Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 339: To ask the Minister for Finance if he has received submissions requesting an increase in the amount of pure plant oil qualifying for excise free status; and if he will make a statement on the matter. [10557/07]

Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

Question 340: To ask the Minister for Finance if he has received requests from the Department of Communications, Marine and Natural Resources to increase the amount of bio-ethanol or bio-diesel qualifying for excise free status; and if he will make a statement on the matter. [10559/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 339 and 340 together.

The Government is firmly committed to the development of biofuels generally in Ireland. The promotion of biofuel is primarily a matter for my colleague, the Minister for Communications, Marine and Natural Resources, however, 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; contribute towards meeting a target of 5.75% transport fuel market penetration by biofuels by 2009; help reduce our dependency on conventional fossil fuels; and stimulate activity in the agricultural sector.

I have received representations requesting an increase in the amount of biofuels qualifying for excise duty relief, including pure plant oil. However, I should point out that the overall level of excise relief available for biofuels, which is subject to EU State Aid approval, — and the breakdown of the relief between each of the alternative fuels — is that which had been proposed by the Minister for Communications, Marine and Natural Resources in advance of Budget 2006. It is regarded as a level which is sufficient to match Ireland's output potential in relation to renewable energy crops for motor fuels over the coming years. Any extension in the amount of relief which formed part of that Budget announcement is not envisaged at this stage. These fiscal incentives were designed to kick-start the domestic biofuels industry and the evidence suggests that this is happening.

To provide further market certainty and encourage projects of scale, the Government recently announced its intention to move to a Biofuels Obligation by 2009, with targets for market penetration for biofuels of 5.75% in 2009 and 10% by 2020.