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Seanad Éireann debate -
Wednesday, 18 Nov 2009

Vol. 198 No. 5

Bio-fuel Obligation Scheme: Motion.

I welcome the Minister for Communications, Energy and Natural Resources to the House to discuss No. 38, Private Members' motion No. 26 on the introduction of a bio-fuel obligation scheme.

I move:

That Seanad Éireann welcomes the Government initiative to introduce a biofuel obligation scheme in July 2010, in view of the benefits accruing in terms of emissions reductions from transport, in terms of increased security of supply for road transport fuel, and the increased potential for employment and economic activity from domestic production of biofuel.

The motion is a consequence of the renewable energy directive from the European Community. This places an obligation and a requirement on all member states that 10% of energy used in transport shall be renewable by 2020. It is recognised that bio-fuels will have a central role to play in this. Bio-fuels will not be used exclusively because there is developing technology in the area of electric vehicles.

I wish to raise a point of order. This concerns Standing Order 41, which suggests that every amendment must be relevant to the motion to which it is proposed. I do not expect a ruling immediately because the Leas-Chathaoirleach might need time to consider this matter. The amendment proposed by the Opposition is not valid.

The Chair has already ruled on the amendment.

On a point of order——

I have taken the point of order but the Chair has already ruled——

With respect, I have not yet made the point of order. It will only take half a minute to hear this point. The amendment deals with a proposed merger of Bord na Móna and Coillte. It is unrelated to introducing a bio-fuel obligation scheme that is designed to meet EU regulations. The motion and the amendment concern different subject matters, are mutually exclusive and incompatible.

The Chair has ruled on this amendment. We cannot question the ruling of the Chair. Senator Walsh can make his points in his contribution.

I will continue to make my points in my contribution. These two subjects are completely different matters. Standing Order 41 states that if the wording of an amendment is a direct negative to the motion——

Is a point of information allowed?

There is no such thing as a point of information.

On a point of order——

Senator O'Reilly can make his point when proposing his amendment.

The amendment is neither mutually exclusive nor compatible. Where an amendment negates the motion, as this does by taking away the wording of the substantive motion——

The amendment is not yet before the House. We are debating the motion.

I am speaking on the motion. I am continuing my point in respect of the motion. In fact, the amendment is an entirely different sentiment and from the point of view of debating, particularly in the Houses of the Oireachtas, it is important that the normal rules of debate apply. Therefore, amendments should and must be relevant.

Senator Walsh is questioning the Cathaoirleach's ruling.

I am putting the point for the consideration of the Leas-Chathaoirleach.

Senator Walsh is filibustering.

I cannot consider that matter. Senator Walsh must address the motion. The Cathaoirleach has ruled on this motion already.

This is a filibuster.

It is not a filibuster.

Senator Walsh, without interruption.

I would like to continue without interruption and I would like the Leas-Chathaoirleach to consider my point. There is merit in what I say if one reads the motion and the amendment. The amendment has no relevance to the motion.

In supporting the motion, we have moved a great deal in a short space of time towards embracing green energy and the requirement to reduce our CO2 emissions. Our compliance with the renewable energy directive is another significant step in this direction. The Government has recognised this in the past. In 2005 the first pilot programme for mineral oil tax relief on bio-fuels was introduced, covering three bio-fuel categories and amounting to €6 million in revenue forgone. I was pleased that two of the initial three companies, including Biogreen Energy Products Ltd, were based in Wexford. I know the work they have done in this regard. This was followed, in the 2006 budget, by an extension of the scheme, which was valued at approximately €200 million in excise duties. That embraces four categories of bio-fuels.

Bio-fuels will be one part of this and we must also consider developing technology. The Minister and his party have been strong on the matter of electric vehicles. This appears to have significant potential. A decade or more ago bio-fuels were seen as very significant players in moving towards greener energy policies. However, embracing that policy, particularly in the United States and elsewhere, raised ancillary or peripheral difficulties. Using land for bio-crops had an impact on agricultural products and the growth of food and, as a consequence, on commodity and food prices. I understand the European Union is examining a more sustainable approach in this area and this needs to be done. However well intentioned policies are, they can have unforeseen knock-on effects in other areas which need to be taken into account and factored in in what we do. Having said this, it is accepted by everybody that bio-fuels will have a contributory role to play in our energy policy.

The new scheme will have four product types, including bioethanol which will be used in a blend of up to 5% in petrol and EN 590 which will contribute up to 5% in the blending of diesel. In the pure plant oil category, rape and other such products, including wheat, can be fully converted and used in vehicles. Some movement has been made towards this but I am not sure to what extent. Overall, the success of the policy has been underpinned by the fact that approximately 200 million litres of these products combined have availed of mineral oil tax relief and this will make a significant contribution to achieving the targets we have set and which the European Union obliges us to meet. The main product is EN 590 which is mixed with diesel and has significant potential. In the White Paper on energy policy the Government set a 10% target and committed us to this bio-fuel obligation. I welcome the fact that the Minister and the Department embarked on a consultation process and received more than 40 submissions. Their input to the final drafting of the bio-fuel obligation Bill which is taking place will be reflected in the Bill when published. It is also significant that almost half of EU member states have introduced bio-fuel obligations; therefore, we are playing our part in this regard.

The Minister and the Department appointed the National Oil Reserves Agency to be the administrator of the scheme. It is heavily involved and has a responsibility to ensure we meet EU and international requirements for maintaining emergency oil supplies. It leased an oil tank farm in New Ross from a local company and filled it with emergency oil supplies. As an aside, the port of New Ross would prefer if the product was not being stored but moving in and out and generating activity and revenue in the port. However, it is worth noting that it is being stored. The agency is funded by a levy on mineral fuel which will be extended to cover bio-fuels and meet the additional costs attached to administering bio-fuel obligations. The levy includes a bio-fuels element and increased from 1 cent to 2 cent. It is important and careful consideration is being given by the Minister and the Government to ensuring this transformation is made in a way that does not significantly increase costs for the transport industry. This is essential at all times. Competitiveness in the economy is a major issue and challenge for us. We all recognise that there has been slippage in the past decade with the economy in a very significant growth graph. It is important that in anything we do by way of the levy or transference into the green energy sector we ensure we do not add too significantly to our cost base.

We must have regard to what is happening in other countries. As this is taking place in other countries, it should underpin our competitiveness. At local government level and in State agencies there is a propensity to load costs, which are expenditure items. If these expenditure items are not managed very tightly and efficiently, it means inefficient costs are being added to the economy. We need to be mindful of this.

I note the introduction of a bio-fuels obligation certificate which I understand will be electronic. A certificate will be claimed and awarded for the supply of each litre of fuel oil. Conditions are attached to how people will qualify for them. The administrator will be involved and have evidence. He or she will have the power to reject or revoke certificates if information is subsequently found to be false. These will be tradeable in the industry at an indicative selling price of approximately 45 cent per litre. This will assist those specifically involved in the green fuels sector as distinct from the hydrocarbon sector. It will also enable the hydrocarbon sector and industry to comply by being able to purchase certificates and ensure they meet the requirement and play their part in reaching the 10% target. The Bill is being drafted and will come before the House. I look forward to debating it when it does.

I am very happy to second the motion. I welcome the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan. I have great admiration for the man because every time I hear him in a radio interview he has his facts and I heard him discussing this issue recently. Nobody is ever able to nail him on anything; he always has his facts right. In politics one never knows what tomorrow will bring but I wish him well. He is doing a great job so far.

