Written answers

Tuesday, 10 October 2006

Department of Agriculture and Food

Alternative Energy Projects

9:00 pm

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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Question 472: To ask the Minister for Agriculture and Food if her Department will consider the possibility of holding a public hearing on the prospects of utilising the existing facilities at the former sugar factories of Carlow and Mallow for the processing of sugar beet and possibly other energy plants for use in the production of bioethanol; and if she will make a statement on the matter. [31502/06]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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Decisions on the future use of the former sugar factories at Carlow and Mallow are primarily a matter for the owners, Greencore Group plc. Anybody who expressed an interest in the possibility of utilising these factories for bioethanol production was advised to pursue the matter with Greencore.

The future use of the Mallow factory is, of course, linked to the EU restructuring scheme for the sugar industry, introduced under the agreement on reform of the EU sugar regime. Restructuring, in this context, refers to the abandonment of sugar quota production, the dismantling of the factories concerned and the allocation of restructuring aid to the affected processors, growers and machinery contractors. In Ireland, the restructuring scheme applies only to the Mallow factory since factories that had closed prior to July 2005, such as the Carlow factory, are not eligible.

The restructuring aid scheme as provided for in Council Regulation (EC) No. 320/2006 is subject to the submission by the processor of a detailed restructuring plan for the industry. The Regulation provides for payment of the full amount of restructuring aid where a sugar processor undertakes as part of the plan to fully dismantle the redundant sugar factory. A reduced rate of aid (75%) may be paid where a factory is partially dismantled and converted to non-food production, such as bioethanol. A decision on whether to fully or partially dismantle the factory is entirely a matter for the sugar processor concerned. Greencore submitted an aid application for restructuring aid in July under which they undertook to fully dismantle the Mallow factory and sought the maximum amount of restructuring aid. As the application met the requirements of the EU Regulations it was approved subject to the outcome of the Judicial Review proceedings instituted by Greencore concerning, inter alia, the percentage of aid reserved for growers and contractors.

Before the application for restructuring aid was received from Greencore I raised the possibility of using Mallow for bioethanol production with the Company having regard to the incentive under the restructuring scheme, the inclusion of sugar beet in the energy crops scheme and the extension in the last budget of excise relief of €205m which, when fully operational will support the use and production of 136m litres of biofuels annually. The Company informed me that it did not intend to produce bioethanol in Mallow.

The Government will be bringing forward further initiatives to support the development of the biofuels sector as set out in the recently-launched Energy Green Paper. The Minister for Communications, Marine and Natural Resources, who has overall responsibility for developing the biofuels sector, announced the new excise relief scheme for biofuels at the end of July and indicated that capital grants for biofuels facilities are also being provided as part of the Government's overall programme to promote biofuels and biomass. I understand that the capital grants programme is currently being designed and will be rolled-out as a separate initiative to the excise relief scheme.

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