Amendment No. 1 is a Government amendment. As Government amendments Nos. 1 and 2 are consequential, they may be discussed together, by agreement. Is that agreed? Agreed.
Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010: Committee Stage.
SECTION 1.
Government amendment No. 1:
In page 5, subsection (2), line 34, to delete "the Minister" and substitute the following:
"the Minister for Communications, Energy and Natural Resources".
This amendment is being inserted to clarify that it is the Minister for Communications, Energy and Natural Resources who will make any necessary orders. It does not affect the policy. The definition of "Minister" is being deleted in section 2, as it has now been included in section 1. The definition of "Principal Act" is clarified further and does not affect the policy. I propose that the amendments be accepted.
Amendment agreed to.
Section 1, as amended, agreed to.
NEW SECTION.
Government amendment No. 2:
In page 6, before section 2, to insert the following new section:
"2.—In this Act "Principal Act" means the National Oil Reserves Agency Act 2007.".
Amendment agreed to.
Section 2 agreed to.
SECTION 3.
Amendments Nos. 3, 4, 6 to 8, inclusive, 12, 13, 28 and 32 are related and may be discussed together, by agreement. Is that agreed? Agreed.
I move amendment No. 3:
In page 6, between lines 15 and 16, to insert the following:
"‘bioethanol' shall only be deemed to constitute a biofuel in the case of ethyl alcohol ex CN (Combined nomenclature) sub-heading Taric code 2207 1000 with an alcohol content of at least 99 per cent volume the properties of which comply at least the requirements set in document EN 15376:2007 or any subsequent revisions to this document by the EU Committee for Standardisation CEN;".
This is a series of related amendments which go right to the heart of the matter on which I have been lobbied effectively by a commercial company. I think the Minister of State will agree that in the current economic circumstances it is important that we foster and encourage potential indigenous industrial development. What we are looking for is a level playing field. It is similar to the position on Brazilian beef. I happen to love Brazil. Its people are very charming. It is a very beautiful place and I have been there on a number of occasions. Therefore, I am not anti-Brazilian, but we need a level playing field for those involved in our own industry. We have seen the agitation of farmers on the rules pertaining to beef production. We face a similar situation where the possible development of an indigenous industry may be stymied by the absence from the Bill of certain measures concerning tariffs which would bring us into line with at least eight other European countries which have introduced similar legislation. They have provided for such tariffs to create a level playing field.
Some of the language used is unattractive — natured and undenatured. "Undenatured" is one of the most ugly words I have ever come across, but, regrettably, it appears to be necessary to describe some of the technical processes involved. Undenatured or naturally produced bioethanol is the equivalent of a kind of poteen; additives are included to dilute it and so on. It is also sometimes needed for certain chemical processes and so forth. However, the transport of undenatured ethanol is a standard international practice. There is nothing against it; it is not dangerous. Therefore, there is no technical argument against it. To secure the type of investment required, which is very significant, it is essential that our domestic legislation mirrors the European legislation of which I have spoken. Sweden applies these tariffs to Brazilian ethanol, as do Belgium, Slovakia, Poland, Hungary, Austria and Spain. I urge the Minister to accept this amendment and to get involved in direct discussions with the agencies that wish to introduce this type of manufacturing into this country.
The impact of this would be to secure jobs and to provide for the security of our bio-fuel requirements within the European Union. At present, we use some of the major oil companies, which bring it in from various countries around the world. That does not confer any real benefit on the Irish industrial community. There would also be the development of plant infrastructure, and 4% of our fossil fuel requirements would be replaced by this indigenously produced material, which is very environmentally friendly. A total of 100,000 tonnes of fuel would be produced as well as 110,000 tonnes of the basic materials for animal feed. In that regard we currently import soya from various countries, including Brazil. It will also produce 60,000 tonnes of CO2 gas, which we must import at present through the British Oxygen Company. The proposed plant would be located in Waterford and would be a major industrial development for the area. It would help to alleviate the economic distress being experienced in Waterford, particularly in the aftermath of the closure of companies such as Waterford Glass. That must be a major argument for the Government.
What is being proposed is the adoption of the quality standard technically known as EN15376 which is also applied to externally sourced ethanol outside the European Union. The standard represents 99% volume purity, anhydrous — without water — and is the recommended standard used by the majority of EU member states to prevent tariff engineering of undenatured ethanol outside the EU or in bonded warehouses. The difference in both standards, in the main, is the water content of approximately 3%. The Brazilians would prefer to denature their own ethanol outside EU borders or within bonded warehouses inside the EU. This essentially means a lower bioethanol production cost per litre while obtaining maximum price within the EU. In other words, it is a tax dodge. This benefits the Brazilian domestic industry, without having to maintain EU standards of production.
