David Stanton (Cork East, Fine Gael)
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Question 25: To ask the Minister for Agriculture and Food her input into the national bioenergy action plan; if the plan is on target to be completed by the end of 2006; the efforts she is making to encourage both farmer and industry to increase biofuel production; and if she will make a statement on the matter. [40573/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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The Government recognise that the development of Ireland's Bio-energy potential, requires a fully cohesive approach across Government Departments, State Agencies and all relevant stakeholders. Accordingly, in July 2006, a Ministerial Taskforce on Bioenergy was established under the chairmanship of Minister for Communications, Marine and Natural Resources, Noel Dempsey, TD in which seven Government Departments are partaking.

Over the past few months, I have been participating in the Taskforce and along with my Ministerial colleagues we have been working to deliver an integrated National Bio-Energy Action Plan. It is intended that the Plan will be published before the year end and will establish a firm road map and set challenging targets to develop Ireland's biofuels and biomass resources up to 2020.

Central to this Action Plan is the consideration of initiatives to incentivise the development of Ireland's biofuel market. Interest in producing biofuels in Ireland increased dramatically following the decision in recent budgets to provide excise relief on biofuels. A pilot initiative was rolled out in 2005 for 16 million litres of biofuels and was recently followed by a new excise relief programme valued at some €200m. Under this programme, sixteen biofuels projects will be granted excise relief to deliver a further 163m litres of biofuels on the Irish transport market, representing 2.2% of the entire fuel market.

In addition, the Finance Act 2006 provided 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.

I believe this package of measures will help stimulate demand for the production of energy crops for the manufacture of liquid biofuels. On the supply side, support to farmers for growing energy crops may only be provided in accordance with EU Regulations. Under the Energy Crops Scheme, aid of €45 per hectare is available for energy crops provided they are intended primarily for use in the production of biofuels and electric and thermal energy produced from biomass. In addition to this scheme, set aside land can be used for a variety of non-food uses including the growing of crops for energy purpose and will therefore qualify to activate set-aside entitlements under the Single Payment Scheme. The EU has agreed that sugar beet will be eligible for aid under the scheme and may also be grown as an energy crop on set aside land.

At the February Council of Agriculture Ministers meeting, I called for a review of the energy crop premium as it was not proving effective in Ireland and I subsequently raised the matter with the Agriculture Commissioner. The EU Commission has published a Report on implementation of the scheme and has made a Proposal, which would allow member states pay national aid up to 50% of the costs associated with establishing permanent crops. The Proposal is currently being discussed in Brussels.

The importance of biofuels is recognised in the AGRI Vision 2015 Action Plan. I believe the development of an indigenous biofuel sector presents a new opportunity for farmers and rural communities. Biofuel development will help stimulate diversification of farm incomes, generate sustainable employment and contribute to the development of rural economies. My Department will continue to work closely with the Department of Communications Marine and Natural Resources to ensure that agriculture contributes to the development of biofuels as part of a coherent energy policy.