Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

Question 314: To ask the Minister for Finance the excise duty which applies to motor fuel based on bioethanol; the way in which this compares with the excise on petrol; and the further way in which the Irish differential in total tax paid on these competing fuels compares with other EU countries. [30080/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The rate of mineral oil tax on substitute fuel, such as bioethanol, for auto-use is 36.8 cents per litre, the same rate as for auto-diesel. The rate for unleaded petrol is 44.3 cents per litre. However, an exception applies where bioethanol is produced in the projects approved under an excise exemption scheme for biofuels, which was introduced in the Finance Act 2004, as a limited, pilot scheme. The purpose of the provision was to allow qualified and conditional relief from excise for 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. After obtaining the necessary State aid approval from the EU Commission, the scheme was subsequently advertised by the Department of Communications, Marine and Natural Resources. Excise relief was granted to successful applicants to the scheme from August 2005 for a total of 16 million litres of fuel at a cost of €3 million per annum. The issue of putting a wider scheme of excise relief in place is under active consideration with the Department of Communications, Marine and Natural Resources, which has primary responsibility for the promotion of biofuels in Ireland.

With respect to tax differentials between bioethanol and petrol in other EU countries, the situation varies greatly and different national tax regimes make country comparisons difficult. It appears that apart from Ireland, 12 member states have implemented, or are in the process of implementing, partial or full tax reliefs for biofuel, which would include bioethanol.

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

Question 315: To ask the Minister for Finance the vehicle registration tax concessions which apply to cars adapted to use bioethanol or other fuels which offer lower CO2 emissions or renewable sources; his views on further restructuring of vehicle registration tax to promote the expansion of such vehicles; and if he will make a statement on the matter. [30081/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

There are currently no vehicle registration tax concessions available for cars in respect of any adaptation for the use of bioethanol or other fuels that offer lower CO2 emissions or renewable sources. There is a scheme which provides for a remission or repayment of 50% of VRT for certain hybrid electric vehicles, which was introduced in January 2001. This hybrid electric technology results in significantly lower pollutant emissions than conventional vehicles powered exclusively by internal combustion engines. The scheme was extended by the Finance Act 2005 for a further two years to 31 December 2006.

However, the purpose of that scheme was to encourage the new technology required to develop hybrid vehicles by encouraging the purchase of vehicles that use a combination of an internal combustion engine and an electric motor to derive motive power. The introduction of a hybrid-like VRT incentive for vehicles adaptable to biofuels may be problematic insofar as such cars may also run on petrol and diesel and some abuse of such a scheme is possible. Arguably, the promotion of biofuels, insofar as tax is concerned, might be best done within the excise relief scheme. Currently, there are a number of biofuels pilot projects where full excise relief is being applied. The issue of putting a wider scheme of excise relief in place is under active consideration with the Department of Communications, Marine and Natural Resources.