David Stanton (Cork East, Fine Gael)
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Question 24: To ask the Minister for Finance his plans to reduce tax on sales of biofuel cars and biofuels as an incentive to persons wishing to develop the biofuel industry; and if he will make a statement on the matter. [12547/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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While the promotion of biofuels is primarily a matter for my colleague, the Minister for Communications, Marine and Natural Resources, I am pleased to inform the Deputy that in the Finance Bill 2006, which has just completed its passage through the Dáil and Seanad, I have provided for significant tax measures to promote biofuels in Ireland. The new large scale scheme of excise relief for biofuels to be established will provide for excise relief on up to 163 million litres of biofuels per annum, cost more than €200 million over five years starting this year, when fully operational will result in carbon dioxide savings of more than 250,000 tonnes per annum, meet a target of 2% transport fuel market penetration by biofuels, help reduce our dependency on conventional fossil fuels and stimulate activity in the agricultural sector. As a complementary measure, I have also provided for a new 50% VRT relief to promote new flexible fuel vehicles.

These are major initiatives aimed at promoting biofuels in Ireland. With respect to the excise relief scheme, I should say that as any such scheme is deemed a state aid by the European Commission, the necessary approval from the Commission is required. Preliminary discussions have already taken place between the Department of Finance, the Department of Communications, Marine and Natural Resources and the European Commission in this regard. Once approval has been granted, the Department of Communications, Marine and Natural Resources will advertise the scheme and set out the procedures for applying for the excise relief.