Written answers

Wednesday, 22 November 2006

9:00 pm

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 225: To ask the Minister for Finance the taxation per litre of petrol or diesel; and if he will make a statement on the matter. [39561/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The Excise duty on a litre of petrol and diesel is 44.3 cent and 36.8 cent respectively. Petrol and auto diesel are subject to the standard VAT rate which in Ireland is 21%.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 226: To ask the Minister for Finance if he will offer further tax incentives to the producers of alternative fuels, such as bio-diesel, ethanol or other such fuels; and if he will make a statement on the matter. [39562/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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While the promotion of biofuels and other renewable energy is primarily a matter for my colleague, the Minister for Communications, Marine and Natural Resources, I am pleased to inform the Deputy that in Finance Act 2006 I provided for significant tax measures to promote biofuels in Ireland. The scheme of excise relief for biofuels will:

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

cost over €200m over 5 years;

when fully operational, 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.

The level of excise relief available is that which had been proposed by the Minister for Communications, Marine and Natural Resources in advance of last year's Budget and is regarded as a figure which is sufficient to match Ireland's output potential in relation to renewable energy crops for motor fuels over the period of the scheme. Consequently, any extension in the level of relief that was announced last year is not envisaged at this stage.

As regards other fiscal supports for the Biofuels industry, I would point out that also in Budget 2006, I introduced a 50% VRT relief for flexible fuel vehicles. These are defined as cars or small vans produced so as to be capable of using a blend of ethanol and petrol containing a minimum of 85% ethanol. This should encourage the purchase of vehicles that have been manufactured with flexible fuel capabilities which will result in lower pollutant emissions than conventional vehicles fuelled exclusively by petrol/diesel.

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