We are talking about an improved security of supply and the development, construction and operation of a €100 million bioethanol facility. This is in addition to the indirect support of approximately 1,000 jobs in the Waterford area, which is an economic blackspot. It would also create new opportunities for the agriculture sector after the ending of the production of sugar beet. There is a serious problem in agriculture with the decline in sheep and cattle prices. This development would have the spin-off effect of producing feed. There would be a significant tax contribution through PAYE, corporation tax, rates and VAT to the Exchequer while there would be import substitution of 110,000 tonnes of soya animal feed through the utilisation of the distillers dried grains with solubles, DDGS, by-product, a product which is highly sustainable both in terms of environmental performance and greenhouse gas emissions savings. Furthermore, there is a knock-on effect in Brazil. Ireland, of course, will be a small player in this and Brazil is an enormous country. However, everybody is aware of the appalling impact on the rainforest. Millions of acres are destroyed partly for the production of soya. The production of bioethanol in Brazil is also having an impact. There are many environmental and commercial reasons for considering this proposal.
There appears to be a perception that there are technical problems relating to the importation of undenatured Brazilian ethanol for fuel use. It must be denatured before it can be transported. All Brazilian ethanol is produced and exported in an undenatured state. The denaturant is added within the EU borders, prior to the duty point, depending on the requirements of the individual end users and their national regulations. It is denatured as a result of European national customs requirements by adding a select number of additives listed in EN15376. Transport of denatured ethanol is rare and only happens if the end user requires it. Shipping undenatured ethanol has nothing to do with technical feasibility; it is a standard practice around the globe.
With regard to the water content in ethanol, EU oil and car companies do not want too much water in the ethanol. The Brazilians always complain about this and say that the standard is a non-tariff barrier. However, there has been an international inquiry into this issue and a tripartite committee was established, comprising membership from the United States, Brazil and the European Union. Last year, the official conclusions were reached and they were unanimous that the water content issue was not a barrier to trade. The Minister will be able to possess himself of this report.
There have been doubts about the economic viability of an Irish bio-fuel plant. There is the issue of economies of scale but this has been well researched and is supported by other major European, particularly German, chemical combines. The plant size suggested is optimised to match both Irish demand for fuel ethanol and the capacity to produce feedstuff. As an island, Ireland has a number of competitive advantages over other locations to make the plant viable. I accept that the economic viability of an Irish plant is an issue to concern the promoter. It is a market risk for the developer, but the developer will take this risk. I am asking that the Seanad create the market conditions through legislation that will enable these investors and potential Irish industrialists to develop it.
There are benefits with regard to carbon dioxide as well. We import all our carbon dioxide through the British Oxygen Company. I recall seeing its lorries travelling through Dublin transporting cylinders and my cousin was the company's chief engineer at one time. The fact that we import all this gas makes CO2 capture at the plant viable and will provide the company with an additional revenue stream. It currently costs €60 per tonne in transport charges alone to import this gas into Ireland so it will be a significant revenue stream. The CO2 capture also greatly enhances the environmental performance of the plant. One of the other by-products is distillers dried grains with solubles, DDGS. It is a valuable by-product and is a direct substitute for imported animal feed. Once again, it would mean the replacement of imported material with Irish-produced material.
I have absolutely no commercial interest in this proposal. I merely met the people concerned but I considered the proposal so valuable I put forward these amendments. Ireland's production costs per tonne are competitive within Europe. This is partly because we have the highest wheat yields in Europe due to the longer growing period. There are various other points concerning price and the impact at the fuel pumps which can be dealt with.
In terms of sustainability, the demand for land in Brazil, in particular, has been driven by the increased demand for soya, sugar cane and beef. It can be expected that an increased demand for bioethanol worldwide to fulfil bio-fuel obligations will automatically create further pressure to convert rainforest to agricultural land. Saying bioethanol is produced using sustainable methods does not guarantee that the rainforest will not be knocked indirectly by beef farms as a result of an increased demand for sugar cane. As I said, the scale of destruction is absolutely vast. Millions of acres have been destroyed. The demand for bioethanol will increase and the question is where should it be produced. I made the argument that it should be produced here to generate jobs and very valuable materials. If the Government decides not to apply the tariff which eight other European countries have successfully applied and in so doing so secured their indigenous industries, it may be unknowingly promoting the destruction of the rainforest by creating increased demand which would be contrary to its intentions. I ask the Minister of State to ensure a level playing field which would require no investment on the part of the Government. It would at least open up the possibility of securing the development of a significant industry in what is an economic black spot.
I ask that Seanad Éireann employ all of its forces in requesting the Minister of State to take this matter very seriously, on which I believe I will receive support from other sections of the House. There would be no cost to the Exchequer. The Government would simply need to create the market conditions, whereby we could develop a viable, indigenous industry and give employment to our own people during this critical and difficult period.
