Eamon Ryan (Dublin South, Green Party)
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Question 349: To ask the Minister for Communications, Marine and Natural Resources the percentage of biofuel crops that have been supplied to date under Government support schemes that have been produced from raw materials sourced here; and the percentage that has been imported from abroad; and if he will make a statement on the matter. [11758/07]

Noel Dempsey (Meath, Fianna Fail)
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The National Bioenergy Action Plan sets out a series of cross-Governmental and inter-agency actions to support the development and deployment of bioenergy resources in Ireland. It is the case that the production of energy crops in Ireland is relatively underdeveloped. The policy objective is to develop an indigenous biofuel industry sourced, where feasible, from indigenous raw materials.

The Bioenergy Action Plan sets out the measures aimed at encouraging farmers to grow energy crops. The move to a biofuels obligation and establishment of ambitious targets, together with the relevant agricultural incentives will provide new opportunities for the farming community to diversify into energy crops. I am confident that this will facilitate increased participation by growers in the emerging bioenergy market.

In addition to measures to increase the penetration of biofuels, farmers are also being incentivised by a new €6 million bioenergy scheme to top-up the EU energy crop premium which was announced recently by my colleague, the Minister for Agriculture and Food. Under this scheme, farmers will receive an additional €80 per hectare on top of the existing €45 premium.

Ireland currently has 400,000 hectares of land under tillage and 75,000 hectares of land would be required if all of the 2% target were to be met from indigenous crops. By establishing targets of 5.75% and 10% market penetration b y 2010 and 2020, we are clearly creating a market framework in which Irish farmers have significant opportunities to participate and which facilitate recycling of wastes such as recovered vegetable oil and tallow.

The biofuels obligation to be introduced by 2009, will provide market players and producers with long-term certainty and a more stable investment climate. It will build on the success of the two biofuels excise relief programmes rolled-out in 2005 and 2006. The Biofuels Mineral Oil Tax Relief Schemes were rolled out as competitive calls for proposals. They involved an open and transparent process in which the scoring mechanism was published as part of the application form and accompanying documentation. The schemes were the subject of State Aids applications which were approved by DG Competition. Under State Aids Rules the process must be open and fair and subject to single market rules.

The EU transport fuel market is fully liberalised and does not allow for positive discrimination. Preference could not be given therefore to any participants within the competition by virtue of the origin of biofuels or biofuel feedstocks, or by the size or nature of the company applying for excise relief. Under the pilot scheme, launched in 2005, eight projects were awarded excise relief on 16m litres of biofuels. 95% of the biofuels being produced under the pilot scheme involve the use of raw materials sourced in Ireland. Scheme II, which was rolled out in 2006, was designed to move from the pilot stage to a 2% market penetration of biofuels by 2008, representing up to 163m litres of production per annum. While there is a significant increase in indigenous feedstock being used in this scheme, it is too early to state the precise percentage of indigenous raw materials that will be used. The majority of projects under Scheme II however have indicated that are producing or intend to produce biofuels on the island of Ireland, and have indicated that Irish feedstocks will be used. In the case of larger scale, long-term developments under the Scheme, where significant investments are required, a degree of imports have been identified as necessary until facilities and feedstock supply chains are in place. I can confirm however that the majority of applicants under the scheme have indicated that it is their immediate or longer term intention to locate processing facilities in Ireland.

In announcing the obligation, we have also committed to achieving 5.75% market penetration of biofuels by 2009, in advance of the date proposed for such a target in the EU Biofuels Directive. The Government is also committed to achieving 10% market penetration of biofuels in Ireland by 2020. The obligation will be rolled out in 2009 after consultations this year with the stakeholders in relation to the specific details of the scheme and we will also be working towards the introduction of appropriate legislation.