The renewable energy directive has placed a requirement on all member states for 10% of the energy used in transport to be from renewable sources by 2020. Bio-fuels have a central role to play in the delivery of this target as one of the few available and effective means of reducing emissions from transport, with developing technology and electrical vehicles. This morning I heard a debate about electrical vehicles which is creating spin-off industries as people are going into business because they believe electrical vehicles are too quiet and cannot be heard. Perhaps the Minister has a comment to make on this aspect. Somebody is in the process of developing various sounds for electrical vehicles.

Following the success of the scheme, a second and more ambitious scheme was announced in the 2006 budget. Scheme II will run until the end of 2010 and is valued at over €200 million in excise forgone. The scheme set out four categories of bio-fuel. A total of 102 applications were received under the scheme, including 11 applications in the bio-ethanol category. I understand that as the scheme was oversubscribed, a number of applications were not facilitated. Perhaps the Minister can comment on that issue.

The Government White Paper on energy policy commits to the introduction of a bio-fuel obligation which will underpin the delivery of national bio-fuel targets and take account of EU developments. Farmers are being encouraged to grow bio-fuels such as rape seed on unutilised land. I recently spoke with farmers on this matter while attending an IFA meeting at the Davenport Hotel. Farmers will not grow a crop if it is not profitable, no more than I would open a furniture shop tomorrow if I could not sell furniture. What incentives will be offered to farmers who grow bio-fuels? Farmers are on their knees at present and there is no way they will enter a business which might be loss making.

A number of member states have introduced bio-fuel obligations. For example, the UK introduced a renewable transport fuels obligation in April 2008. Why do public transport companies and State bodies such as the Army and An Post continue to use diesel rather than renewable energy sources to fuel their fleets?

The National Oil Reserves Agency, NORA, is responsible for ensuring that Ireland complies with its EU and international requirements for emergency oil supplies. The agency is funded by a levy on mineral fuel collected from oil suppliers. It also enters into contracts with oil suppliers for the purposes of leasing oil storage. On that basis, it was deemed that NORA — I do not mean the song — was by far the most appropriate administrator for the bio-fuel obligation.

Farmers have also made the argument that we will experience food shortages within the next 20 years if we do not utilise the land for food production. We should not be speaking about pie in the sky because farmers will not grow bio-fuel crops if they are not profitable. The Minister is doing an excellent job and I am confident that anything he tackles will work out successfully.

I move amendment No. 1:

To delete all words after "‘Seanad Éireann"' and substitute the following -

"welcomes Fine Gael's NewERA policy to accelerate the development of the bio-fuel and bio-energy industry in Ireland through the merger of Bord na Móna and Coillte to create a new state company called ‘BioEnergy Ireland' that will aim to become a global leader in the commercialisation of next generation bio-energy technologies for transport, home and district heating and power generation.".

Is the Senator sure he is in order?

Senator O'Reilly, without interruption.

I will return to that issue presently. Fine Gael welcomes in principle the 4% bio-fuel obligation scheme for the stated objectives of achieving security of supply, increasing employment and economic activity and reducing carbon emissions. Crops such as corn, soya bean, flax and rape can be grown for bio-fuel production. Animal and vegetable oils can also be used. However, the difficulty with achieving the 4% obligation, which is necessitated by the renewable energy directive, is that 70% of our bio-fuels are imported. The carbon footprint incurred by the transport of large quantities of bio-fuels from South America or Africa would defeat the overall objective of the obligation and make a mockery of climate change policy.

I understand the obligation will increase the price of petrol and diesel by 1 cent per litre. The chief executive of Maxol has already warned that the charges will be passed on to consumers. If drivers are going to incur a charge, it is important that domestic production is maximised. However, the motion proposed by Fianna Fáil does not contain a roadmap for achieving 100% domestic production of bio-fuels. The Irish Bioenergy Association estimates that meeting the bio-fuel obligation from Irish production will lead to €170 million in direct economic activity and create 1,700 jobs.

The option of domestically producing bio-fuels is becoming more attractive as fossil fuel prices increase. In its job creation strategy, Fine Gael set out a roadmap for domestic production of bio-fuels. Senator Walsh missed that point in his reading of our amendment. I am happy that his point of order was rejected because our amendment is very relevant to the motion to the extent that it underlines the absence of a roadmap.

We welcome the motion but propose a new strategy. Bord na Móna, Coillte and the National Council for Forest Research and Development should be brought under the same umbrella to create and finance a new State company called bio-energy Ireland which would invest €800 million between 2010 and 2013 in next generation bio-energy technologies in the area of bio-mass, combined heat and power generation and transport. We would develop five new production plants to produce an additional 150,000 tonnes of bio-diesel, a reforestation programme on an estimated 20,000 hectares and bio-mass combined heat and power plants at high energy demand locations such as hospitals, industrial estates and hotels. The return on this investment will come from diverting the resources we currently spend on imported fuels in these sectors. To the extent that these plans will achieve the objectives set out in the Fianna Fáil motion, the amendment is extraordinarily pertinent and necessary. I am sure Senator Walsh will on mature recollection — to use the hackneyed phrase — see the point of my argument and support the amendment. Unanimous support for the amendment would give the motion real relevance.

The motion and amendment are complementary.

When we discuss bio-fuel we must be conscious of the food versus fuel debate. Bio-fuel production must not displace food production or cause price inflation in food. The food versus fuel debate came into sharp focus with recent food shortages and inflation in food prices. Bio-fuel production must, therefore, be controlled to ensure it does not displace food production.

Teagasc has estimated that up to 100,000 hectares of land could be used for bio-energy crops without damaging, interfering with or putting at risk our food production targets. Ireland has food surpluses and has the capacity to grow sugar cane and flax. A significant amount of land in my constituency, which I share with the distinguished Acting Chairman, Senator Wilson, was traditionally used to grow flax. Much of this land is not suitable for growing arable crops and would be more appropriately used to grow flax. In addition, land previously used to supply the sugar industry, which has since closed in this country, could be used for bio-energy crop production. Ireland has the advantage of having land available to produce bio-energy crops without prejudicing food production or placing at risk the volume of food the country produces. Maintaining current food production levels and feeding the world's population must take precedence over other objectives.

Senator Brady was correct that no credit institution will support someone seeking to establish a furniture store or other enterprise that is not viable. Incentives are required to encourage farmers to produce crops used in bio-fuel production. Investment in this area will provide a return and will be labour intensive, a key advantage when jobs have been lost in construction and other areas.

Bio-fuel production must not lead to increases in the retail cost of petrol and diesel. This is a major issue in Border areas. If one adds 1 cent per litre to the cost of fuel, as envisaged under the obligation, introduces a carbon tax and factors in normal increases in the price of fuel, it is possible the price of fuel could reach a level that would put retailers along the Border and further south out of business. This issue needs to be addressed and I ask the Minister to raise it at Cabinet level.

I ask the House to adopt the Fine Gael Party's plan as a positive and constructive means of achieving the objectives of the motion.

I second the amendment. I wish to share time with Senator Paddy Burke. I welcome the Minister. It would be relatively difficult in a spot the difference competition to identify significant differences between the proposals set out in the Government motion and Fine Gael Party amendment. As the Minister will acknowledge, the Fine Gael Party has in recent months produced substantial policy proposals and documentation on alternative energy generation.