I welcome the Minister of State. It is the first time we have encountered each other in this role. We studied history together in UCD and I am delighted to meet him in this context.
I support the sentiments expressed by Senator Norris. As a lover of words, I flatter myself by thinking I am something of a wordsmith on occasion. I fully share the Senator's view that "undenatured" is not a very satisfactory word. It is not good English and we do not like the term. I also share his sentiments on showing no inherent antipathy towards Brazil or Brazilians. Unlike him, I have not had the opportunity to visit Brazil. I am not yet sufficiently resourced to make such a visit. I have such an affection for my constituency that I do not like to be away from it much. However, I may travel to Brazil in the future. I agree with the Senator; none of our amendments is predicated on an anti-Brazilian sentiment. In many respects, the contrary is the case, when we examine the food supply chain and the cutting down of the rainforest.
All of my amendments are included in this group and I propose, with the permission of the Leas-Chathaoirleach, to discuss each of them. However, I will take guidance from him on the matter.
Does the Senator propose to speak to all of his amendments in this group?
Yes. All of my amendments are predicated on issues I raised on Second Stage. The first was indigenous production of the raw materials required for the production of bio-fuels, the indigenous processing of bio-fuels and, on a national and international level, not allowing the production, use or introduction of quotas of bio-fuels to interfere in an adverse fashion with the food supply or put consumers in a position where they would pay inflated prices for food. These parameters dictate the amendments I have tabled.
Our first and most compelling obligation as legislators is to create conditions to rectify the unemployment crisis. Those of us who hold advice clinics or meet people on a regular basis are aware of the reality for the large number of young graduates who are unemployed and those who are dislocated from construction and traditional manufacturing industry. Some 13 people out of every 100 or in excess of 437,000 are unemployed. That should be the backdrop against which we approach any legislative package of this nature.
Coupled with this is a crisis in farm incomes. In 2009 the average farm income was approximately €13,000, a bleak figure. There is a crisis in commodity prices for farmers, despite the fact that at farm gate level they only receive a percentage of the ultimate price paid by the consumer. Recent figures support the notion that the numbers employed in Irish agriculture are declining rapidly. It is against that backdrop that we have to examine the Bill and the amendments tabled.
Amendment No. 4 examines the fact that 99% v/v purity is the recommended standard and used in a majority of European Union member states to prevent tariff engineering of undenatured ethanol outside the European Union or in bonded warehouses within it. Countries such as Brazil produce ethanol to a standard of 96% v/v, which poses a threat to our domestic production of the raw materials or the indigenous processing industry. A requirement to meet a figure of 99% v/v would make it difficult for substandard, cheap products to be imported. Accepting the amendment would lead to the creation of the level playing pitch required. Brazil would prefer to manufacture outside the borders of the European Union to a lower standard or in bonded warehouses within the Union. This is something we have to prevent.
The adoption of the code is important because it levels the playing pitch, from a cost and competitiveness perspective, for ethanol produced in the European Union. The majority of European Union member states, including Sweden, Belgium, Slovakia, Hungary, Spain and Austria, have adopted the code, as Senator Norris pointed out. I understand from lobbyists and independent research that the cost implications in adopting this measure are insignificant. Senator Phelan has spoken to me about the issue on a number of occasion and will support the amendment.
Our other amendments would deal more fully with the fact that there is a proposal for the development of a 100,000 tonne bioethanol processing facility in Belview Port, County Kilkenny, which has the potential to create a large number of jobs that are very badly needed in the region. Senator Phelan will elaborate further on that. It is very important we support indigenous attempts at processing and job creation and our legislation should be predicated in that way.
Regarding the CEN standard, part of our country is signed up to European standardisation. The CEN standard for Europe dictates that we adopt this amendment. It is proposed that the adoption of the quality standard is applied also to ethanol sourced outside the European Union, which is the fundamental point of this amendment. I ask for support for it on that basis. It is a way of protecting indigenous industry and producers.
Our second amendment proposes that the capacity of domestic producers to supply bio-fuel to meet market demand be part of the criteria used by the Minister as he reviews the bio-fuel content and levels of bio-fuel production and use in our transport system, as proposed in section 3. It is important that we give specific protection to domestic production and the need for same. I made the point on Second Stage that recent Teagasc reports established that 100,000 hectares of Irish land are suitable for the production of the primary raw materials for indigenous bio-fuel processing and production. We have 100,000 acres that can produce the necessary materials without threatening food production in the country. It is important that we do this from the point of view of job creation, to assist farm incomes that have gone through the floor and for reasons of security of energy supply and sustainability. For every good objective reason we should protect our domestic industry and my party's second amendment is relevant to achieving that objective.
Amendment No.12 states:
In page 10, between lines 9 and 10, to insert the following:
"(b) the capacity of domestic producers to supply biofuel to meet market demand”.
