Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 262: To ask the Minister for Communications, Marine and Natural Resources the initiatives he is undertaking to promote the use of biofuels and other renewable energy; and if he will make a statement on the matter. [13226/06]

John Browne (Wexford, Fianna Fail)
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The Government introduced a scheme for mineral oil tax relief for biofuels under the Finance Act 2004, which was launched in April 2005. Eight projects have been awarded excise relief for a two year period under the scheme including four pure plant oil, three biodiesel or other biofuel and one bioethanol proposal. It is estimated that the pilot scheme will result in 16 million litres of biofuels being placed on the Irish transport market by next year.

Building on the success of the pilot biofuels scheme, the Department has agreed with the Minister for Finance a further targeted package of excise relief valued at €205 million, which was announced in the budget. The new excise relief programme, which is subject to State-aid approval, will be rolled out from this year to 2010 and will enable us to reach the initial target of 2% market penetration of biofuels by 2008. When fully operational, the relief is expected to support the use and production of some 163 million litres of biofuels each year. The Department is also providing funding towards the capital cost of developing biofuels processing facilities, which will critically underpin the excise relief package.

The multi-annual financial package for renewables announced in the 2006 budget included a grant aid package for the domestic sector, which the Department launched on 25 March. This package will provide for individual grants to install renewable energy heat technologies including wood pellet boilers, solar panels and geothermal heat pumps. A financial package for wood chip and wood pellet boilers, aimed at the business, commercial and service sectors, along with a grant aid package to incentivise the installation of combined heat and power in the industrial, commercial and public services sector was also included in the budget package. The Department, in conjunction with Sustainable Energy Ireland, is developing the necessary detailed measures to roll out these other programmes.

The Department also proposes to change the support mechanism for renewable energy projects from competitive tendering to a new fixed price tariff system. The draft terms and conditions of the proposed renewable energy feed in tariff or REFIT programme have been the subject of public consultation and the views received have usefully informed the shape of the programme. The Department is currently in consultations with the Office of the Attorney General regarding drafting of the new arrangements and I expect to be in a position to launch the REFIT programme in the near future.