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Fuel Production.

Dáil Éireann Debate, Wednesday - 25 January 2006

Wednesday, 25 January 2006

Ceisteanna (825, 826)

Brian O'Shea

Ceist:

931 Mr. O’Shea asked the Minister for Community, Rural and Gaeltacht Affairs the discussions he has had with the Departments of Finance, Agriculture and Food, Enterprise, Trade and Employment and Communications, Marine and Natural Resources regarding the viability of ethanol and biodiesel production as a rural enterprise; the action he proposes to take in regard to this potential rural enterprise; and if he will make a statement on the matter. [2357/06]

Amharc ar fhreagra

Brian O'Shea

Ceist:

932 Mr. O’Shea asked the Minister for Community, Rural and Gaeltacht Affairs his proposals to set up an expert group to examine the viability of ethanol and biodiesel production as a rural enterprise; if recommendations and a report will be made on same; and if he will make a statement on the matter. [2358/06]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Community, Rural and Gaeltacht Affairs)

I propose to take Questions Nos. 931 and 932 together.

I refer the Deputy to my reply to Parliamentary Question 32690/05 of 8 November 2005. In that reply, I advised the Deputy of the 2004 amendment to the Finance Act 1999 which provided for the introduction of a scheme for mineral oil tax relief for biofuels. A scheme under the Act was launched by the Department of Communications, Marine and Natural Resources in April 2005 and was open to applicants from all areas, including rural and Gaeltacht areas. A total of 34 applications were received under the call for proposals by the closing date and eight projects were awarded excise relief under the scheme over a two-year period to 2007. Among the successful projects were proposals for the Galway, Donegal, Kilkenny, Wexford and Wicklow regions. The scheme is an initial measure designed to stimulate market development, and will cost €6 million in excise foregone over the two year period.

Following the success of this pilot biofuels scheme, a package of excise relief valued at €205 million was announced in the context of budget 2006 and will allow Ireland reach a target of 2% market penetration of biofuels by 2008. Funding is also being provided towards the capital cost of developing biofuels processing facilities. The Department of Communications, Marine and Natural Resources is now developing a suite of measures to roll out the new biofuels programme, in consultation with the Department of Finance. A more detailed study on policy options for development of a biofuels market will be published by Sustainable Energy Ireland shortly. This follows publication of the "Liquid Biofuels Strategy Study for Ireland" by Sustainable Energy Ireland in 2004 and referred to in my earlier reply.

The Department of Communications, Marine and Natural Resources is responsible for the promotion and development of renewable energy including biofuels. In the circumstances, I have no plans for this Department to carry out additional research in this area. However, as part of my Department's overall remit in relation to rural development matters, I continue to maintain a close interest in matters relevant to the development of rural areas especially in an emerging policy context. In this regard, I should mention that my officials are in ongoing discussions with Sustainable Energy Ireland, Comhdháil Oileáin na hÉireann-The Irish Islands Federation and individual island communities regarding the promotion of sustainable energy projects on the islands.

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