That should be a criterion and should be part of our statement within the legislation. It should form part of the ministerial review of the progress of the legislation on an ongoing basis. It is vital that we defend and support domestic production. It is worthy of note that 70% of bio-fuels supplied in Ireland to date have been imported. That is not acceptable. We need to move from imported to domestically produced bio-fuels.
It is also worthy of note that implicit in this legislation is a 1 cent per litre increase in the price of transport fuel. If that were to be the case it would be a tax on work in many rural communities and a disincentive to employment. It would contribute in its own small way to general inflation in our economy and to our lack of cost competitiveness. If that were to be the scenario for the best of reasons, such as to cope with the finite supply of fossil fuels and because of our commitment to reducing carbon emissions, then at minimum we should support the domestic indigenous production of both raw materials and processing at local level. It is not good enough to commit ourselves to an increase in the price of fuel if at the same time we do not actively and aggressively support domestic production. At least we would offset the disadvantages to our economy by encouraging job creation within the country and supplementing farm incomes. That is why this amendment should be accepted by the Minister. It is critical. The protection of domestic production should not be a matter upon which the House should divide.
Amendment No. 13 has a similar objective, again concerning the protection of domestic production and the insertion of that protection into the legislation. It notes "the various customs and tariff policies and other national policies across the European Union, in place to promote domestic production of biofuels to meet market demand" which place an obligation on native governments to support domestic production and processing and job creation at local level.
We are very happy to support the climate change strategy which involves the reduction of carbon emissions. We have no difficulty with that. Regarding imported bio-fuels it is also worth noting that the process of importation and bringing them into the country by shipping in itself creates carbon emissions. If one imports bio-fuels one defeats the objective of reducing carbon emissions because in the importation process one contributes to carbon emissions. That is self-defeating and is worthy of note as such.
Concerning the context of our support for the legislation on the grounds of the reduction of carbon emissions it is equally necessary, in the same context, to support domestic production. That is how we will reduce transport costs and emissions which will be critical to the success of the legislation. That is the first issue. Second, it is important that we do not contribute to a reduction of food supply and an inflation in food prices or, indeed, to the cutting down of the rain forest. Imposing the 99% requirement of the standardisation imposition in this country will help because cheaper imports will not be allowed to displace what should be domestic production. The argument in regard to unemployment and farm incomes, on a national level, should compel support for these amendments which can all be reasonably accepted.
I urge the Minister of State not to make it necessary to put these amendments to a vote. They will enhance the legislation rather than otherwise and on that basis they should be supported. It is not in the best interests of people outside this House such as the 437,000 unemployed people across the country, the farmers who have low incomes and those people in counties Carlow, Kilkenny and Waterford who are waiting for the facility to go into production. They are depending on us to accept reasonable amendments and to make the legislation foolproof in terms of domestic job production, farm incomes and the best climate change strategy due to the cost of the importation of bio-fuels. Realistically, and we have no illusions to the contrary, even with our amendments and with our Second Stage presentation suggesting caution on progression without domestic production, it will take time to reduce imports. However, we must begin the process immediately.
We are very concerned we would put the cart before the horse by adopting legislation and not organising our indigenous production. As I said on Second Stage, I am very concerned that the existing incentives for our farmers to produce the raw materials for bio-fuels are not sufficient at present and work needs to be done in this regard. I put this issue to the Minister of State and look forward to a response. While there have been tax breaks and so on, we also need stronger incentives for the bio-fuels processing plants. At a minimum by way of incentives for those plants, we need to adopt the standardisation that is implicit in these amendments. These are vital requirements in the legislation and I am concerned we would allow the Bill to go through without enshrining within it the necessary adjustments to ensure this.
My criticism of the legislation, as I outlined on Second Stage, is that it does not set out sufficiently clearly to protect native jobs, native production and support for our farmers, nor does it set out sufficient parameters within it to eliminate the reduction of food supply or the cutting down of rainforests. I realise there are European norms to which we are signed up but this should be more implicit in our legislation.
The three amendments we propose are reasonable and I look forward to an initial reply, and, I hope, acceptance. I will come back to them if necessary.
I welcome the Minister of State, Deputy Conor Lenihan. He has been here frequently and this Bill is on a particularly important topic.
I concur with much of the argument put forward by Senators Norris and O'Reilly with regard to the need for redefinition to change the thrust and, in particular, to promote the development of indigenous industry in this area. We are using approximately 6 billion litres of hydrocarbon fuels per annum and we have declared we will move to a 4% bio-fuel obligation, which is somewhere in the region of 220 million to 240 million litres per annum. At present, we are at not much more than 20% production of that target and, therefore, there is considerable scope to expand.
