Dáil Éireann Debate, Tuesday - 11 June 2013
94. Deputy Maureen O'Sullivan asked the Minister for Communications, Energy and Natural Resources the total extra annual cost to motorists here of the biofuels blending obligation; if an assessment has been carried out on the indirect land use change impacts of biofuels here; and if he will make a statement on the matter. [26631/13]
View answer526. Deputy Bernard J. Durkan asked the Minister for Communications, Energy and Natural Resources the degree to which the use and production of biodiesel, bioethanol or other energy continues to develop in accordance with targets; and if he will make a statement on the matter. [27346/13]
View answerI propose to take Questions Nos. 94 and 526 together.
The 2009 Renewable Energy Directive set a binding target on all Member States to achieve at least 10% renewable energy in transport by 2020. The primary means, for most if not all Member States, of meeting this target will be by the increased use of biofuels.
The Biofuel Obligation Scheme was introduced in July 2010 and works by obligating large road transport fuel suppliers to bring a certain amount of biofuels to the market. The aim of the scheme is to ensure that Irish consumers have access to appropriately priced, sustainable and reliable sources of biofuel. The scheme is certificate based and the trading mechanism allows the scheme to provide a stable market, protecting consumers from structural rigidities in the fuel supply market, which could result in episodic periods of high fuel prices, while also ensuring delivery of targets.
This has seen increased amounts of biofuels such as biodiesel and bioethanol being deployed in Ireland. From the start of this year, I have increased the obligation on fuel suppliers to include at least 6% by volume biofuels in their overall annual disposal of road transport fuels from the previous obligation rate of 4%. The recent increase in the obligation rate along with future increases will see the biofuel market grow which will continue to create further opportunities for the indigenous biofuel industry.
Accurately assessing the effect the biofuel obligation has on prices paid by the motorist is complex as open market costs are only known by the market players themselves. However, my Department estimates that the extra cost to the motorist of using biofuels in 2012 was in the region of €28 million which when factored into the overall consumption of road transport fuels of 4.231 billion litres equates to less than 0.7 cent per litre.
The issue of indirect land use change (ILUC) is a very complex one and assessing its impact is extremely difficult. Late last year, the European Commission, following a number of analytical studies to better understand the potential indirect land-use changes and impacts associated with the production of biofuels, circulated a proposal to amend sections of the Renewable Energy Directive. This proposal is being progressed during the Irish Presidency of the Council of the EU. One of the amendments proposed is that no more than 5% of the energy in the transport sector should come from biofuels produced from certain feedstocks. The proposal also aims to promote the production and uptake of advanced biofuels with low risk of ILUC and to improve the efficiency of biofuel production processes. The European Commission proposal will continue to be discussed under the Lithuanian Presidency of the Council. In 2012, 128 million litres of biofuel was placed on the market. Of this, more than half was biodiesel produced from wastes and residues and therefore had no indirect land use impacts.
