Pádraic McCormack (Galway West, Fine Gael)
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Question 32: To ask the Minister for Agriculture and Food her plans to develop the biofuel industry in the context of the EU sugar reforms; and if she will make a statement on the matter. [37735/05]

David Stanton (Cork East, Fine Gael)
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Question 94: To ask the Minister for Agriculture and Food if she intends to increase funding and supports to promote and develop the biofuels sector in view of its importance as an alternative for the beet industry; and if she will make a statement on the matter. [38444/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 32 and 94 together.

Responsibility for energy policy, including the promotion of the biofuels sector, rests primarily with my colleague, the Minister for Communications, Marine and Natural Resources.

It will be a matter for beet growers and Irish Sugar Ltd. to make decisions about sugar beet growing in Ireland in light of the reformed sugar regime, on which political agreement was reached at the Council of Agriculture Ministers' meeting on 24 November 2005. The reform agreement will come into effect from 1 July 2006 and provides a range of options.

The production of ethanol from sugar beet is a possible alternative outlet for farmers but, as matters stand, Irish Sugar Ltd. has arrangements in place to process the full Irish sugar quota at its Mallow plant, which has been upgraded for that purpose. The question of establishing a bioethanol plant based on sugar beet would be a matter for commercial decision.

In future, under the decoupled system of support payments, farmers will only grow crops which provide an economic return. The announcement in yesterday's budget of the excise duty relief scheme to cover, when the relief is fully operational, some 163 million litres of biofuels per year should stimulate the production of crops for the manufacture of liquid biofuels. This is a very welcome development.

To encourage the growing of sugar beet as an energy crop, the EU Commission intends, during 2006, to amend the relevant regulations to allow sugar beet to qualify for set-aside payments, when cultivated as a non-food crop, and also to be made eligible for the energy crop aid of €45 per hectare. The sugar reform agreement also permits the partial dismantlement of a sugar factory and the continued use of the production site for the production of non-food products such as bioethanol. In these circumstances, the final agreement provided that 75% of the restructuring aid be payable. This represented an increase on what the Commission originally proposed.

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. Details of the successful projects will be announced shortly.