I live almost as close as Senator John Paul Phelan to Belview Port and I am familiar with the proposals for it. However, it is not just a matter of that location as we probably need to do more in this regard. The Senators who spoke identified precisely what needs to be done, namely, to ensure the bioethanol should only be deemed to constitute a bio-fuel in the case of ethyl alcohol with an alcohol content of at least 99% volume, which is was what was put forward in the proposed amendment. It is also relevant that this applies in many other EU states at present.
If we fail to do this, we will continue to import from countries a long distance away, such as Brazil. A number of issues arise in this regard. We fully subscribed to the climate change agenda in the interest of the global environment as well as the global economy. Therefore, if we subscribe to that, we must adhere to good practice to ensure it happens. If we examine the import of any products from such a distance as Brazil, a considerable amount of CO2 is involved in the transportation. However, because it is Brazil, there are other concerns with regard to climate change in that area. As Senator Norris said, the increase we are imposing on the use of the arable land in Brazil for the growth of crops is actually pushing the beef industry further west and into the Amazon, with the deforestation and adverse affects that come from that.
One of the compelling arguments in this regard at any time but particularly in the current economic downturn, with the huge increase in unemployment, is that we would promote indigenous industry. Most economists now accept that while we will still require foreign direct investment, it is the growth of indigenous industry that will be the key to overcoming our economic difficulties and reducing unemployment levels to more acceptable and sustainable levels in the future. Not alone are we talking about the jobs in the production industries involved, but the ancillary services that go with that, not to mention the growth of the crops which will help an agriculture industry which is going through very severe difficulties at present. I would certainly ask the Minister to consider these amendments favourably with a view to bringing them back on Report Stage, if possible. We need to be positive in the way we construct our legislation so the climate for economic development and job creation is based on a strong foundation.
The other point, which has not been raised as yet and which has been put to me by people involved in the recovery of hydrocarbon resources and their use, is that there should be potential within that area for them to play their part in meeting this 4% obligation with regard to bio-fuels. I am unsure whether the reuse and recycling of this fits the biodegradable definition but the argument on reuse and recycling is one we subscribe to as a country and one in which the State, through its agencies, especially local authorities, has invested a lot of money. If it can be fitted into the definitions, it is something I would put forward for consideration.
I will not repeat the points made by other speakers. I agree with the sentiments expressed by Senators Norris and O'Reilly and the strong case they have argued. I received the correspondence. Senator Norris tabled those amendments and I support the points expressed by previous speakers.
I welcome the Minister of State. I am very disappointed with the attendance in the House today. This is a classic example of something that is really central to our debates on job creation, on the economy, on climate change and on energy security. I do not wish to make a personal criticism of anyone but there is a lack of understanding. It might be preferable to adjourn the debate and ask Members to study this legislation——
I can guarantee it will not be reported.
——as it is crucial. This happens on a regular basis. Every agriculture, energy and climate change spokespersons should be in attendance for this debate. I will not rehearse Senator Norris's points but they reflect my point of view and that of all the speakers so far, including on the Government side.
This is crucial legislation and these proposals have the support of the whole agricultural community, the IFA and local communities everywhere and also the support of Irish industry. I can assure the Minister of State they have the support of the Irish Congress of Trade Unions. This is social partnership, a proposal from civic society coming before the Minister of State.
The Minister of State may decide he will not accept these amendments and nobody will be the wiser because, as Senator Norris said, it will not be given a column inch. This is a technical issue and nobody will even include the reference in the amendment. We are appealing to the Minister of State to look at this proposal in an open way. I will remonstrate gently with my colleague and friend, Senator Joe O'Reilly, as I do not want to misunderstand a point he made. He made the point about the issue of attracting farmers into this area but that is not the issue we are discussing. I want that issue kept separate. We are not talking about incentivisation but rather about a level playing pitch. We want the Irish farmer to have a level playing pitch with the Brazilian producer. It took five years to convince the authorities on the question of beef and meat imports from Brazil and let us not go down the same road again.
We are dealing with very technical issues and we are dependent on the Minister of State to cut through the technicalities and accept that good points have been made by speakers and that some of them may be conceded.
I agree those are good points.
This is too important. I am sure none of my colleagues would mind coming back to tease this out further. If there are flaws in our argument as articulated by Senator Norris, the Minister of State should deal with them one by one. I know the Minister of State has heard arguments from an other side and they need to be examined. Apart from the obvious advantages, the Irish plant in Waterford or Kilkenny——
In Belview.
Technically it is in Kilkenny.
It is nearly in Wexford.
It is down there. Apart from the main argument, the other argument which needs to be examined includes carbon dioxide capture. Methane is 25 times stronger and more damaging than carbon dioxide. This plant can capture the carbon dioxide and it can be reused. We will save ourselves emissions costs and save ourselves paying for some of the carbon emissions trading units which the Government has had to include in the last two budgets. The plant also produces a product for livestock which has a ready market in farms all over Ireland.
