Written answers

Wednesday, 18 October 2006

9:00 pm

Photo of John PerryJohn Perry (Sligo-Leitrim, Fine Gael)
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Question 106: To ask the Minister for Finance his views on the potential for taxation to play a role in promoting energy efficiency. [33161/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I have stated before that taxation can play a part in attaining environment objectives which includes promoting energy efficiency. In this regard, the National Climate Change Strategy does envisage initiatives in the tax area with one such example being tax reliefs for "green initiatives". Essentially this approach uses the tax system to provide incentives for certain behaviour. Such incentives include capital allowances for corporate investment in renewable energy projects which have been available since 1998, and the significant new Biofuels excise relief scheme which I provided for in Finance Act 2006.

This latter Scheme will

provide for excise relief on up to 163 million litres of biofuels per annum;

cost over €200m over 5 years;

result in CO2 savings of over 250,000 tonnes per annum;

meet a target of 2% transport fuel market penetration by biofuels by 2008;

help reduce our dependency on conventional fossil fuels, and

stimulate activity in the agricultural sector.

As a complementary measure, I provided in Finance Act 2006 for a new 50% VRT relief to promote new flexible fuel vehicles (cars designed to operate on biofuels) for an initial period of 2 years, and also extended the existing VRT relief for hybrid cars by a further year to end 2007.

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