Paul Connaughton Snr (Galway East, Fine Gael)
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Question 170: To ask the Minister for Transport the steps he proposes to take to replace the excise duty refund for public transport services which is being terminated on 31 October 2008; and if he will make a statement on the matter. [24890/08]

Noel Dempsey (Meath West, Fianna Fail)
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The EU Energy Tax Directive incorporated special derogations which allowed specific excise duty reliefs to be applied in a number of Member States below the EU minimum duty rate. In the case of public transport services under my responsibility, these derogations included reduced rates to apply to fuel used for scheduled bus services. Scheduled bus services comprise bus passenger services provided by Bus Átha Cliath, Bus Eireann, private operators in accordance with bus route licences under the 1932 Road Transport Act and holders of Authorisations pursuant to European Council Regulation 684/92 as amended. While these derogations expired on 31 December 2006, Ireland, along with other Member States, sought retention of its derogations beyond that date. However the European Commission, which is the deciding authority, has to date refused all such requests. The Finance Act 2008 provided the basis for the removal of these excise duty reliefs with effect from 1 November 2008.

My Department, in conjunction with the Department of Finance and other Departments, has been exploring whether alternative support mechanisms could be appropriate and could be done in a manner compatible with EU State Aid and other legal requirements. My Department has also met the Coach Tourism and Transport Council, as well as CIE, on this matter. My Department has also received a written submission from the Coach Tourism and Transport Council. While my Department is in discussion with the Department of Finance on these issues, it is necessary to stress that, despite claims being made otherwise, introducing an alternative suitable mechanism is not a straightforward matter in the current economic climate.