While I appreciate this topic has been at the top of the Minister's agenda since taking office in summer 2007, it is time to move from words to deeds. Alternative energies such as bio-fuels, biomass, wind and wave power have been part of political debate for the past decade. Senators will concede, however, that progress has been limited, although progress has been made on wind farms and, to a lesser extent, on wave power.

If we are to solve the energy crisis and tackle global climate change, we must not allow this issue to go unheeded. Through this amendment and, more important, its policy proposals, the Fine Gael Party is highlighting that we have a once-off opportunity to address the issues of climate change and energy security by providing an Irish response to the global energy crisis. This can be done by producing energy on Irish soil through wind, wave and bio-fuel production.

I come from the north Cork area which for many years enjoyed the benefits of a sugar processing industry. Interest among farmers in the opportunity to produce bio-fuels is substantial. Hundreds, if not thousands, of farmers could be given a financial lifeline if we introduced plans to develop a bio-fuel industry.

Senator O'Reilly's warning not to ignore the debate on food versus fuel is valid. Three or four years ago our embrace of bio-fuels may have been excessively enthusiastic. However, closer scrutiny of significant progress made in South America, particularly Brazil, revealed that forests were being destroyed and the natural food chain affected by the introduction of crops used for bio-fuels. We must maintain a balance. We may not be able to use every acre of land for fuel production but a vast amount of land could be used to grow crops for fuel production without affecting the supply of food.

The Minister and his colleagues must make the transition from words, reports, proposals, promises and projections to action. There is general agreement on the scale of the economic crisis and the need to solve it immediately, starting with next month's budget. In all the darkness and gloom surrounding the economic debate, the energy crisis and global warming we should be able to work together to bring plans to expand bio-fuel production to fruition.

I ask the Minister to reflect seriously on the Fine Gael Party amendment. He will have debated this topic in the Other House with my party's representatives. A great deal of hard work has been invested in producing the Fine Gael Party's policy proposals. They provide a basis for the action required to address the energy crisis. I welcome this debate on an issue that must remain at the top of the political agenda in the coming months. I hope, however, we will be able to move from words to action.

I thank Senator Bradford for sharing time and enabling me to contribute to the debate on this interesting topic. I welcome the Minister who has a great attendance record in the House, particularly for debates on bio-fuels and wind and wave energy. I extend my best wishes to all those involved in a project off the coast of Belmullet in west Mayo.

I am not surprised Senator Jim Walsh was excited by the Fine Gael Party amendment given that it is more positive than the Government motion. The Minister should incorporate this positive amendment in the motion. Deputy Coveney should be congratulated on the work he has done on researching and developing the plans set out in the NewERA policy document, under which Bord na Móna and Coillte would be merged in a new semi-State body known as bio-energy Ireland. This plan would create 100,000 jobs and generate large sums for the economy.

Does the Minister have plans to have the railway network electrified? Electrification of the rail network is under way in a number of other jurisdictions where rail is recognised as the greenest transport sector.

It is estimated that approximately 30% of bio-fuels in Ireland are produced by Irish companies. However, the 4% obligation for bio-fuels which the Minister has proposed will represent a significant increase. We will not be able to produce such a level of bio-fuels locally. Therefore, a majority of it will be sourced abroad. This will incur a cost in terms of the miles required to transfer the fuel to Ireland. Senator Bradford raised an important point, namely, the issue of farming and the closure of sugar factories in Carlow and Mallow. There is a golden opportunity to put in place alternative farming practices to produce bio-fuels in those locations. As Senator O'Reilly said, we have to be conscious of the food for fuel debate in this area. Does the Government have any plans to generate locally the 4% bio-fuel obligation it has put in place rather than importing bio-fuel? We are trying to increase our own resources and export bio-fuel in the long run.

A number of licences were issued to various people for the production of bio-fuels. Some have not started production or seem to have no plans to produce bio-fuels. Others, some of whom operated schemes which were up and running, sought licences but did not receive them. The Minister should re-examine the issue of to whom the licences were allocated. If those who did not receive a licence have continued to operate their schemes and need a licence, their situation should be regularised. The Minister should examine the licensing issue.

I am glad to be here to debate this very useful motion which allows us to review what is happening in this complex and important area. It is important for a number of reasons. In a world where we will see increasing difficulty in accessing cheap, reliable supplies of oil we have to start providing for the security of the country and develop an alternative supply to light sweet crudes which have been available for the past 100 years. The provision of bio-fuels is a key strategic objective behind the develop of such a strategy. In terms of meeting our climate change targets, which include reducing our emissions, it is one of the elements which will provide us with an opportunity to cut back on our emissions to the extent scientists say is needed.

Transport and the other areas where emissions occur, especially in the energy area, are probably the most difficult, the fastest growing and therefore the most important for us to pay attention to in order to see how we can make reductions. We are doing a number of things. The changes in the VRT system have worked in terms of making our vehicles more efficient. Senator Brady referred to the switch to electric vehicles which will be a very significant component in our move away from the use of oil.

The sustainable transport plans in place will achieve the same objective. No matter what way one looks at it, even adding those initiatives and changes does not provide us with the reductions in emissions we need. On that basis, properly sourced bio-fuels which have real emissions reduction results in their production are an important part of our strategic intent.

In terms of where we are going, it is very much part of a European initiative. The European Union, as part of the overall 20-20-20 target of emissions reductions, renewables development and efficiency gains which was agreed by Heads of Government earlier this year, set out within that a target for 10% use of renewable energy in transport for all member states by 2020 which sets our objective in terms of what we wish to achieve and is the reason this new obligation scheme has been introduced.

It is recognised that this is a sensitive, difficult and complex subject. A number of developments in recent years have drawn attention to the complexity and sensitivity of the development of bio-fuels. There is a real concern bio-fuels may be connected to the recent spike in global food prices, particularly the effect of the American policy on the development of bioethanol and its effect on wheat prices. It is something of real concern and has to be examined.

It would seem that much of the speculative activity which took place in commodity markets during 2007 and 2008 is something of which we have to be aware and protect against. The fact that land use changes may occur in the development of bio-fuels which have a significant detrimental effect in terms of protecting biodiversity and the sustainability of communities in distant parts of the world is a real concern against which we have to protect. It is because of that reason, namely, the precautionary principle, that I revised our targets, which were set at 5.75% of bio-fuels in the supply in this country by 2020 to the new target of 4%. However, there is a difference. The target of 5.75% was not mandatory whereas the 4% target is obligatory and one which has real effect.

The role of the European Union is important because in addition to setting those targets it gives certain criteria for working with us in terms of developing sustainability criteria to address concerns such as land use changes and emissions reductions. Its suitability criteria will be in place early next year, in time for us to apply them in any new obligations scheme. It is clear they will include a provision whereby there must be a measurable 35% reduction in greenhouse gas emissions in any new fuels which are supplied. These will be done on a "well-to-wheel" or "field-to-well" basis, whereby one measures the entire supply chain in terms of the production, transportation and processing of crops for bio-fuels to find out the real emission reduction. The effect of the use of fertiliser and chemicals is also taken into account.

The criteria the European Union sets also stipulate land use requirements to ensure we are protecting biodiversity and are not chopping down rainforests to grow palm oil to turn into bio-diesel here. That would be the most short-sighted approach we could take. Crucially, the European Union said it will include social conditions within the overall consideration of emissions reductions and the nature of the land use which is affected. That wide range of conditions is a crucial first step in any bio-fuel development and we must ensure these conditions are introduced effectively and deliver on the protection criteria we have put in place.

