has been producing bio-fuel from rapeseed oil for the past five years. The fuel is produced from an agricultural product and can be mixed or used on its own for transportation purposes. There were issues around the imposition of excise tax on this product from the beginning of the process which made it difficult to get production up and running. The plant I mentioned in New Ross does not use rapeseed oil, rather it uses waste material to make biodiesel. In that respect it is different but the end product is the same. It is a fuel produced in County Wexford either from agricultural products or waste material. In framing this legislation the Minister should consider its primary purpose — whether this is about energy security for Ireland, getting the sector up and running and minimising the number of regulations and volume of red tape to enable those who want to get involved in the sector to do so. That must be the primary purpose of the legislation.
We dress up this sector as being part of the green agenda but many say there are many reasons this may or may not be part of that agenda. In the overall context, there is an element of the green agenda and energy security about it, but if we really want to make the sector work, we should not kill it by over-regulation or the imposition of taxes at too high a level. The Minister should give us his opinion on this issue and indicate how he is trying within the Cabinet to influence the issue of taxation on these products. Carbon tax does not apply to oil produced from rapeseed but it will apply to biodiesel produced from waste biomass. They should be treated in the same way. We should consider not only the green agenda aspect of such production but also the energy security aspect. If we reach the target percentage where biodiesel and bio-fuels supply 8.5% of our energy needs, we could revisit that figure. The current production level is still very low.
The Minister should examine how we can produce not only bio-fuels from indigenous products but how we can mix fuels at local level. Very few companies are involved in this process. Initially, they encountered great difficulty in having their fuels mixed. They were competing with others who were supplying the same product outside the country.
We talk about air miles when it comes to destroying the environment but we should also consider fuel miles. It appears to be counter-productive to ship biodiesel and bio-fuels half way across the world as part of the green agenda when it is clear it is not part of it. We should try to produce these fuels as close as possible to the locations where they are used and the legislation should try to reflect this. I realise we are compelled by European legislation in terms of the way the process works but we should try to make it as easy as possible for these products to be produced, processed and used close to where they are produced. That may be somewhat more difficult for the Minister to achieve but it is the objective we should set.
I will be interested to hear the Minister's response to my comments. I have had a long association with the bio-fuels sector and the way bio-fuels are taking hold within the economy and the environmental agenda about which we are all talking, but I am also aware of significant problems encountered by producers. The first Minister of State with whom I discussed the issue was the former Minister of State, Tom Parlon, when he was responsible for the Office of Public Works. That is going back a long time. A number of difficulties remain within the sector, in terms of regulation and Government policy, which the Minister might help to address to make this a viable industry in the future.
I welcome the Minister and congratulate him and his staff on producing this very important legislation which I am delighted to see before the House. It confirms my view that, if the Green Party continues to push its own agenda, there will be recognition for and an acknowledgement of it at some stage, although I accept the electorate are not quick to do so.
Previous speakers asked if this legislation was any longer part of the green agenda. It is. The better that agenda, the more it will be grabbed by other parties. The Green Party has done a great deal in advancing this kind of legislation. While this is important legislation, as previous speakers said, we must examine the complete picture. In fairness, there is a trilemma involving the tension surrounding food production, energy security and the environment. Getting it right globally will be very difficult. I do not know all the answers.
I support this legislation, although I do not believe it is the most pressing of the environment issues with which we must deal but it is nonetheless important. With building regulations and other issues, there should be a requirement for every home in the country to have some form of renewable resource. There is a very vague requirement in current building regulations which allows people to get in under the net.
We are dealing with the replacement of fossil fuel energy with renewable energy, which as a starting position must be welcomed. Nobody can speak against that. How does that relate to other issues? Such action should also be welcomed with regard to dealing with emissions. The various plants or vegetation used to create bio-fuels are completely carbon neutral. This means the amount of carbon dioxide they release to the air is equal to the amount collected during their period of growth. Therefore, the process does not worsen in any way the balance in the atmosphere.
I would like to hear the answer to the following issue, which is a technical one. Recently, questions have been raised about nitrous oxide and the concern that nitrous oxide is being created by the use of bio-fuels. We need to know about that. I am slow to raise the matter because when we do not know the background of the people raising these issues, we could wonder if they are the same as climate change doubters. We need to deal with the issue effectively. These issues can gain legs if they are not dealt with early.
