Written answers

Thursday, 10 March 2005

Department of Communications, Energy and Natural Resources

Alternative Energy Projects

4:00 pm

Photo of Pádraic McCormackPádraic McCormack (Galway West, Fine Gael)
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Question 24: To ask the Minister for Communications, Marine and Natural Resources Ireland's position in the European league in respect of the utilisation of alternative energy fuels; and if he will make a statement on the matter. [8354/05]

Photo of Paul GogartyPaul Gogarty (Dublin Mid West, Green Party)
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Question 25: To ask the Minister for Communications, Marine and Natural Resources the measures he has taken to try and ensure that the Government meets the percentage biofuel targets set by the European Union. [8283/05]

Photo of Dan NevilleDan Neville (Limerick West, Fine Gael)
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Question 32: To ask the Minister for Communications, Marine and Natural Resources the degree to which it is hoped to replace existing fuels with biodiesels over the next five years; if he proposes to issue policy directives with a view to advancing targets; and if he will make a statement on the matter. [8359/05]

Photo of Dan BoyleDan Boyle (Cork South Central, Green Party)
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Question 42: To ask the Minister for Communications, Marine and Natural Resources if, in view of the proposed closure of the Carlow sugar factory and the failure to develop a new biofuel production industry from such facilities, his Department has commissioned research to investigate the potential for new industrial development and employment from such renewable indigenous fuel sources; and if he will make a statement on the matter. [8286/05]

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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Question 53: To ask the Minister for Communications, Marine and Natural Resources his plans to issue directives to encourage the production of biofuels; and if he will make a statement on the matter. [8365/05]

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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Question 60: To ask the Minister for Communications, Marine and Natural Resources if his attention has been drawn to the potential from the use of biodiesel; if he intends to issue policy directives in this regard; and if he will make a statement on the matter. [8367/05]

Photo of Michael NoonanMichael Noonan (Limerick East, Fine Gael)
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Question 63: To ask the Minister for Communications, Marine and Natural Resources his policy objectives in regard to biofuel production and in keeping with the Kyoto Protocol; and if he will make a statement on the matter. [8358/05]

Photo of Noel DempseyNoel Dempsey (Meath, Fianna Fail)
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I propose to take Questions Nos. 24, 25, 32, 42, 53, 60 and 63 together.

My Department is responsible for the promotion and development of renewable energy, including biofuels, and I am committed to the development and promotion of a biofuels market in Ireland's transport fuel sector. An interdepartmental group has been set up, chaired by my Department and comprising officials from Sustainable Energy Ireland, SEI, the Department of the Environment, Heritage and Local Government and the Departments of Transport, Agriculture and Food, and Finance. The group is considering policy options for the development of a biofuels sector in Ireland.

As part of the work of this group, a liquid biofuels strategy study was published by SEI in December, which examines the full range of options and potential supports for liquid biofuels development in Ireland, including bioethanol and biodiesel. The report is being considered as part of the overall policy objective to increase market penetration of biofuels in Ireland, which is currently at a very low level.

In March 2004, my Department secured an amendment to the Finance Act 1999, which provides for the introduction of a scheme of excise tax relief for biofuels. The purpose of the scheme is to allow qualified and conditional relief from excise on 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. It is envisaged that the scheme will encompass market development for pure plant oil, biodiesel and bioethanol.

The European Commission has now given state aid clearance for the scheme and the Minister for Finance has introduced the necessary commencement order. The scheme will be publicly advertised over the coming days and interested parties will be invited to apply for excise relief, through a competitive "call for proposals" process. Under the scheme, excise relief may be granted for pilot projects producing up to 6 million litres of pure plant oil, 1 million litres of biodiesel and 1 million litres of bioethanol.

Sustainable Energy Ireland is also funding a number of biomass projects and studies through its renewable energy research development and demonstration programme. Under the programme, Sustainable Energy Ireland offers capital grant aid for biofuels market demonstration projects in the pure plant oil, biodiesel and bioethanol categories. Funding of €250,000 has already been awarded by SEI to one company which is demonstrating the feasibility of producing and selling vegetable oil locally as a transport fuel. It is intended that further grant aid will be available under the programme for biofuel demonstration projects.

It is anticipated that these initial measures will lead to market penetration of biofuels of 0.13% within two years. Further measures to increase market penetration over a longer timeframe are currently being considered but no targets have been set as yet, nor is this a requirement of the EU biofuels directive. The biofuels directive sets indicative targets for market penetration of 2% by end 2005 and 5.75% by end 2010. The targets in the directive are indicative and not mandatory and many member states, including Ireland, would not be in a position to meet the 2% target by end 2005. Ireland is starting from a low current production base and the 2% target therefore represents a considerable challenge.

Under the EU biofuels directive, member states were required to submit a report to the Commission in 2004, giving details of current market penetration of biofuels and projected targets for 2005. The reports by member states are now available on the Commission's website and indicate that market penetration of biofuels is also low in many other EU member states. Only six countries have identified current market penetration levels of 1% or higher, with a further nine countries, including Ireland, identifying current market penetration levels ranging from 0% to 0.3%. Five countries have not identified current market penetration levels and five have not identified targets for end 2005. Only 20 member states have reports posted on the Commission's website.

The question of producing biofuel from sugar beet at the Irish Sugar plant would ultimately be a commercial matter for Irish Sugar Ltd. In the event that Irish Sugar Ltd. wished to initiate a new proposal for the production of bioethanol, it is likely that while some existing material handling elements and buildings might be useful components of a bioethanol plant, most — and possibly all — of the plant and buildings would require to be newly installed or built. It is understood, however, that following the closure of the Carlow plant, Irish Sugar Ltd. intends to process the full Irish sugar quota at its Mallow plant.

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