In terms of what we will do in this country in that regard, we will live within those criteria. It will allow us to promote and see the development of indigenous fuel production which will meet the emissions reduction concerns and we will not have the same land use concerns which exist elsewhere. There are limits to what we do. A large amount of our fuel supply comes from waste products, which is beneficial in terms of emissions reductions and solving other waste problems.

There is an opportunity for us to switch to the use of arable land for the production of feed stocks for bio-fuels. However, the percentages and abilities are limited. Certain targets can be reached but we do not have endless capacity to switch to arable production. In response to what Senator O'Reilly and others said, we are intent on developing indigenous opportunities for economic benefit and the security of our supplies.

In terms of where we are going and what is changing, one of the main changes is a move away from the excise relief scheme which was termed the bio-fuels mineral oil tax relief scheme introduced in 2005 and 2006 and which awarded excise tax relief to 18 projects for the period up to 2010. That scheme will come to an end next year. The bio-fuels obligation scheme which will operate in tandem with it for a short period will eventually take over from it as the mechanism by which we will ensure the sustainable delivery of bio-fuel crops. It is already evident that the mineral oil tax relief scheme has led to the introduction of bio-fuels here. It is typically allowing for blends of approximately 5%. In 2008 the penetration or use of bio-fuels in the Irish oil market was approximately 1.6%. We expect that figure to increase to approximately 2.5% this year. The scheme has already served its purpose, which was to get businesses to set up here. Five bio-fuel plants have been constructed and a number of others are at an advanced planning stage. It has achieved its effect in terms of getting the supply chain up and running. The 2.5% figure I have mentioned is in our tanks, without motorists having to bear the cost. The price of oil has returned to a high level of between $80 and $90 a barrel. I do not believe the figures quoted by Senator O'Reilly for the cost of bio-fuels. One has to be careful in this regard. It largely depends on what is the price of oil. My prognosis, looking at the envisaged peak in global oil production, is that oil will become more expensive. These bio-fuels can be delivered without additional costs being incurred by Irish motorists. In effect, this mechanism will help to keep prices down.

One of the problems with our excise tax relief system was that it did not provide for a very stable market. The difficulty for Irish suppliers, or any supplier, was that they were bidding in a very volatile market, even with the tax relief system in place. It was impossible for companies, other than the 18 bidders, to actually get into the business. The benefit of the obligation system is that it provides a much more stable market because its graduated increases are mapped out. It is not a market that can go on the basis of changes in oil prices. It is guaranteed that a certain percentage of our fuels have to come from bio-fuels. That stability will help producers here. The tradeability of the certificates will allow small indigenous producers, in particular, to get into the market and develop their businesses.

We have engaged in a widespread public consultation process, in terms of how our new bio-fuel obligations will work. We have received approximately 40 submissions. We are following the examples of obligation schemes in other countries, including the United Kingdom, which have introduced similar schemes. We are introducing a scheme by applying in this jurisdiction the good experience of operations elsewhere. It is an effective and relatively easy system. It is not bureaucratic or complex. As I said, it is based on tradeable certificates. Every litre of bio-fuel brought to the market earns a certificate, regardless of who brings it. At the end of each year mineral fuel suppliers will be required to surrender certificates to a value of 4% of the volume of mineral fuels brought to the market.

The National Oil Reserves Agency, NORA, is responsible for ensuring Ireland complies with its EU and international obligations for emergency oil supplies. The agency is funded by a levy on mineral fuels collected from oil suppliers. It enters into contracts with oil suppliers for the purposes of leasing oil storage. On that basis, I determined that NORA was the best and most appropriate administrator of our new bio-fuel obligations. Oil companies and consumers currently make returns to my Department. The levy applicable to individual companies is articulated by NORA based on these figures. NORA charges companies accordingly. The cost of administering the bio-fuel obligation will be met by extending the NORA levy to cover bio-fuels currently exempt. Obligated parties will be required to apply to the scheme administrator for a bio-fuel obligation account and provide details of their fuel sales on a monthly basis. Obligated parties and other suppliers of bio-fuels may apply for certificates for the bio-fuels they place on the Irish road transport market. A bio-fuel obligation certificate is awarded for the supply of each litre of bio-fuel as long as certain conditions are met. If the administrator believes these conditions have not been met, or if the information or evidence on the basis of which the certificate was issued is subsequently found to have been false, he or she will have the power to revoke the certificate.

Bio-fuel obligation certificates may be traded across account holders. Obligated parties who have not been able to fully meet their obligations by supplying bio-fuels will be able to purchase credit certificates from other obligated parties and thereby meet their overall targets. An obligated party who has a shortfall in his or her number of certificates at the end of a defined calendar year will be required to pay a non-compliance levy, calculated on the basis of the number of certificates by which he or she is short, multiplied by the established amount per certificate. These certificates have a number of roles. Their most important role is to protect consumers from structural rigidities in the fuel supplies market which could result in episodic periods of high fuel prices. Crucially, as I said, the certificates have a secondary role in allowing small suppliers, usually of higher blend bio-fuels, to access the market, particularly when the environmental value of their products is recognised. As I said, we may have a large number of niche supplies from the waste system, or from agricultural products, which can meet the sustainability criteria and have a competitive advantage over other international products.

I do not have any difficulty with the intent of the Fine Gael amendment which seeks to set out how best we can develop our resources. We will have to look at a wide variety of options of how we can develop our bioenergy and biomass industry. When the new obligation certificate is in place and we can see how the European standard system is being applied, we will have a clearer understanding of how Irish producers will fit into the market as it evolves. I am committed to doing whatever I can to make sure Irish farmers and business people end up producing these supplies. In such circumstances, we will have local fuel supplies in the event of a future oil shock, which is the best protection we can have. The Government is committed to meeting its EU obligations and its equal obligation to provide and protect jobs and keep money in this country, rather than importing fuel supplies from elsewhere. That is one of the main objectives of our energy policy.

As I said, I welcome this debate. This is not an issue without controversy. It is not necessarily the case that bio-fuels are good and other fuels are bad. One has to be certain where the bio-fuels are coming from. One has to know what are the environmental implications of bio-fuel production, sometimes in very distant parts of the world. I am committed to ensuring we do not damage other ecosystems for the sake of meeting our fuel supply obligations. We can do this, while meeting our security and climate change emissions reduction objectives. I welcome the debate as a means of advancing a wider understanding of what we are doing.

I welcome the Minister and this debate. The motion before the House is an appalling one and the amendment is not great either. When a motion welcomes something being done by the Government and an amendment welcomes something being done by Fine Gael, it is very hard for an Independent Member to find the middle ground. I wish to make it clear to the Minister that I want the Green Party to implement the low cost part of its agenda immediately. Senator Boyle has heard me say this many times. Those who are committed to the green agenda are wondering why there is a delay with the introduction of a foreshore Bill that will allow the proper operation of the connection. People across the road today told us why Shell could not bring its supplies ashore. I will not open that debate again. A guy who addressed the Joint Committee on Climate Change and Energy Security recently said huge work had been done on district geothermal heating in south-west Dublin. His company is ready to attract investment, but it cannot do so until legislation that will allow it to go down 2 km or 3 km — perhaps under other people's properties — with the certainty that it would reap the benefit of its investment has been passed.