The Minister mentioned in his speech the mineral oil tax relief schemes and referred to them as interim measures. That is a significant problem. I have spoken to farmers and people in the fuel industry who have been dealing with the issue. They need certainty over a period of time. They must be sure that the tax or excise reliefs will be available for a certain number of years in order that a farmer can plan growth of the vegetation over that time in various parts of his or her farm. Similarly, suppliers can be set up to do exactly the same for extraction, mixing, selling, etc. That is an important financial matter that must be done right.
I heard Members speak earlier about electric cars, etc. I know the Minister's views, which are very solid. In the same way as this legislation is welcome, if the Minister came to the House next week with balanced requirements on a proportion of the nation's car fleet being electrically powered by a certain time, it would immediately provide incentive to an industry. There would be full support in the House and we could weed out those who did not give such support. We must explain to people how well this can work on an island. There is no better place in the globe than Ireland to test and prove the effectiveness of electric cars. Considering the distance north, south, east and west, the refuelling or recharging opportunities could make the process very easy.
There are always issues going in the other way. I have an example of a small matter which is counter-intuitive to the Minister's actions. Beside where I live there has been a bus service since 1920 and it existed before CIE was established. It was a small bus service that came from Cavan via a back road in north Dublin. It came from Kingscourt through the back roads of north Dublin and places like Ardcath, Clonalvy, Garristown and Ballyboughal. The Minister has perhaps never heard of these places but there was a bus service going through them, which has now been culled. This is for reasons we can well understand as only 20 or 25 people were using it every day. Nevertheless, this puts 25 more people back into cars or off the road. Hand-in-hand with what we are doing tonight, we should be insisting that the Green Party policy on public transport be delivered. The question of public transport is not only economic and financial, it relates to social infrastructure and how we see ourselves in our community and environment. The Minister should take a personal interest in these small bus routes which are being lost for reasons we all understand. I do not want to blame CIE or make a simple or cheap political point. I know the reasons but I ask the Minister to take a sincere and serious interest in some of the issues.
Many of these issues should be green proofed, as it were, by the Minister as they go through. There is equality proofing of issues and this should apply to issues in the context of the green agenda as well. If we are losing routes, we should initiate such a process. There are parts of public transport which are working really well and there is the exciting prospect of the western rail link finally coming into play shortly. I would like to hear the Government say that it wants to bring it to Sligo. We can hear from IBEC and those who would say what a bad idea that would be. This would create and force the debate. It is the only way to do it.
Part of this should be tied to the issue of carbon tax. There can be no argument against such a tax, which is a fair and progressive way forward. People may speak about the quantum and we can argue about that. Related to this is the issue of water charges. We should kill one idea stone dead. Nobody is proposing water charges because water is free. Anybody can get as much as they want with a bucket. Every time the Minister is on the radio and somebody mentions water charges, he should tell that person that nobody is proposing a charge for water. There is a proposal that considers the cost of water treatment and delivery as something that should be paid for by those who can afford it. A person with a swimming pool should not get the same amount of water for free as the person who does not. The same applies to people with four cars against those with one car.
We must keep the issues simple because they do not relate to principle. I had a mentor many years ago who told me that when he heard a person talking about principles, he felt for his wallet. When I hear people talking about the principles of issues such as water charges, I feel for my wallet. If the matter can be reduced to a quantum of money, it is not an issue of principle. That is a good rule of thumb.
I ask the Minister to consider wider legislation and think about the farmer who may be planning for the next ten years. Can he be sure that the mineral oil tax relief or excise measures will be maintained? People doing the extraction, mixing, selling and delivering can ask the same question. We discussed the most crucial aspect of the green economy in the Minister's absence last week. His colleague was not aware of some proposals on issues such as a national water authority, etc. As these ideas are good, they must be sold and argued. They should not be advocated apologetically.
The Green Party has a fine agenda which it should stand behind. We will sort out the irrelevant issues like hunting but we must keep with the core issues of the green economy. We must do everything we can to push it forward and have a cleaner environment. We should resolve the trilemma between food, energy and the environment. It can be done and I look forward to supporting the Minister as he does this.
The train to Sligo and the bus from Cavan mentioned by the Senator are social gains. We will not forget that in the support we will give to that type of progressive action.
I thank the Senators for their contributions to what has been an excellent and useful debate. This shows the complexities of progressing the green agenda. A number of Senators mentioned that the UK jurisdiction had similar legislation. In the European mandatory obligation systems we work under, there is much similar legislation coming from the European Union. However, the concept behind this obligation system was created in 2004 in an analysis presented by Sustainable Energy Ireland; therefore, we have been working on this for some time. It is not on the hoof or short-term thinking. There must be long-term thinking in what we do in the energy sector because in that way we can avoid some of the pitfalls in acting on a short-term basis.