The other counter-argument is to do with the price of wheat and this argument does not stand up to serious examination. As it stands, wheat prices would have to become 30%, 40% or 50% more expensive in order to make it unviable for this plant in Belview to deal with Irish-produced wheat.
Ireland grows winter wheat which is not common in most other European countries. It grows longer and has a higher level of yield. These are issues which I ask the Minister of State to consider so he can make our arguments to people who suggest a different argument to him. It is completely in line with Government policy and ticks the box in terms of energy security, job creation and an immediate improvement in the construction sector. Crucially, it will also mean that tax will be paid in Ireland.
Hear, hear.
It will mean increased tax revenue. We should invite the officials from the Department of Finance to come to the House to applaud us for making this case so they will be on our side and understand our proposal. This is also a question of sustainable rural development. If there is any downside to our proposal in terms of Government policy, I cannot find it. I acted as the Devil's advocate and went through the proposal with a fine-tooth comb and I cannot find the oppositional position on which, if the Minister of State and I were discussing it over a cup of coffee or a pint, would disagree. Senator O'Reilly made an important point. It would be really damaging for the House to divide on these issues.
Hear, hear.
It would be a disgrace and we would be a laughing stock. If aspects of our amendments need to changed, then they can be changed and if a similar amendment with a slightly different emphasis needed to be tabled, then the Government side should do that. However, the Minister of State should recognise that the amendment is a serious attempt to improve and extend the legislation. I can guarantee that by taking these amendments on board, the legislation will leave this House in a far enhanced, more acceptable and more deliverable condition. We need to look at the arguments being put forward by Brazil in terms of the changes it wants to make and this was dealt with by Senator Norris. The Brazilian argument is based on one single proposal, that they have to pay less taxation in Europe. This is their only argument. An old friend of mine used to say that when he hears people talking about principles, he often feels for his wallet. Any principle that can be reduced to a quantum of money is one that needs to be taken less seriously than others. This is about money. We make no bones about the fact we are talking about money and finance and investment in the Irish economy along with long-term sustainable job creation. I do not want to hear some of the other stuff.
The best name for "denatured" is poitín.
I said that.
Those of us in the west of Ireland grew up in that environment.
In the south.
And in the west, the Leas-Chathaoirleach's own county would be well attuned. One of the requirements is that it would not be saleable as raw alcohol. I refer to head shops with denatured methanol or ethanol. This is the reason petrol or some other additive is added in order to ensure it is not potable. These are the issues to be considered. I do not wish to repeat the points made by Senators Norris and O'Reilly and by speakers on the Government side. I do not think I am misrepresenting the Government benches by saying that. I appreciate the points that have been made by Senator Walsh. It is important for the Minister of State to bear in mind that arguments can be made and legislation can be changed in the Seanad. This House is the most appropriate forum for an inherent examination of the issues in a way that is not necessarily based on party policy positions. The Members of this House put their shoulder to the wheel and move things on together in the interests of the country as a whole.
This proposal would help to tick the security of supply box and to provide the construction jobs I mentioned. It would support our agricultural sector, which could do with all sorts of help at the moment. It would increase tax revenue. More importantly, it is an environmentally friendly and sustainable industry. It would help to meet all the demands being made at domestic and EU levels.
I could speak about this issue for another hour, but all I would be doing is rehearsing or developing the points. I assume the Minister of State understands these issues. I am sure he accepts that Senators on all sides of the House have a sense of enthusiasm and commitment in this regard. It would be very demoralising if the Minister of State were to puncture the great enthusiasm and optimism we have showered on him for the past hour.
I will try not to repeat everything that has been said. I want to reiterate a few points. I welcome the Minister of State.
The Senator can tell us about poitín production in County Kilkenny.
We do not do poitín in Kilkenny at all.
What about in Tullogher?
We are hoping to develop a 99% proof ethanol plant at Belview Port, the Port of Waterford, which is firmly located a number of miles into County Kilkenny. The port in question is just a few miles from where I live. It is also close to New Ross, where Senator Walsh lives.
There is poitín in Tullogher.
I will bow to the Senator's superior knowledge on that issue.
All they produce in County Kilkenny is Smithwick's.
I hope the Minister of State can take on board the gist of these amendments. It may be necessary to redraft the wording of the amendments proposed by Senators O'Reilly, Norris and O'Toole. Perhaps a Government amendment can be tabled on Report Stage. Senator O'Reilly is quite correct to say there should be no need to have a vote on this issue. Our sentiments on this section have been expressed by Senators on the Government side of the House.