That Bill is being fast-tracked. It will be introduced next year for certain.

I will not contradict the Minister and I am glad to hear it. That has been suggested to me, but I have not yet seen the Bill. I appreciate the Minister's commitment. I am saying people outside the Green Party also believe this is a really great idea and that it should be pursued. I am sure the Minister would prefer if I did not mention that the Joint Committee on Climate Change and Energy Security has produced an all-party foreshore Bill that does not threaten the Government in any way. I ask the Minister to accept that legislation and not to listen to the officials in his Department who are trying to slow him down on it. Let them make changes on Committee Stage or the Minister could take charge of the Bill himself and bring it through. It can be his Bill; it does not need to be anybody else's.

Earlier I heard reference to the various developments in Mayo. I met representatives of the local authority in Mayo who outlined their plans for the 500 MW wind farm at Bellacorick. They outlined their plans for bringing ashore wave energy and their plans on wind energy in the area. They have problems with planning legislation. The Planning and Development (Strategic Infrastructure) Act should be extended as quickly as possible to deal with these issues. The French Government manages to get around all the rules. In the past two weeks it has entered an agreement with Renault for the development of car batteries, which will be properly assessed for all this work.

Before the Minister goes, I wish to make one quick comment to him. In 1927 when we needed considerable help to develop electricity, the company that did the work on it was Siemens. I do not know whether the Minister has seen the recently completed study on sustainable urban infrastructure for Dublin commissioned by Siemens. It makes fascinating reading and outlines the levers that could be put in place. The research carried out independently by a group in University College Dublin indicated the levers that could be used to reduce the carbon emissions from Dublin. It lists them one after the other and while the issue of bio-fuels is lower down the list, it is in there. I am making the point that certain other things are more important. I do not want to delay the Minister. I ask him to recognise the issues in that independent research study. It shows the things that can be done and would pay for themselves. The study was completed from a commercial point of view and outlines what it would cost in investment and when it would pay back. For each of these levers it outlines what it would save in millions of tonnes of carbon per year and how many years it would take to pay back. This is what we need to do. I thank the Minister for his attention in that regard.

I also welcome the Minister of State, Deputy Curran. Before he came in I mentioned something in his constituency regarding the geothermal district heating project in his area. I ask the Minister of State to kick out around him to ensure it is done. This will allow us to lead in Europe. I will return to the study commissioned by Siemens.

We have the most harvestable wave energy in Europe off the north Mayo coast, where the average wave height over the year is 2.5 m. We can now simply deal with these things. I heard people here speak enthusiastically about the Spirit of Ireland project. There is nothing wrong with that project. It is not very efficient; it is only approximately 70% efficient to pump water up a hill and get it down again as is done in Turlough Hill, but it is a project that could work. In the meantime Deputy Coveney and the Oireachtas Joint Committee on Climate Change and Energy Security have done considerable work on electric cars as storage as opposed to all the other possibilities and while I am glad to see the Minister making progress in that direction, more needs to be done.

I said Renault has a special deal with the French Government and is first into the market on this issue. We could be doing that. We were first in the market for wave energy until approximately five or six years ago when we were overtaken by Scotland which now has wave energy connected to the grid in north-west Scotland. There are things that we are not doing.

The study funded by Siemens and carried out by a number of academics in UCD outlined a list of carbon abatement levers. I do not have time to go into these in detail; I would like to have a longer debate on it. Its top placed item, renewable energy generation, would save 1.4 million tonnes of carbon per year in the Dublin area. It is followed by building retrofitting, basically various forms of insulation; Transport 21, the Government's plan to improve public transport; modified petrol cars; a city district heating scheme, which is what is going on in the constituency of the Minister of State; modified diesel cars; and various other items. Vehicular bio-fuels appears ninth on the list, which is not unimportant but in the Dublin area it would only save 100,000 tonnes of carbon as opposed to renewable energy generation, which would save 1.4 million tonnes of carbon. We need to look at these things. I met representatives of Siemens to discuss the report because I was greatly impressed by it.

What does the Government expect the price of oil to be in one year, two years and three years? Some of the futures markets for next year are quoting $100 per barrel, which would make a significant difference. As we know it went higher than that before. If it went up to $200 per barrel, it would have a considerable impact on our plans. We need to move the matter forward. In addition we need to have a development particularly in photovoltaic solar panels, as opposed to water heating solar panels. A rich harvest in that area is also available in Ireland.

We are being hit by information coming from all sides. I am impressed by this academic study outlining the changes that would need to be made for this to work in Dublin. It has everything. It deals with the environmentalists, the investor and commercial and planning issues. It deals with the cost of investment, the period of payoff and the savings in carbon. All we need to do is compare that with what we will need to pay Europe in fines for not reducing emissions.

That brings me neatly to the importance of a climate change Bill — Senator Boyle will be surprised I have not mentioned it so far. I am prepared to second his climate change Bill if he is prepared to publish one quickly enough. If not, he might second mine, which might be somewhat more difficult. A climate change Bill needs to outline what we will do in the following years. We should benchmark the changes we need to make. I have only just touched on the issue. We need a business plan based on the various prices oil could reach in the next three or four years. I do not pick Dublin for any reason except that it is an urban area and most of the carbon emissions come from urban areas. It does not take from the need to deal with agricultural and other issues outside urban areas. This deals with issues. I recall Senator Butler speaking in very supportive terms of the Spirit of Ireland project in recent times. However, here is an issue for Dublin. It may not be as sexy as the Spirit of Ireland project which had everybody orgasmic about how important it was. While I agree it was important, it is not the most important because it did not deal with storage in an efficient manner, but it could be done. In order to get it going, first the wind farms need to be built. We have problems in that regard. Everybody is in favour of wind farms until somebody in the local community objects. What is going on is ridiculous. There are people who claim to be environmentalists who are not environmentalists at all. They hide behind the theory of environmentalists. The environment is far less important to them than the intrusion on them of the sight of a wind farm on the top of a hill.

In the first instance I would like to agree with Senator O'Toole in the sense that laudatory motions at Private Members' time and knee-jerk reactions to them may not be the best use of this time. The core issue of this debate is important to debate. As the Minister has already said it is important to get a progress report on it. On a personal basis I am tickled pink that we have the two Civil War parties arguing over the new green agenda. The reality is that we need to have this debate and consider its subject matter in its widest context. If Senators will pardon the pun, bio-fuel is part of the mix but is no panacea. We have learned that with great difficulty in a global sense. The European Union, which established markers which have now been disassembled, has at least now honestly faced up to the fact that putting all the eggs in this particular basket brings about environmental hazards as well as dealing with issues of fuel security and economic savings.

The bio-fuel market is an international one and is being pushed by those who see it as an economic opportunity. In pushing forward that opportunity there has been a looseness in adhering to environmental standards. The Minister is correct that in meeting the standards we have now laid down and which are enforced by the European Union, we must be aware of both the environmental and social consequences of how bio-fuel is produced and subsequently used. That being said, we have an opportunity to grow a bio-fuel market which for several reasons we have chosen not to pursue to a significant extent.

