John Gormley (Dublin South East, Green Party)
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Question 57: To ask the Minister for Finance when he will implement promised measures in relation to favourable tax treatment for the production of biodiesel. [2592/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy may be aware that section 98(a) of the Finance Act 1999, as inserted by section 50 of the Finance Act 2004, provides for the introduction of a scheme for excise tax relief for biofuels. The purpose of the scheme is to allow qualified and conditional relief from excise of biofuel used in approved pilot projects for either the production of biofuel or the testing of the technical viability of biofuel for use as a motor fuel.

The European Commission has confirmed that the scheme would represent a State aid and consequently its approval is required. My Department, together with the Department of Communications, Marine and Natural Resources, has submitted a formal application for Commission approval for a scheme which includes pure plant oil, biodiesel and bioethanol. The EU energy tax directive 2003 envisages such tax relief and the Commission has approved schemes for excise relief of biofuel in other EU member states. Assuming approval is granted, the necessary commencement order will then be signed.