Senator Reilly spoke about the possible to the consumer, an important consideration. Nobody knows for sure how much it will cost until we get down to doing it. As this is a market related obligation system, the cost it will vary. the Department estimates that the cost to the consumer should be less than half of one cent per litre of fuel. We should be willing to support this for the security benefits we may receive in the creation of this additional supply. There are carbon reduction benefits, but there is also a security issue in having diversity in the supply of oil for the delivery of our food, the movement of our people and everything we do daily. There are mechanisms in the Bill that will protect the consumer against an excessive fuel price rise such as the buy-out clause.
Senator Reilly stated that in developing these fuels, it would be preferable if they could benefit agriculture by providing for as much indigenous supply as possible. We all agree on that aspect. We should also agree that we must live within World Trade Organisation rules. Unless we unwind GATT, the Uruguay Round and the Doha Round negotiations, we are constrained by world trade rules. Therefore, we must develop Irish agricultural opportunities. I would be very attentive to the specific proposals of any party in that respect. This obligation system provides for a stable and consistent market for the sale and use of bio-fuels. This market has been bedevilled by the huge variability of support schemes; therefore, its consistency is the first means by which we can help Irish farmers. They have enough variables to deal with, be it the weather, the cost of seeds and other inputs. They at least want to know that there is a consistent market into which they can sell if they are to develop business opportunities. As this new obligation system is rolled out, there will be an opportunity for the European Union's sustainability criteria to benefit Irish farmers. We will have to see how this works because this is the first time these criteria will be rolled out. However, they provide an opportunity for Irish farmers. The criteria will include the crucial issues of land use and land use effect. We must make sure we are not buying fuel from land where forest had to be cleared, especially tropical rainforest. This will be contained in the EU criteria and is a crucial aspect.
There are specific reductions in respect of greenhouse gas reductions required in any bio-fuels traded under WTO rules. There is an immediate 35% carbon reduction, or CO
The sustainability criteria have to be based on a full life cycle analysis. They will include the area of transport emissions in terms of the overall greenhouse gas effect if we are importing bio-fuel products. Transport emissions are not necessarily a huge component of greenhouse gas emissions, but they come in under the full "wheel to wheel" analysis and extend from end-use carbon to the transport component in the full life cycle analysis.
We cannot do this on our own. Senator O'Toole is absolutely right. It must be a policy that is transparent and reported on in a sustainable way. This is only the starting point; we must see how it works. I am reassured by the fact that it was agreed by the Council of Ministers that it would be reviewed every two years from 2012, beginning with a report to the European Parliament on the sustainability criteria. We must be very sensitive to the effect of the development of bio-fuels, especially in developing countries. However, we have the opportunity to put in place measures that will support Irish farming and allow farmers to grow crops.
Senator Brady spoke about the recent announcement by the Minister for Agriculture, Fisheries and Food on the bioenergy support scheme. That scheme is clearly directed at the growing of miscanthus and willow, biomass energy crops, rather than crops for bio-fuels. While there will be connections down the line as we begin to turn organic waste crops into second generation bio-fuels, there is no connection as yet.
Several Senators spoke about NOX, nitrous oxide. The European measure of the greenhouse gas effect follows the standard UN definition; therefore, it includes the ratio of NOX, methane or carbon dioxide in the assessment.
They work according to a standard UN formula when figuring out the life cycle. I am confident that as we establish these criteria in the European Union, there will be a clear analysis of the proper greenhouse gas effect.
I listened to Senator Ó Brolcháin with real interest. Like him, I am a child of the 1970s and also remember pushing the car to the petrol station. For me, this is the instigation behind these measures. I agree with his analysis about the impending peak in global oil production. We are not going to run out of oil immediately, but we will eventually. We need a small percentage of bio-fuels in the event of a very serious crash. We need something to guarantee our bus transport system or our agriculture system in a worst case scenario. Having a 5%-10% bio-fuel component or an alternative supply means that if the Middle East tap is turned off, we can at least run essential services. That has always been my instinct behind the support of the use of bio-fuels, even though there are environmental complexities to the matter. We should proceed on that security basis.