Excise duty exemptions have been in place for several years and serious questions must be asked about those who have chosen to avail of those exemptions, those who have not chosen to avail of them and the fact that among those granted the various exemptions, there is a total reliance on importing the bio-fuel itself. I am aware of only one Irish-based company which is in the business of refining bio-fuel that is produced in this country. It is ironic that this debate was introduced by Senator Walsh because I understand the company in question is based in New Ross and is not a beneficiary of the existing licensing and exemption system. As this is something that is coming to a close at the end of 2010, the Department of Finance and the Department of Communications, Energy and Natural Resources must review it critically because we seem to have got it very badly wrong.

Applicants must give a ten-year commitment.

That is correct. In regard to the new standards, it is important that the average of 4% is being struck given that the Minister has shown how the 5% and other standards have oscillated as we have been experimenting with this policy approach. With a 4% average there is a guarantee that in terms of cost savings and environmental benefit, as long as the bio-fuel can be shown to have a 35% improvement in terms of lower carbon costs, it is something we should go with. It is a question of putting a blend into what will remain into the medium term the number one fuel force in terms of consumers' transport needs. That is a reality we must recognise. However, that does not preclude the objective of achieving a higher percentage of bio-fuel in the blend or of developing 100% bio-fuel options, as has been done successfully by Carbery Milk Products in Inniskeen whose product is retailed through the Maxol network.

Other speakers referred to the potential perils of a fuel for food approach. There is no doubt, as the Minister indicated, that the rush towards bio-fuel in countries such as the United States and in emerging economies such as Brazil put great pressure on food prices in 2007 and 2008. A very poor balance was struck whereby in seeking to meet our overall energy needs, we neglected the food needs of much of the planet's population. On that basis, the question we must ask ourselves in an environmental sense, as Senator O'Toole indicated, is not the extent to which bio-fuels can replace our existing consumption patterns in terms of transport and other usages of fossil fuels but rather to what extent our energy consumption is necessary, sustainable and likely to grow into the long term. Those are the questions we are reluctant to ask because the assumption is that asking them will put at risk our future economic well-being. However, if we do not ask ourselves those questions, then we are not serious about building a sustainable future in terms of energy needs, with a role for bio-fuel within that, and all we are doing as a society is replacing something bad with something less bad. That is not a solution to our long-term environmental problems.

We must be serious in our approach to such issues as how we travel from A to B, the types of supports we are willing to give to public transport and the degree to which we can and will deal with renewable energies. I agree with Senator O'Toole that there has been a degree of frustration in terms of the failure to implement many aspects of the programme for Government in a timely fashion. However, with this debate, in the course of which the Minister has given a good exposition and progress report on what is happening in the bio-fuel area, we have also had today the Second Stage debate on the Foreshore and Dumping at Sea (Amendment) Bill 2009 which represents an important legislative contribution in terms of how we deal with environmental campaigning in the future. Without that, we cannot ratify the Aarhus Convention.

If there is to be effective public engagement on the environmental issues that face us as a nation and globally into the future, there must be a cultural shift as well as changes in legislation and replacement products. I continue to have trust and confidence in the Minister even though he chose to leave the Chamber before I made my contribution. This part of the energy and environmental agenda has benefited not only from the Minister's and the Government's approach but also from the honest approach taken by the European Union. The road on which we are embarked is of necessity paved with good intentions but we should never be afraid to turn back from that course and change tack as required. The Minister's statement on Government policy in this area is predicated on that simple truth. We must take the opportunity to get our proposals right. As a society, an economy and an environment, we will benefit from that policy approach.

I welcome the Minister of State, Deputy Curran, to the House. I am pleased to participate in this debate which allows us to examine the pros and cons of the bio-fuel issue. However, it must be looked at in a broader context because we can all too often get lost in a type of tunnel vision on this issue and drive on regardless of new insights. Much of the information I will contribute to this debate is from the Oxfam website which I reviewed as part of my research for this debate. There are many issues that are not immediately clear in respect of bio-fuels that must be taken into consideration when seeking to develop the sector.

Deputy Boyle referred to the increase in food prices in recent years as a consequence of the increase in bio-fuel production. There are many interesting articles in the newspapers which examine how we are living our lives and which explore how the recession presents an opportunity to re-evaluate where we are, what we are doing and how we do it. There is all types of advice in terms of economic savings, recycling and so on which essentially boil down to returning to the Ireland we had before the Celtic tiger stuck its paws in us all. In terms of being economical we are being advised to bring lunches into works, reuse leftovers and so on. That is precisely what people in this country did for many years.

Food prices have doubled in the last three years and people in developing countries are spending between 50% and 80% of their incomes on food, thus bearing the brunt of the food crisis. Poor harvests in large food-producing countries such as Australia, probably as a result of climate change, have impacted food supplies. Increased oil prices mean it is now more expensive to produce and transport food. However, demand for food has increased owing to better diets in countries such as China and India, with the resulting increase in food prices drawing speculators to those areas. We must be very mindful of the dangers in this regard. Those speculators are not getting involved for the good of any nation's health but rather for the good of their pocket.

This is a controversial and complex issue and no panacea is likely to emerge from this debate in respect of bio-fuels and other issues affecting developing countries. Governments must take urgent action in this regard and we have an important role to play in that context. Bio-fuels are supposed to tackle climate change but recent evidence suggests they can exacerbate it and can be an excuse in some respects for inaction on reducing carbon emissions. The European Union has set a target that requires 10% of all transport fuels to be produced from bio-fuels by 2010, which is laudable, but when one teases out the issues, that is not as straightforward as it seems.

According to the Oxfam report, the chairperson of the UN permanent forum on indigenous issues recently warned that 60 million people worldwide could face displacement from their land to make way for bio-fuel plantation, which is worrying. Reports are emanating from Tanzania that vulnerable groups are being forced aside to make way for bio-fuel plantations. Mtamba is one of 11 villages that skirts 9,000 hectares on which Sun Bio-fuels Tanzania Limited, a subsidiary of Sun Bio-fuels, a British company, is finalising an investment deal which will result in the company setting up operations there. The 11,000 people living in the area use the land to make charcoal, which is a major source of income, to collect firewood and to collect herbs for food and medicine. Most significantly, the land allocated for bio-fuel production includes a swamp, which is the only source of water for the villagers. It is not clear what will happen to them and their water supply.

Given the commercial interest in this land, will the business people be exercised by the water needs of the villagers or the commercial need to get the plant up and running? We must be clear about this. Rich countries must revise their policies now. Ireland's bio-fuels policy must take cognisance of the origins of this issue. Evidence of the damage it is causing is overwhelming and we need to be mindful of this. Even in poor countries where bio-fuels may offer a new commodity and increased employment, the potential costs, including environmental damage, land displacement and diminished food and water supplies are severe and we should proceed with caution.

I refer to our overseas development aid, ODA, budget. If we get our strategy right and allow countries to develop economically, socially and environmentally, many of them will become self-sufficient and will deal with these issues themselves. I do not teach the Minister to suck eggs but one of the main priorities of the Irish Aid programme is the reduction of poverty, inequality and exclusion in development countries. Members have raised many issues in the context of budgetary cutbacks and the McCarthy report. The NIMBY syndrome is at play in this regard, as none of us wants cutbacks in our area.

