I propose to take Questions Nos. 167, 190, 206 and 217 together.
In the recently published Green Paper on a Sustainable Energy Future for Ireland, the Government made a firm commitment to promote the renewable energy sector in Ireland. Overall responsibility in this area rests with the Minister for Communications, Marine and Natural Resources, who is leading a cross-Departmental, cross–agency approach in developing and implementing renewable energy policy. As part of this strategy, a Ministerial Taskforce has been established to prepare a road map to develop Ireland's bioenergy resources to 2020. I am working closely with Ministerial colleagues, as part of this Taskforce, to prepare a comprehensive National Bioenergy Action Plan by the end of this year.
I believe that agriculture and forestry have an important role to play in this area, as they provide many of the raw materials with potential uses as renewable energy resources. Biofuels is one element in the development of renewable energy. Agriculture and forestry has the potential to be the source of many feedstocks for biofuels. For example, oilseed rape, wheat and sugar beet can be used for the manufacture of liquid transport biofuels, while forestry by products and other farming and food by-products such as meat and bone meal and tallow, can be used for energy/heat generation. Tallow can also be used for biodiesel production. Other energy crops such as short rotation coppice and miscanthus can be used for heat and electricity generation.
Support to farmers for the growing of energy crops may only be granted in accordance with EU regulations. Currently, such support is provided by way of the Energy Crops Scheme, which was introduced under the reform of the CAP. Under this scheme, energy crops may qualify for aid of €45 per hectare provided they are intended primarily for use in the production of biofuels and electric and thermal energy produced from biomass. In addition to this scheme, set aside land can be used for a variety of non-food uses including the growing of crops for energy purposes and will therefore qualify to activate set-aside entitlements under the Single Payment Scheme. The EU Commission has recently published a Report on the implementation of the scheme, which my Department is examining.
Developing an indigenous biofuels industry is a core component of Government policy to improve sustainability. I am confident that the extension in the last Budget of excise relief of €205m which, when fully operational, will support the use and production of 163 million litres of biofuels annually, will help drive additional demand for the production of energy crops.
Wood biomass has the potential to play a major role in Ireland's National bio-energy strategy. It can be used for a variety of energy uses such as generating electricity, heat or as combined heat and power (CHP). I believe that the exploitation of the wood resource especially pulpwood, sawmill residues and harvestable forest residues offers enormous potential and could contribute significantly to our energy and heat requirements. Ireland has an excellent growing climate and an ongoing supply of raw material for wood fuel.
The Forest Service and COFORD are actively encouraging the development of the wood energy sector in Ireland through support schemes, primarily aimed at developing an effective and efficient supply chain from forest grower to end user. The Forest Service is currently examining the introduction of a Wood Biomass Harvesting Machinery Scheme to support investment in wood biomass processing machinery, such as whole tree chippers and forest residue bundlers. We are directly promoting the use of wood biomass by the installation of a wood heating system at the Department's offices at Johnstown Castle.
Short rotation coppice and miscanthus have considerable potential for heat/electricity generation. The production of these crops is relatively undeveloped in Ireland due to high initial establishment costs and lack of economies of scale. My Department has received a number of proposals for the introduction of establishment grants for miscanthus and these are also being considered.
Meanwhile my Department in conjunction with Teagasc and COFORD has examined the potential of energy crops, wood biomass and farming and food by products. Last year, we began providing direct funding, on a competitive basis, to support priority research projects in relation to biofuels. This funding is channelled through the Department's Research Stimulus Fund Programme. Five projects directly relating to biofuels and energy crops have been awarded total grant assistance of some €1.5m.
Several by-products of the farming and food processing industries such as meat and bone meal, tallow, animal manures and food by-products can be recovered and used in various ways as biofuels. There are significant opportunities for the use of animal by-products as biofuels some of which are being considered actively. Commercial realities are driving these proposals. The disposal of by-products imposes a cost on industry and it makes economic sense to offset this cost by realising the potential of the by-products as an energy source. Tallow is used at present as a biofuel in thermal boilers in rendering plants and larger meat export plants to provide energy. A recent EU Regulation provides for the conversion of tallow to biodiesel. Some rendering plants are considering building biodiesel plants for this purpose using various combinations of tallow, recovered vegetable oil and rapeseed oil.
With the reform of the Common Agricultural Policy (CAP) in 2003, farmers now have the freedom to exploit new opportunities, including agricultural production for non-food uses. I believe the development of this sector presents a new opportunity for farmers and rural communities. It will help stimulate diversification of farm incomes, generate sustainable employment and contribute to the development of rural economies. We are at the early stages of development, but significant progress is already being made. The development of bioenergy is and will continue to be a priority for Government.