Tuesday, 19 October 2004

Questions (195)

Trevor Sargent

Question:

327 Mr. Sargent asked the Minister for Finance if he will take steps by the appropriate fiscal measures to encourage the development of an indigenous bio-fuel sector here in view of the extensive interest among farmers in growing energy. [25308/04]

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Written answers (Question to Minister for Finance)

The Deputy may be aware that section 98(a) of the Finance Act 1999, as inserted by section 50 of the Finance Act 2004, provides for the introduction of a scheme for excise tax relief for bio-fuels. The purpose of the scheme is to allow qualified and conditional relief from excise of bio-fuel used in approved pilot projects for either the production of bio-fuel or the testing of the technical viability of bio-fuel for use as a motor fuel.

The details of the scheme are being finalised in conjunction with the Department of Communications, Marine and Natural Resources. The European Commission has confirmed that the scheme would represent a State aid and consequently its approval is required. The EU Energy Tax Directive of 2003 envisages such tax relief and the Commission has approved schemes for excise relief of bio-fuel in other EU member states. Formal application for Commission approval will be made shortly and, assuming approval is granted, the necessary commencement order will then be signed.