Bernard Durkan (Kildare North, Fine Gael)
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Question 254: To ask the Minister for Finance if he has had discussions with the motor industry with a view to the utilisation of modern technology to achieve reduced emissions; his proposals to incentivise in this area; and if he will make a statement on the matter. [4399/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have not had any specific discussions with the motor industry on the utilisation of modern technology to reduce emissions. Cars are not manufactured in Ireland and consequently our capacity to influence matters is primarily focussed on supporting, at European level, proposals aimed at targeting lower emission standards for cars sold or manufactured in the EU. In any event, proposals concerning emissions from the transport sector are matters for my colleagues, the Minister for Transport and the Minister for Environment, Heritage and Local Government.

However, the Deputy will be aware that I announced on Budget day the commencement of a public consultation on options for revising the VRT system to take greater account of CO2 emissions. If under that consultation, ideas emerge with respect to greater utilisation of modern technology to reduce emissions, they will be examined fully.

Bernard Durkan (Kildare North, Fine Gael)
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Question 255: To ask the Minister for Finance his plans or proposals to reduce emissions from motor engines; and if he will make a statement on the matter. [4400/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I announced on Budget day the commencement of a Public Consultation on Options for revising the VRT system to take greater account of CO2 emissions. I invited interested parties to make submissions to my Department by 1 March 2007. A summary of a number of possible Options which are under consideration by my Department was contained in the Budget 2007 documentation and a longer consultation document has also been placed on my Department's website. In addition, an invitation for submissions was advertised in the national daily newspapers on 15 December 2006. A similar consultation is under way on motor tax, which is under the remit of my colleague, the Minister for Environment and Local Government. The intention is that from a target date of January 2008, cars with lower emissions will be rewarded with lower VRT and motor tax while increased taxes would be in place for higher emission cars. In so doing we hope to incentivise consumer behaviour which would be less harmful to the environment.

Another way of reducing emissions is to incentivise the purchase of alternative motor fuels. In this regard, I am pleased to inform the Deputy that in Finance Act 2006 I provided for significant tax measures to promote biofuels in Ireland.

This scheme, which received the necessary EU State Aid approval, commenced in November 2006 and 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.