Denis Naughten (Longford-Roscommon, Fine Gael)
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Question 189: To ask the Minister for Finance his views on concession in excises for the production of bioethanol from sugar beet. [33113/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Section 50 of the Finance Act 2004 provided for the introduction of a limited scheme of relief from excise tax, for biofuels. The purpose of the provision was 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. As the Deputy may be aware, it was necessary to obtain approval from the EU Commission as the proposed scheme represented a State aid. Approval was granted in March 2005 and 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.

The current scheme includes excise relief on ethanol production up to a limit of 2 million litres. It is up to the project promoter to choose the most appropriate feedstock to produce the ethanol. I am informed by my colleague, the Minister for Communications, Marine and Natural Resources that Maxol, the producer of the 2 million litres of bioethanol under the current scheme, is sourcing the ethanol from the by-products of cow's milk.

The possible introduction of a wider scheme of excise relief for biofuels, including bioethanol, is under consideration. Sugar beet, as under the current scheme, would be an option for bioethanol producers in any such scheme.