Senator Norris said we have been lobbied in this regard. Every time Members of the Oireachtas meet their constituents, we are lobbied in some way. I suggest that the lobbying done in this instance by a group of people in south Kilkenny who want to bring a viable proposal to fruition was correct. Senator O'Toole hit the nail on the head when he said they were looking for a level playing field in which they could compete with those involved in ethanol and bio-fuel production in Brazil. I take my hat off to the Brazilian authorities for their economic efforts. The manner in which they have embraced bio-fuel production has had great knock-on effects for that country's economy, although its ecological effects are questionable.
It would be remiss of us not to do as much as we can in this legislation to promote the production of bio-fuel in this jurisdiction. There is a huge irony in the notion that we import 70% of the bio-fuel that is used in this country. At a time when we are talking about the protection of the environment and climate change, we are transporting huge volumes of bio-fuel over long distances to this country to be used in our economy. I am not expressing any anti-Brazilian feeling when I support these amendments and ask the Minister of State to consider them. As I have said, domestic producers deserve a level playing field.
I do not think anybody believes the development of a viable bio-fuel sector in this country will be a panacea for the agriculture industry. The possibility of the development of such an industry provides the potential for a floor in the market of cereal producers whose incomes have suffered substantially over recent years. Just as live cattle exports provide a floor in the beef market, the bio-fuel sector could provide a similar service for grain producers. It is particularly important in the aftermath of the sale a couple of weeks ago of Greencore's malting barley section to a British interest. This development went virtually unheralded in the media. Although there are a couple of small purchasers and merchants around the country, there are no large-scale malting barley purchasers left in Ireland as a consequence of Greencore's decision. The facility in question is now owned by overseas parties who might not necessarily have the interests of Irish agriculture at heart. It is important for the Oireachtas to do what it can in this legislation to put in place some kind of mechanism whereby that facility can be replaced.
I echo the sentiments of Senator Norris and others who spoke about the need to introduce tariff control. I understand that more than eight EU countries have imposed the level of tariff we are seeking in these amendments. Such a tariff has been introduced in Sweden, Portugal, Spain, Germany, Austria, Slovenia, Hungary, Poland, Lithuania, Latvia, Estonia, Romania, Bulgaria, Greece and possibly other EU member states. It would be appropriate for us to introduce a similar level in this jurisdiction. This Bill gives us an opportunity to do so.
Senator O'Toole dealt in detail with some of the arguments that have been made against the development of a bio-fuel sector in this country. I agree with the sentiments he correctly expressed. There is no need for me to repeat them.
I feel strongly on this issue because the development of a bio-fuel plant has been proposed in south Kilkenny. There is a compelling economic argument for such a facility to be developed in my region. With the exception of Donegal, the south east was the region of Ireland with the highest level of unemployment throughout the Celtic tiger years. County Wexford, County Kilkenny and parts of County Carlow have traditionally had the highest unemployment levels in the country, when County Donegal is not included.
Correct.
That may have changed slightly since the start of our economic difficulties of the past three or four years, although I do not think it has changed a lot.
No, it has not.
Many people do not realise that. We should grasp any opportunity for job creation in the south east. It may be necessary for the Minister of State and his officials to redraft the Opposition proposals as set out in these amendments. I hope that in his response, the Minister of State will say he can accept them now or, as a second resort, in modified form on Report Stage. I do not think we should miss this opportunity to shape this legislation in a way that would benefit Ireland's employment levels, the Department of Finance's tax revenue capabilities and this county's agriculture industry. I hope the Minister of State will accept the amendments.
I propose to respond to amendments Nos. 3, 4, 6, 7, 8, 12, 13, 28 and 32 together. I thank Senators Norris, O'Reilly, Walsh, McCarthy, O'Toole and John Paul Phelan for contributing to the debate on this matter. I assure them the Minister is very much on board in relation to the spirit of the proposed amendments. The national bio-fuel obligation will incentivise the sustainable growth of the indigenous bio-fuel market, support indigenous bio-fuel producers and expand production. The EU sustainability criteria will also provide a competitive advantage for Irish and other EU producers by ensuring non-EU imports meet strict environmental guidelines. We must, however, remain compliant with EU and WTO guidelines on trade, meaning we cannot restrict imports unfairly.
The amendments largely suggest Ireland should mimic the fuel standards in place in other member states, including Germany and France, which serve as an effective barrier to outright competition from imports outside the European Union. Essentially, there are two separate tariff codes – one for denatured or industrial and the other for food grade or agricultural. The latter is significantly higher at 19.2 cents per litre versus 10.2 cents per litre. Many member states have done this with the explicit aim of protecting domestic production such as in the Germans' bio-fuel quota Act and the French legislative equivalent.
The European Commission would have to be notified under Directive 98/34/EC as this type of initiative would be deemed to be a technical regulation. From a national perspective, the only substantial problem with the course of action is that the United Kingdom has not adopted such a measure. Given that we import 60% of our road transport fuel from the United Kingdom, such a measure could have the potential to substantially increase costs to Irish consumers, theoretically, as they would have to be supplied with a different blend of bioethanol.
