John Moloney (Laois-Offaly, Fianna Fail)
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Question 260: To ask the Minister for Agriculture and Food her efforts to assist the biofuel sector. [9173/07]

Mary Coughlan (Donegal South West, Fianna Fail)
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Over the past few months, I have been participating in a Ministerial Taskforce on Bioenergy, to prepare a National Bio-energy Action Plan to develop Ireland's bioenergy resources to 2020. The Action Plan was launched at the weekend and is a comprehensive strategy to increase the deployment of Ireland's bioenergy resources in the transport, heat and electricity markets.

The Plan sets out a number of Actions across the agriculture, enterprise, transport, environment and energy sectors to develop Ireland's biofuel and biomass resources. Among the commitments in relation to Agriculture are:

Introduce an additional €6m energy crop 'top up' payment of €80 per hectare on top of the existing EU Energy Crops Premium of €45 per hectare payment;

Introduce an €8m Bioenergy Scheme to provide establishment grants to encourage farmers to plant new energy crops such as miscanthus and willow;

Introduce a €1.2m dedicated Wood Biomass harvesting machinery grant programme for wood chippers and forest residue bundlers;

Encourage a rate of afforestation that is suitable for and sufficient to meet increased market demand for wood in the medium to long term;

Introduce a Forestry Environment Protection Scheme to facilitate increased levels of afforestation;

Develop and support the forest wood energy chain to deliver quality wood fuel at a competitive price;

Fund research in collaboration with DCMNR & SEI to identify and select plant varieties and crop production and management systems that are most suited to biofuel production in the Irish context.

The Government have introduced a number of measures to stimulate the demand side of the biofuels market through the provision of excise relief measures in recent budgets. The latest excise relief scheme valued at €205m will deliver some 163 million litres of biofuels per year, when fully operational in 2008. This scheme will help drive additional demand for the production of energy crops. In a further boost to biofuels, the Government recently announced the introduction of 'biofuels obligations' to ensure 5.75% market penetration of biofuels by 2009 and 10% by 2020. This initiative was one of the key Actions recommended by the Ministerial Task Force on Bio-Energy and will help the biofuel market in Ireland develop to a more economical scale.

To link in with demand side measures, my Department has been working to support the supply side of the market by providing €14 million in funding to encourage farmers to grow energy crops. As indicated in the Bioenergy Action Plan, €6 million is being made available over three years to support a new national payment of €80 per hectare for growing energy crops. The additional €80 payment will be paid as a top-up to the existing EU Energy Crops Premium of €45 per hectare under the EU Energy Crops Scheme and increases the overall premium available to €125 per hectare. It is intended that the €80 payment will apply for three years and will be subject to a maximum ceiling per producer over the three years. The current maximum area per producer over the three-year period is 37.5 hectares. My Department is pursuing EU approval to increase this hectarage ceiling. I have also announced a new Bioenergy Scheme to provide establishment grants to farmers to plant willow and miscanthus for use as a renewable source of energy. The maximum grant aid payable is up to 50% of establishment costs, which means farmers can receive up to €1,450 per hectare in aid. €8m has been allocated to this scheme over the period 2007-2009.

By products of farming and food processing also have significant potential as biofuel feedstock. For example the use of animal by products such as meat and bonemeal and tallow for production of heat and power would represent a significant bioenergy contribution from agriculture. These products can also be used in combination with purpose grown energy crops thereby making the production of biofuels more economically sustainable. Oilseed rape for example can be used in conjunction with tallow and recovered vegetable oil in the manufacture of biodiesel. As announced in the Bioenergy Action Plan, the Government will be expanding the REFIT feed in tariff support scheme to encourage waste to energy projects by supporting hybrid projects.

My Department is supporting research into biofuel projects through the Research Stimulus Fund Programme. Under the 2005 and 2006 calls for proposals, five projects were selected that relate directly to biofuels and energy crops and received total grant assistance of €1.5 million. My Department has also secured €2.5m in funding under the Governments Strategy for Science, Technology and Innovation 2006-2013 for research on the farming aspects of bio-energy production. This is a collaborative project with the Department of Communications, Marine and Natural Resources, and involves research into the most suitable plant varieties and crop production systems for bioenergy production in Ireland.