Many fine contributions were made in the Dáil last night as Opposition parties set out their stall but last week I honed in on the Social Justice Ireland pre-budget submission. It referred to the McCarthy report recommendation to abolish Bord Iascaigh Mhara, BIM. My constituency depends wholly on marine activity and coastal communities need the industry to survive. Families are the target of the services provided by Social Justice Ireland, a fine organisation led by Fr. Seán Healy and his colleagues who are committed to social justice. They referred to the amount that would be saved by abolishing BIM. However, the agency itself has identified savings in the context of budgetary cutbacks and we could cut off our nose to spite our face in this regard. BIM is one of the few successes in the decentralisation programme and the full import of that statement will be borne out at the beginning of 2010. If this brand is abolished, it will affect our seafood brand and our export markets. The people who depend on the fishing industry live on middle and low incomes in coastal communities and they will suffer.

The reduction in ODA, according to the Minister for Foreign Affairs, will be difficult but it will be most difficult for those in developing countries. The UN Millennium Development Goals require the international community to eradicate extreme poverty and hunger, promote gender equality and empower women, reduce child mortality and ensure environmental stability among other equally important issues. Since its inception in 1974 the Irish Aid programme has had a strong focus on sub-Saharan Africa. Approximately 80% of our ODA budget goes to Africa. Under the bilateral part of its programme, Irish Aid operates intensive and wide-ranging country programmes in six countries in this region, namely, Lesotho, Mozambique, Tanzania, Ethiopia, Zambia and Uganda. Malawi will become Ireland's seventh programme country in Africa. Tunnel vision can come into play where bio-fuels are concerned.

We must be cognisant of developing countries in the bio-fuels debate. I refer again to the villages with 11,000 people who depend on water from a swamp for their needs. We must be mindful of this.

I welcome the Minister of State to the House. I also welcome the debate but the importance of bio-fuels could be overstated. They are important to the farming community which has the opportunity to develop a bio-fuels programme for the country but I would like the sector to focus on home heating, blending and agriculture. These three sectors have a huge future but as a long-term proposal, bio-fuels rate very low on the list in terms of what can be achieved.

Senator O'Toole referred to the importance of us getting on with bigger programmes to find alternative energy sources. The Spirit of Ireland project is an example. He stated it is only 70% efficient but it is much more than that. It is 85% efficient because the Senator has not taken the evaluations into account. Wind blows periodically and it can only be harnessed when it blows. Wind energy production has been shown to be 85% efficient and it also generates employment.

Farmers have a great opportunity with bio-fuels. As Senator O'Reilly said, approximately 100,000 hectares could be developed in the State without affecting food production. A conservative approach to bio-fuels should be taken because Ireland produces high quality food and the agriculture sector is important, given the number of people employed. Therefore, it should be supported.

I would like beet production to resume in this country. That crop brought wealth to the country and farmers benefited hugely from it. Ethanol can be made from beet but it can also be used to produce pulp for animal feed. The two sugar refineries in Carlow and Mallow are lying idle and could be used for this industry. I would like to see development in this regard.

Pressing plants for rape seed oil could formulate a business. We should also develop our willow crops. Buffalo grass needs only be sown once and, like hay, grows repeatedly. It can be manufactured into a bio-fuel. Many excellent projects could be developed in the bio-fuel area. One such is micro-wind energy. A farmer's two biggest costs are electricity and diesel. Bio-fuels could be used to produce energy on farms. Micro-wind energy could be used to generate electricity, especially for dairy farmers. Our small rivers are not used to their full extent. Small hydro systems could be installed on small rivers. They would be hugely beneficial to farmers.

Heavy frost can cause bio-fuel to freeze. This is an important factor which must be taken into consideration. The blending sector will increase miles per gallon output by at least 5% and reduce CO2 emissions by up to three tonnes, which is very important. It will also help us to meet our Kyoto commitments and avoid carbon taxes.

Bio-fuels have a place in the economy. They play a small but essential part in the bigger picture. Progress must come from people such as those involved in the Spirit of Ireland. They have made proposals, are in the process of completing their business plan and have identified two suitable sites in the west. It would be a wonderful boost for the country to be able to produce our own energy from a natural resource.

I welcome the Minister of State to the House. I am glad to have the opportunity to contribute to this debate. People are becoming more and more aware of the exciting new potential of alternatives to fossil fuels. It is not long since none of us was aware of concepts such as biomass, bio-fuels, sustainability and renewability in the context of energy production.

Many lament the problem of individualism which besets our society, despite the disappearance of the Celtic tiger which, in part, gave rise to it. It is worrying that individualism continues in times of crisis when people become more fearful of their own economic security. We must all pay attention to the need for a united approach to the problems which face us in our economic travails. We must promote solidarity between people. It is all too easy in times of fear to retreat into our own houses and seek to protect our own sectoral interests. The only way to deal with the greater problems which beset humanity is to try to get human beings to unite, find common cause and make sacrifices for each other.

It is in the area of environmental protection, energy security and developing clean, green forms of energy that one finds people uniting quite visibly. In this area, we have a heightened consciousness of our obligations to each other, not only to the people who share the world with us now but also to future generations. Intergenerational solidarity is growing in purchase.

I welcome the Government's initiative to introduce a bio-fuel obligation scheme in July 2010. I note what the Government said about the reduction of emissions and the increased security of supply, employment opportunities and economic well-being it entails.

We are all familiar with the maxim that sometimes the perfect can be the enemy of the good. I wonder if this is an occasion when the good might be the enemy of the perfect. I think of bio-fuel as something that is better than fossil fuels, can generate employment and improve economic activity, is less harmful to the environment than fossil fuels and, therefore, has a lot going for it. It is exciting to think of cars which are environmentally friendly, whether those fuelled by hydrogen or something like the Toyota Prius, whose combination of battery and fuel leads to lower emissions and higher mileage per litre. We have a romantic image of filling our bio-fuel based cars with vegetable oil from the chipper, although I know we are talking this evening about something more industrially developed.

It is apparent to many people that many questions remain to be answered in this area. These questions have been well ventilated by others. I heard with interest the concerns raised by Senator McCarthy. For example, I am very conscious of the recommendations of the hunger task force. The Minister of State, Deputy Conor Lenihan, will have a particular interest in this given a portfolio he once held with distinction. I am very conscious of the work of the hunger task force and of Ireland's particular obligation to address issues around hunger.

When one thinks of what non-governmental organisations such as Self Help have to say, they point out very clearly that we must support the farmers of the world. I am thinking in particular of farmers in Africa. There was a time when we had massive amounts of excess food and so on and food could be transferred to other continents but that is not the current reality where there is higher consumption of food worldwide in places like China and so on.

The devotion of arable land to the production of biomass raises questions about biodiversity and about farming in poorer countries. It is a known fact that in Africa, for example, the majority of the population live very close to the land. There is huge potential for progress in helping people farm more effectively, more sustainably and more productively and thereby tackle hunger and build a better future.

We must have regard to concerns about whether an unrestricted biomass industry would take account of the small farmer, the ordinary people and the people without power and influence. This is a good which must be regulated and must not be subject to unrestricted market forces. It must be regulated in the interests of the most vulnerable people of ourworld.

While welcoming progress in terms of environmental protection which bio-fuel can entail and the economic activity it can entail, the focus for Ireland must be on completely renewable and completely clean energy. I commend Senator Butler, for example, on bringing in speakers from the Spirit of Ireland project. I want to hear the Government talk about that project and about how and when Ireland will be at the cutting edge of all that is possible in the area of completely green and completely renewable energy from wind, wave and water and the wind and water combination which is at the heart of the Spirit of Ireland proposal.

