Dáil Éireann Debate, Tuesday - 13 October 2009
97 Deputy Seán Connick asked the Minister for Finance if he will extend the mineral oil tax relief offered to a company (details supplied) by 7.5 million litres by transferring unused allocation under the EN590 category; and if he will make a statement on the matter. [35320/09]
View answerWhile the Minister for Communications, Energy and Natural Resources is responsible for energy including biofuels policy, the Finance Act 2006 provided for excise relief for some 163 million litres of biofuel per annum over five years to end 2010. Under the scheme, biofuel produced by projects approved by the Department of Communications, Energy and Natural Resources are exempt from excise duty. This serves to reduce the additional costs associated with the production of biofuels and consequently allows them to compete with conventional fossil fuels. The primary purpose of the scheme is to encourage the use of biofuels on the Irish market. It was also hoped that it would help in part to kick start the domestic biofuels industry in producing biofuel feedstock and blending in Ireland. Long-term general excise reliefs are not anticipated for biofuels.
The Finance Act 2006 provision led to a competitive scheme in 2006, run by the Department of Communications, Energy and Natural Resources, which allocated excise relief to 16 companies and consortia (out of 102 applicants). None of the 16 successful applicants was awarded the full amount of relief that they applied for. Under this scheme, the company in question received excise relief on 32 million litres of biofuel blends. According to returns to the Department of Communications, Energy and Natural Resources, as at the end of August 2009, it had used some 3.2 million litres or about 10% of its allocation.
Despite having used to date only a small proportion of its original allocation the company is now seeking a further additional allocation under the scheme. There are no plans to reallocate excise relief under the scheme. In that context I would draw to the Deputy's attention to the fact that the forthcoming Biofuel Obligation Scheme, being introduced in 2010, will be of benefit to the company in expanding the market of biofuels in Ireland, and underpinning the development of that market in future years. The introduction of the obligation will require all fuel suppliers to ensure that biofuels represent a certain percentage (probably 4%) of their annual fuel sales. The obligation is designed to provide a long-term market based framework for the development of a biofuels sector and delivery of biofuels targets to 2020.
