Ivor Callely (Dublin North Central, Fianna Fail)
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Question 278: To ask the Minister for Communications, Marine and Natural Resources the incentives he is introducing to encourage people to use biofuels and drive environmentally friendly cars; and if he will make a statement on the matter. [13881/07]

Noel Dempsey (Meath, Fianna Fail)
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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 2005 pilot mineral oil tax relief scheme for biofuels has resulted in eight projects being awarded excise relief for a two year period under the scheme. Building on the success of this scheme a further Biofuels Mineral Oil tax Relief Scheme II was introduced in 2006, valued at over €200m. Under this scheme sixteen projects have been awarded excise relief to the period 2010. The scheme will enable us to reach the initial target of 2.2% market penetration of biofuels by 2008. When fully operational the relief is expected to support the use and production of some 163 million litres of biofuels each year therefore increasing the market penetration of Biofuels to the public. As a result of this scheme, biofuels are already being mainstreamed in blends of up to 5% at existing petrol and diesel pumps, and higher blends are being sold to identified vehicle fleets. The Government has also introduced a 50% VRT relief on Flexible Fuel Vehicles, which are capable of running on blends of up to 85% ethanol in petrol. These vehicles are now available in Ireland from a number of car manufacturers. The National Climate Change Strategy also commits to a re-alignment of VRT and Motor Tax to favour more energy efficient cars. 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.

Grants for the conversion of diesel engine vehicles to use Pure Plant Oil (PPO) have been made available by Sustainable Energy Ireland (SEI), working with the four companies who were granted excise relief under the PPO category in the Pilot Biofuels Mineral Oil Tax Relief Scheme. The Department of Transport is also funding specific biofuels initiatives and will publish a Sustainable Transport Action Plan later in 2007.

In tandem with these developments the Bioenergy Action Plan commits to the introduction of biofuels in blends of up to 5% in existing Local Authority and CIE fleets and in the range of 30% in new vehicle purchases. As highlighted in the recently published National Biomass Action Plan it is the Government's intention to encourage the use of biofuels in public service vehicles and this will be done through the following: CIE transport companies to ensure that all of their new fossil fleet purchases are capable of using biofuels at blends of at least 30% by including the requirement for such technical capability to be specified in procurement tenders; CIE transport companies mandated to move as soon as possible towards a 5% blend in all their existing diesel fleet; Promote the use of biofuels at up to 5% blends in Local Authority fleets and when purchasing new fossil fuel vehicles ensure that they are capable of taking much higher biofuel blends, in the range of 30% and higher; Publication of a Sustainable Transport Action Plan before the end of 2007 which will identify further measures that will help a switch to biofuels and more energy efficient forms of fuel for transport.