Written answers

Tuesday, 27 March 2007

Department of Communications, Energy and Natural Resources

Alternative Energy Projects

11:00 am

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Question 85: 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 which have been produced from raw materials sourced here; the percentage that have been imported from abroad; and if he will make a statement on the matter. [11491/07]

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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Question 86: To ask the Minister for Communications, Marine and Natural Resources his plans to increase the production and use of biodiesel and bioethanol other than by importation, having particular regard to the needs for security of supply, the provision for import substitution and the maximisation of employment arising therefrom; and if he will make a statement on the matter. [11424/07]

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 99: To ask the Minister for Communications, Marine and Natural Resources the measures he will introduce to improve the sustainability profile of the fuel transport sector here; and if he will make a statement on the matter. [11334/07]

Photo of Pádraic McCormackPádraic McCormack (Galway West, Fine Gael)
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Question 114: To ask the Minister for Communications, Marine and Natural Resources the extent to which he proposes to incentivise the use of home produced alternative fuels in the transport sector with a view to combating global warming while at the same time maximising the economic benefit nationally; and if he will make a statement on the matter. [11443/07]

Photo of Bernard AllenBernard Allen (Cork North Central, Fine Gael)
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Question 120: To ask the Minister for Communications, Marine and Natural Resources if he is prepared to recommend raising the quota of pure plant oil which qualifies for excise free status; and if he will make a statement on the matter. [11414/07]

Photo of Michael NoonanMichael Noonan (Limerick East, Fine Gael)
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Question 124: To ask the Minister for Communications, Marine and Natural Resources if, in the context of import substitution and eco awareness he is prepared to encourage an increase in the amount of biodiesel or ethanol qualifying for excise free status; and if he will make a statement on the matter. [11462/07]

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
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Question 147: To ask the Minister for Communications, Marine and Natural Resources the amount of bioethanol and biodiesel currently qualifying for excise free status; the potential production in 2007; his intentions for further incentivisation; and if he will make a statement on the matter. [11453/07]

Photo of Billy TimminsBilly Timmins (Wicklow, Fine Gael)
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Question 163: To ask the Minister for Communications, Marine and Natural Resources his plans to surpass the projections outlined in the Government's recently unveiled White Paper on Energy with particular reference to encouraging the use of home produced alternative energy in the transport sector; and if he will make a statement on the matter. [11471/07]

Photo of Joe CostelloJoe Costello (Dublin Central, Labour)
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Question 186: To ask the Minister for Communications, Marine and Natural Resources the reason the biofuels obligation will be delayed until 2009; the measures he will introduce in the interim to accelerate the level of biofuels in the fuel mix here; and if he will make a statement on the matter. [11338/07]

Photo of Noel DempseyNoel Dempsey (Meath, Fianna Fail)
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I propose to take Questions Nos. 85, 86, 99, 114, 120, 124, 147, 163 and 186 together.

The Government is firmly committed to the development of an Irish biofuels market and to the development and deployment of bio-energy generally in Ireland. A range of initiatives is already in place to support the development of the biofuels sector. The Minister for Finance has made it clear that any extension in the amount of excise relief under the Biofuels Relief Schemes is not envisaged at this stage. The second Scheme runs until 2011. We are focusing now on non-fiscal measures which will increase the market penetration of Biofuels. The planned introduction of a Biofuels Obligation by 2009 will require all fuel suppliers to ensure that biofuels represent a certain percentage of their annual fuel sales.

In announcing the obligation, I have also committed to achieving 5.75% market penetration of biofuels by 2009, in advance of the target date in the EU Biofuels Directive. We have also committed to achieving 10% market penetration of biofuels in Ireland by 2020. We will undertake a series of consultations this year with stakeholders on the specific details of the scheme and this will be followed by the introduction of appropriate legislation. We have set 2009 as the date for introduction of the obligation. This is a tight timeline in reality and it allows for sufficient time for market players to gear up and for the details to be worked through.

The Bioenergy Action Plan sets out a series of cross-Governmental and inter-agency actions to support the development and deployment of bioenergy in Ireland. In formulating the plan, it was agreed that while excise relief is an effective short-term measure to stimulate the biofuels market, other policy initiatives, such as a renewables obligation, would be beneficial in the longer-term. The obligation will also give all market players the necessary long-term certainty to make appropriate investment decisions.

The Bioenergy Action Plan also sets out the measures aimed at encouraging farmers to grow energy crops. The move to a biofuels obligation and our ambitious targets, together will create opportunities for the farming community to diversify into energy crops. The production of energy crops in Ireland is relatively underdeveloped and the incentives put in place by my colleague the Minister for Agriculture and Food are designed to encourage further development.

The biofuels obligation will provide market players and producers with long-term certainty and a more stable investment climate. The 5.75% obligation represents a long-term commitment by the Government to the development of a biofuels market in Ireland, and will build on the success of the two biofuels excise relief programmes.

Under the 2005 Pilot Biofuels Mineral Oil Tax (MOT) Relief Scheme, excise relief was awarded on the production of 2m litres of bioethanol and 2m litres of biodiesel for the duration of the scheme. 95% of the 16m litres of biofuels being produced overall under the scheme involve the use of raw materials sourced in Ireland.

Under the 2006 Biofuels MOT Relief Scheme, excise relief was awarded on the production of 306m litres of bioethanol and 290m litres of biodiesel for the duration of the scheme. The scheme provides for the production of 40m litres of bioethanol and 57m litres of biodiesel in 2007. This is in addition to the pilot scheme, which provides for the production of 0.795m litres of bioethanol and 1.076m litres of biodiesel in 2007.

Scheme II 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 feedstocks being used in this scheme, it is too early to state the precise percentage of indigenous raw materials that 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.

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 EU rules do not allow for positive discrimination. Neither could preference be given 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.

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, 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 by 2010 and 2020, we are creating a Biofuels market framework in which Irish farmers will have significant opportunities to participate.

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