I intend to table an Adjournment Matter shortly in order that the Minister can explain the current position and the Government's attitude to Spirit of Ireland and all that needs to be done to develop our potential in an optimistic and engaged way in the area of production of clean, green energy through wind and water. Are we serious about it? Will we take risks to achieve our potential and become net exporters of energy in the very near future, which is achievable? Will our Government invest the time and the resources and, crucially, have the imagination to make all that happen?

Gabhaim buíochas leis an Leas-Chathaoirleach as ucht an deis seo a thabairt dom. Glacaim leis an méid atá déanta ach ba bhreá liom an cheist seo a chur ar an Aire — cá seasann an Rialtas maidir le Spirit of Ireland, maidir leis na hacmhainní sin agus maidir leis an potential atá leis an ghné sin den díospóireacht faoi chúrsaí fuinnimh?

I wish to share time with Senator Leyden.

I am glad to have the opportunity to speak on this issue. If one stays long enough in politics, first, one might live long enough to see one's dreams come true and, second, one might live to see that what one may have wished for is not necessarily the most beneficial thing. In 2004, I tabled an Adjournment matter because I had been alerted to the whole bio-fuels issue which was in its early days. I said the potential was enormous and I requested that the Minister bring forward a measure in regard to bio-fuels. We are a little further on and a measure will be enacted.

As Senators Mullen and McCarthy said, the first types of bio-fuels at which we looked are not necessarily very sustainable, both in Ireland and internationally. We have moved on to the second phase of bio-fuels. There is scope there but we need to do things differently. That is what I meant when I said that one should be cautious about what one dreams for. What may have appeared a fantastic idea might not necessarily play out as one, and this has come to pass.

I am excited by this new type of fuel, dimethyl ether, DME. This will be the new bio-fuel and in what Ireland needs to invest. I encourage Members to look at the website This is the most extraordinary fuel. It is clean and is a type of gas which can be used in housing and vehicles. It is quite extraordinary and is very much at the cutting edge. The added potential for our country is that wind generation can be used to get more out ofit.

I speak very vaguely because it is literally at the cutting edge of science. China and Korea, in particular, are leading the way in this regard. If one looks at this website, one will see where it is at. This is where it is at for Ireland. The Minister may not be fully aware of the potential in Ireland for DME and how to exploit it. That is why I welcome this initiative. While we are all still in the mindset of bio-fuels and of sticking the pump into the nozzle in the car in the same old way, Members should look at this website. They will be blown away by what can be done. It is fuel from air. This is where we can really lead the way. A very select group of academics are looking at it. The cutting edge is in the east, in Indonesia and such places, and that is why Ireland needs to recognise the potential. Much more can be got out of it through wind energy.

I have concentrated on DME but I welcome this initiative and the fact we are finally bringing more conventional bio-fuels to bear in the country. I hope it brings opportunities for our agriculture sector. Farmers are entrepreneurs but they need to know there is a secure market. This can be demonstrated by this initiative.

I very much welcome it in so far as it goes but I urge the Minister to look at dimethyl ether, DME, because it is the way of the future. I hope Ireland is at the cutting edge of this. Some scientists here are looking into it and can see it has enormous potential. I hope the Government gets behind it. We debated the Foreshore and Dumping at Sea (Amendment) Bill earlier. There are a million ways in which the Government can kick-start initiatives and this is one of them.

If I have done nothing else, I hope I have alerted Members to DME and the website. I look forward to speaking to Members about it again because they will be very surprised at what Ireland could do.

I welcome the Minister of State with responsibility for science and technology, Deputy Conor Lenihan, to the House and commend him on his work in this area. He is the right man in the right place at the right time.

I commend Senator O'Malley on her wonderful green speech. She is more green than the Green Party Members, which is a wonderful tribute to her. I was very impressed by her contribution.

This motion welcomes the Government initiative to introduce a bio-fuel obligation scheme in July 2010. I have a few questions which the Minister of State may or may not be able to answer. The Minister, Deputy Ryan, referred to electric vehicles, the development of which is an important initiative being undertaken by the ESB. In regard to the harnessing of hydrogen, the Minister has taken an interest in a project presented to him by an individual during the Fianna Fáil think-in at the Hodson Bay Hotel in September. The Minister has been extremely helpful to this man in working out his proposal. The Minister has a very open mind on these issues. The potential of hydrogen is unlimited if it can be harnessed. I have an open mind on this and I have been encouraging the young man involved. He had entered into detailed studies and research with some eminent people in this field. It is a very exciting area of alternative fuels.

In regard to bio-fuel production, I note that the Minister made the point that he would rule out using bio-fuel produced on land of biodiversity value, including primary forests, highly biodiverse grasslands and wetlands. Additionally, there is a substantial reporting requirement on the European Commission in terms of the effects bio-fuel production is having on social conditions and employment terms. That is an important consideration.

I do not see any advisers present which means the Minister of State may not be able to answer all my questions. Will a separate pump be required in forecourts to provide the bio-fuel or will the fuel be mixed separately before it is delivered to the forecourt and then used in regard to diesel and petrol? Will there be a blending of the bio-fuel with diesel and thepetrol?

Therefore, additional pumps will not be required in forecourts and diesel and petrol will contain 10% of bio-fuel. I presume that is the plan. Otherwise, it would be complicated to provide additional pumps on small forecourt areas which would involve additional costs and planning. This is an ambitious plan.

I commend the motion to the House. I thank the Minister of State present and the Minister, Deputy Ryan, who was here earlier, for coming to the House. The points made by Senator O'Malley are worth pursing. We should check the website to which she referred and I thank her for bringing it to our attention.

I commend the Minister of State on his work on the development of hydrogen fuel cells. He is most innovative. I served in the Department he is in, although not in the science and technology side. He has some great ideas. I hope he will come to the House in the near future and outline some of his ideas and the work he is doing on the development of alternativeenergy.

Amendment put.
The Seanad divided: Tá, 16; Níl, 28.

  • Bradford, Paul.
  • Burke, Paddy.
  • Buttimer, Jerry.
  • Cannon, Ciaran.
  • Coffey, Paudie.
  • Coghlan, Paul.
  • Cummins, Maurice.
  • Donohoe, Paschal.
  • Fitzgerald, Frances.
  • Healy Eames, Fidelma.
  • Mullen, Rónán.
  • Norris, David.
  • O’Reilly, Joe.
  • O’Toole, Joe.
  • Regan, Eugene.
  • Twomey, Liam.


  • Boyle, Dan.
  • Brady, Martin.
  • Butler, Larry.
  • Callely, Ivor.
  • Carty, John.
  • Cassidy, Donie.
  • Corrigan, Maria.
  • Daly, Mark.
  • Doherty, Pearse.
  • Ellis, John.
  • Feeney, Geraldine.
  • Glynn, Camillus.
  • Hanafin, John.
  • Keaveney, Cecilia.
  • Leyden, Terry.
  • MacSharry, Marc.
  • McDonald, Lisa.
  • Ó Domhnaill, Brian.
  • Ó Murchú, Labhrás.
  • O’Brien, Francis.
  • O’Donovan, Denis.
  • O’Malley, Fiona.
  • O’Sullivan, Ned.
  • Ormonde, Ann.
  • Phelan, Kieran.
  • Walsh, Jim.
  • White, Mary M.
  • Wilson, Diarmuid.
Tellers: Tá, Senators Maurice Cummins and Joe O’Reilly; Níl, Senators Camillus Glynn and Diarmuid Wilson.
Amendment declared lost.
Motion put and declared carried.