Dáil Éireann Debate, Tuesday - 17 October 2006
181 Mr. Penrose asked the Minister for Agriculture and Food her views on advocating changes to the carbon credit payment system and increasing establishment grants for biomass crops in order to further incentivise biomass fuel crop production here; and if she will make a statement on the matter. [32880/06]
View answerThe management of carbon credits is in the first instance, the responsibility of the Minister for Environment, Heritage and Local Government. The Government will use carbon credits for the sole purpose of achieving compliance with Ireland's commitment under the Kyoto Protocol to limit its greenhouse gas emissions to 13% above 1990 levels.
Under the EU burden sharing arrangements Ireland will have the benefit of approximately 63 million allowances per annum, each of which must be surrendered by the State in lieu of one tonne of CO2 emissions during the 2008-2012 period. This assigned amount represents our level of emissions in 1990 plus 13%. Current projections for the 2008-2012 period show that average annual emissions will be approximately 70 million tonnes in the absence of further measures to reduce them.
The gap of 7m tonnes between projected emissions and available allowances will be closed through: measures to reduce emissions throughout the economy, in addition to those set out in the National Climate Change Strategy and those introduced subsequently; emissions reductions, or the purchase of carbon allowances, by installations participating in the EU Emissions Trading Scheme; and the purchase of additional allowances or credits.
The Government has stated its intention to purchase up to a maximum of 3.607 million allowances or credits per annum over the Kyoto Protocol commitment period 2008-2012. The National Treasury Management Agency will purchase additional allowances or credits on behalf of the State. Under the Kyoto protocol, there is no "carbon credit payment system", in Ireland and there are no plans to introduce one.
With regard to establishment grants for biomass crops such as short rotation coppice and miscanthus, these crops have considerable potential for heat/electricity generation. There has been renewed interest among some producers in growing these crops, however, production is relatively undeveloped due to the substantial initial establishment costs. My Department has received a number of proposals for the introduction of establishment grants and these are currently being considered.
Support to farmers for growing energy crops is available under the Energy Crops Scheme introduced by Council Regulation 1782/2003. Under this scheme, aid of €45 per hectare is available, where the crops are intended for use in the production of biofuels and electric and thermal energy produced from biomass. The EU Commission has recently published a Report on implementation of this scheme and has proposed an amendment to the scheme allowing the possibility of payment of national aid towards establishment costs of multiannual crops. This Proposal is being considered at working group level in Brussels. In addition to this scheme, set aside land can be used for a variety of non-food uses including the growing of crops for energy purposes and will therefore qualify to activate set-aside entitlements under the Single Payment Scheme.
Energy crops are still a relatively new field and the economics are marginal compared to conventional crop tillage. Generally speaking the main constraint is poor profitability for growers and others in the sector. A Ministerial Task force has recently been established to bring forward measures to develop the bioenergy sector in Ireland. The Task force will prepare a comprehensive National Bioenergy Action Plan by end 2006.
