Michael Ring (Mayo, Fine Gael)
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Question 126: To ask the Minister for Agriculture and Food her plans to develop the biofuel industry; and if she will make a statement on the matter. [33810/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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The Minister for Communications, Marine and Natural Resources has overall responsibility for energy policy and is primarily responsible for the promotion and development of renewable energy, including biofuels. The development of the biofuels industry is, of course, a cross-sectoral issue impinging on several policy areas, for example, environmental and fiscal policy as well as energy policy, and involving several Departments and agencies. My Department has been represented on a number of interdepartmental groups considering the issue and there has also been direct contact between my Department and the Department of Communications, Marine and Natural Resources.

I am conscious of the central role agriculture can play in supplying the necessary raw materials for the production of biofuels. Energy crops such as oilseed rape, wheat and sugar beet can be used for the manufacture of liquid transport biofuels, forestry by-products are a rich source of wood biomass and various farming by-products, such as meat and bone meal and tallow, can be used for energy/heat generation and biodiesel manufacture respectively.

For the purposes of contributing to the development of policy on biofuels, my Department, in conjunction with COFORD and Teagasc, has examined the potential of energy crops, wood biomass and farming and food by-products. In general, the production of energy crops for biofuels will have to be demand led and production by farmers will only occur if the economic returns are greater than those offered by traditional crop enterprises. The production of liquid biofuels from energy crops is not economic at current oil price levels. However, the scheme announced by the Minister for Communications, Marine and Natural Resources for mineral oil tax relief on pilot biofuel projects has stimulated the production of oilseed rape for biofuel.

The exploitation of wood resources for energy purposes, mainly for heat or electricity generation, offers significant potential. There are also significant opportunities for using by-products of farming and food processing for bioenergy purposes. Approximately 140,000 tonnes of meat and bonemeal is produced annually and its use in place of fossil fuels could reduce carbon dioxide emissions by up to 19%.

I am anxious to encourage further research to assist the development of the biofuels industry. Teagasc has already done some valuable work in this area and I also arranged for research projects on biofuels and other non-food uses of crops to be included in the latest call under my Department's research stimulus programme. The outcome of this call is not yet available but the nature of the projects to be funded will depend on the proposals received.