The fact this standard is in widespread use across Europe means much of European production capacity is already geared towards producing the same. The bioethanol in use in Ireland probably already meets this standard. As such the Minister, Deputy Eamon Ryan, is considering this with a view to making an amendment in the Dáil. We are in the process of notifying the Commission about this change, as required. This is known as a technical regulation. Once notification is lodged, we can then make the amendment in the Dáil. We would prefer to do it on Report Stage in the Seanad but because of the timing factors involved, it will arise on Second Stage in the Dáil. It is key to ensure the consumer will not be adversely affected by cost increases stemming from any such measure in this area. The concept of a deferred introduction is one the Minister is considering in that regard. I do not propose, therefore, to accept the amendments on the grounds that it would be pre-emptive to do so. I do not propose to accept the amendment to the Title on the grounds that it already deals with this issue in so far it is possible or appropriate to do so.
I thank Senators for their contributions. The spirit and content of their amendments will be approximated to the Bill when it reaches Second Stage in the Dáil.
One cannot make amendments on Second Stage.
It is perfectly clear we have won the argument in this House, a fact with which the Minister of State has agreed. There is universal support for the amendments and I am glad we have had the opportunity to table them. Will the Minister of State examine as urgently as possible any facility for accepting them in this House rather than in the Dáil, as the arguments for their acceptance was made here? The Seanad is always attacked for being redundant. This, however, is a damn good day's work, creating the possibility of 1,000 jobs being created in an economic black spot. We have met all the scientific, environmental and agricultural arguments. It is important, therefore, that the amendments are introduced in the Seanad, even if it is by the use of a deferred date.
The Minister of State knows there have been erred calls for the abolition of this House, yet today there is a scandalous absence of press representation – I accept The Irish Times is probably watching on the monitor — for one of the most vital debates in which I have ever taken part, as it secures jobs. I have received correspondence from people across the country in despair, as they are losing their jobs and houses. Today the Seanad has done something positive. We did not call for another head on a plate, blood on the walls or guts on the carpet, which is the routine in Parliament.
On competition law and tariffs, I have referred to the unanimous report from the United States, Brazil and the European Union which answered that argument. Since eight countries – Senator John Paul Phelan has suggested there are more — have introduced tariffs, I do not see any reason we should kowtow to the British. We should get on with it and have the amendments accepted in this House. Will the Minister of State give the Official Report of the Committee Stage proceedings to the Minister, Deputy Eamon Ryan, to highlight the unanimous approval for the amendments and inquire as to why it is not possible to have them passed in Seanad Éireann?
The reasons behind my tabling these amendments were based on dealing with the jobs crisis by creating jobs at bio-fuel producer and post-producer level and achieving a reduction in carbon emissions to keep in line with our Kyoto Protocol and EU requirements. We won the arguments and the Minister of State has accepted them. However, it is disappointing that he cannot accept the amendments. I am sure the ordering of business in the House could facilitate the Government in sponsoring the amendments and tabling them on Report Stage in the Seanad. Why must it wait until Report Stage in the Dáil?
It is vital this legislation contains a specific commitment to job creation. I agree with colleagues that it is a disgrace there are no members of the media present for this debate which is of such critical importance that the young unemployed people need to hear it on radio and television. People outside the House will wonder to what degree our deliberations contribute to job creation. They are not interested in grandstanding or rhetoric; they want practical steps to job creation.
The amendments only aim to create nothing but a level playing pitch by protecting the indigenous bio-fuel industry. In doing so we would be sustaining and creating new jobs. There can be no higher objective for this legislative assembly when 437,000 citizens are without work. That is why I am asking that the amendments be accepted on Report Stage in the Seanad.
The United Kingdom imports 89% of its bio-fuel, a figure it will want to correct. Any bilateral agreement should achieve this. It cannot be repeated often enough that by virtue of importing bio-fuels, the Minister is creating more carbon emissions and failing to resolve the international problem as attempted by this legislation. It is self-destructive. It is bizarre and crazy that the Minister is attempting to reduce carbon emissions through this 4% obligation. In the structuring of the obligation in this legislation, the Minister continues to acquiesce to bio-fuels being imported from Brazil and elsewhere to Ireland, which will obviously generate carbon emissions. This defeats the objectives of the Kyoto Protocol and the objectives of the Copenhagen agreement when transferred into legislative format. It also defeats domestic commitments. Without attempting to be unnecessarily partisan, it is bizarre that such a proposal comes from a Green Party Minister.
Progress reported; Committee to sit again.
I am sure Members would like join me in welcoming Archdeacon Gordon Linney and Mrs. Linney to the Gallery. They are very welcome.