Written answers

Wednesday, 14 September 2011

Department of Communications, Energy and Natural Resources

Departmental Schemes

9:00 pm

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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Question 495: To ask the Minister for Communications, Energy and Natural Resources if he will respond to the issues raised by persons (details supplied) in County Kilkenny outlined in correspondence to his Department on 22 December 2010; the number of applications received under the biofuels obligation scheme; the cost of the scheme to date; if a compensation scheme is now needed to assist those who invested in biofuel schemes with the assistance of the Department and now find their business not viable due to rule changes introduced by his Department; and if he will make a statement on the matter. [23578/11]

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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The issues raised in this case at the end of 2010 were responded to directly by way of letter to the company concerned. The Biofuel Obligation Scheme was enacted and introduced in July 2010 in order to help deliver on the mandatory EU target of 10% renewable energy in transport by 2020. Since the scheme was introduced, 16 companies have applied for certificates under the scheme. In 2010, over the first six months of operation, certificates were awarded for 92,516,069 litres of biofuel placed on the market. This represents a very significant increase in the amount of biofuels being used in the Irish market.

The Scheme requires large suppliers of road transport fuels to include a certain percentage of biofuel, across their general fuel mix, and works on the basis of tradable certificates. Currently the obligation is for 4% of overall transport fuels to be biofuel, but this obligation will increase over time and by 2020, suppliers will be required to include 10.5% biofuel in their fuel mix. Suppliers can meet their obligation either by placing the biofuel on the market themselves, or by purchasing certificates from companies that sell higher blend biofuels to market. The scheme is not exchequer funded.

Before the Biofuel Obligation Scheme, the use of biofuels in Ireland was incentivised under the Mineral Oil Tax Relief (MOTR) schemes. Excise relief under MOTR was granted only to a limited number of companies under terms set out in the Finance Act 2006. These terms specifically included volume limits, and a clearly stated end date for the relief of 31 December 2010. The Government's Bioenergy Action Plan, published in 2007 explicitly stated that a national Biofuels Obligation would replace MOTR as those schemes came to a close. The issue of a compensation scheme does not therefore arise.

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