Senator Ó Brolcháin spoke about the potential to be achieed in respect of waste oil facilities to deal with the waste oil from the chippers in Galway. That presents a very significant opportunity for us. We can get up to a figure of about 2%-3% of our fuel supply from waste materials alone. The carbon reduction to be achieved from this is huge because we are dealing with a waste problem in respect of tallow, waste vegetable oil and other materials.
Regarding second generation bio-fuels, we have already started research via the Charles Parson energy research awards in the Department and an INTERREG BioMara analysis programme to examine where second generation fuel can be sourced from non-food supplies. That provides us with real potential. We need to do this owing to the possible effect on food markets. A few years ago I heard that instead of producing the the corn-based ethanol fuel required to fill an SUV one could provide sufficient corn to feed someone for a year. We must think about that trade-off. The slightly terrifying analysis of Senator Quinn is worth listening to in order to ensure we get the balance right. For security reasons, it is right for us to invest in this technology and have the obligation to allow it to be delivered.
Senator O'Malley's contribution, particularly in respect of the transport fleet switchover, was interesting. She asked if we could do it using biomass to produce electricity to run electric cars. A crucial component of what we are doing is the integration of the use of electric vehicles with bio-fuel strategy. If we get electric fleets up and running, it will reduce our vulnerability in terms of security and the level of bio-fuel obligations we must set. If we have a very high electricity component, that will count towards the achievement of our 10% European target. It will reduce the mandatory element in respect of bio-fuel production. Senator O'Toole raised the same question and asked whether we could set an obligation in terms of the use of electric cars. This is one of the leading countries in rolling out the new electric car technology.
We are. We have a memorandum of understanding with Renault-Nissan and the ESB is introducing parking slots with plug-in facilities. The first vehicles will be rolled out this year and there will be 10,000 within the next three years.
Those involved in the industry say this is one of the leading countries and that we are ready to go. The ESB is committed to this, while the car companies are committed to providing cars here. The latter was the first possible constraint but we will receive the cars ahead of other countries. A Government commitment is given in the Budget Statement of the Minister for Finance to provide grant aid towards the battery cost to make the vehicles viable. We did this on the understanding that we would derive economic benefit from international ICT companies and Irish companies that would develop software required for the deployment of these vehicles. There is integration between the electric vehicle issue and the bio-fuel obligation. We should recognise that it will take time to do. A very good study at the US Department of Energy was carried out by Bob Hirsh in 2005 which showed that the average life of a vehicle was ten years in the United States. The figure is similar in Ireland. The study also shows that it takes 17 years to change half the vehicle fleet. In that time we must consider a range of options to cope with the peak in global oil production.
Senator Keaveney made an interesting point about Gilliland's farm and how this technology was developing. With new technology, particularly post-fossil fuel technology, we must recognise that we have had 100 years of oil-based technology. We must now start to support the alternative system in order that we can get the supply chain running and wean ourselves off the fossil fuel industry. That is the green agenda.
Senator Twomey made some interesting points. He referred to taxation and carbon. My Department is in continuous discussions with the Department of Finance about the upcoming Finance Bill. I am keen to ensure we will have a system that will recognise carbon reductions through the use of bio-fuels. We must see if we can develop this system within the Finance Bill as it progresses.
The Senator referred to the work undertaken in County Wexford. In the plants in New Ross waste material is used, while growers in the county took the risk at an early stage and planted rapeseed, using it for oil and fodder. These are the dual benefits. I commend those who were pioneers in this regard.
Senator Quinn and others referred to energy input and energy output. That is the crux of the matter. I heard Professor Charles Hall from the University of New York speak on this matter. He engages in an analysis of the energy return on energy investments based on natural systems analysis. It is perturbing. The energy return we get from oil discovered through offshore oil exploration is 20:1. Some 20 units of energy is the result of the input of one energy unit. In the case of bio-fuels, it would be a fraction of that figure. We will be lucky if it is two or three times the energy input. It is not easy. We will never have anything like oil, the most transportable, energy dense, marketable energy product we will ever have. Three tablespoons of oil represents eight man hours of labour. It is a remarkable material which will not be easy to replace. We must be hyper energy efficient and ensure diversity of supply, including our indigenous renewable resources. Bio-fuels are one of these resources which we are trying to develop.
I welcome the supportive comments of the Senators. I am aware of their concerns with regard to the requirement for us to be careful about using this developing technology in order that it will not lead to problems on far distant shores. I look forward to this being an opportunity for Irish farming, a view we all share.