Bernard Durkan (Kildare North, Fine Gael)
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Question 373: To ask the Minister for Agriculture, Fisheries and Food the acreage dedicated to the production of biofuels in 2007; her projections for the future; and if she will make a statement on the matter. [21907/07]

Mary Coughlan (Donegal South West, Fianna Fail)
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The area devoted to energy crops has increased to meet the growing demand for biomass feedstocks. The area of oilseed rape, which is used to produce liquid biofuel, increased from 5,000 hectares in 2006 to 7,500 hectares in 2007. In addition, almost 800 hectares of willow and miscanthus were planted in 2007 following the introduction of establishment grants under the new Bioenergy Scheme. The developing Bioenergy market and attractive grants on offer are encouraging farmers to plant more land with energy crops. As set out in Budget 2007, €14 million is being made available over the period 2007-2009 to incentivise farmers to grow energy crops. The funding includes €6 million to support a new energy crop premium of €80 per hectare. The €80 premium will be paid, subject to certain conditions, as a top-up to the existing EU premium of €45 per hectare available under the EU Energy Crops Scheme. A further €8 million is being made available to provide establishment grants to farmers interested in planting willow and miscanthus.

The future outlook for energy crops depends on a number of factors, not least profitability at farm level. In general, the production of energy crops will have to be demand led and will only occur if the economic returns are greater than those offered by more traditional outlets. In the short-term, the soaring world demand for grain is likely to lead to an increase in the area devoted to conventional cereal crops in Ireland and elsewhere in response to the current high grain prices. More long-term projections are difficult to forecast at this stage. Much will depend on the rate of development of production and consumption patterns for biofuels over the next number of years. To stimulate demand for biofuels, the Government is providing over €200 million in excise relief and plans to introduce a new 'biofuel obligation' to ensure that biofuels represent 5.75% of Ireland's transport fuel market by 2009 and 10% by 2020. The European Commission recently adopted a new binding target of 10% for the amount of biofuels used in transport fuel by 2020. These measures should provide the long-term market certainty required to allow the biofuel industry develop to sufficient scale in Ireland and in turn create market opportunities for locally produced feedstock.