Wood biomass is one of the most versatile of renewable energy sources and has the potential to play a major role in Ireland's future energy strategy. My Department actively encourages the development of the wood-energy sector through a range of support measures. These measures complement the schemes introduced by the Minister for Communications, Marine and Natural Resources targeting the user side of the chain through the Pilot Bio-heat Boiler Deployment Programme and the Greener Homes Scheme.
A new capital grant scheme to support developing enterprises in the wood chip supply sector was launched earlier this week in my Department. The Wood Biomass Harvesting Machinery Grant Scheme will grant aid the purchase of medium-scale wood chippers and self-contained chippers by providing up to 40% of the purchase price of this equipment. As more businesses switch to wood chip to meet their energy needs, this machinery grant scheme will provide critical investment to build our domestic woodchip supply. Full details of the Scheme including application forms are available on the forestry pages of the Department's website.
My Department is also supporting a number of wood energy pilot projects which aim to encourage increased use of wood fuel, primarily in the form of woodchip, with a particular emphasis on the development of effective and efficient wood fuel supply chains from private growers to end users. Examples of the pilot projects being funded include the County Clare Wood Energy Project and the Forest Link project in Donegal.
COFORD, (the National Council for Forest Research and Development), which is wholly funded by my Department, is running a series of thinning and chipping demonstrations across the country. In addition, COFORD hosts and manages a website (www.woodenergy.ie) dedicated to providing factual information on using wood biomass as a carbon neutral, renewable energy source.
Biomass crops such as willow and Miscanthus can also contribute to Ireland's renewable energy strategy. Production of these crops in Ireland is relatively undeveloped mainly due to the initial high costs of establishment. For this reason, I have introduced a new Bioenergy Scheme to provide establishment grants to farmers for up to 50% of the costs associated with establishing willow. The aid is payable on set-aside land and on areas that have been subject to an application under the EU Energy Crops Scheme. The maximum payment rate is up to €1,450 per hectare and will be paid in two instalments:
A maximum of 75% of the aid (€1,088 per hectare) will be paid when the crop is established.
The remaining 25% of the aid (€362 per hectare) will be paid one year after the payment of the 1st instalment grant, provided the applicant has adequately maintained and managed the crop, including the first year cut back.
Willow and miscanthus are also eligible for the EU premium of €45 per hectare available under the EU Energy Crops Scheme and for the new €80 per hectare national payment, which I intend to introduce in 2007. The €80 payment will be paid as a top-up to the €45 EU premium and increases the overall payment available to €125 per hectare. The additional €80 payment is available for 3 years and is subject to a maximum ceiling per producer over the 3 years. The current ceiling is 37.5 hectares per producer. I am pursuing EU approval to increase this ceiling.
REPS payments apply to the planting of willow or miscanthus up to a maximum area on REPS holdings of 10 hectares or 25%, whichever is greater, provided the overall area planted does not exceed 20 hectares per applicant. On the REPS area farmers growing willow or miscanthus can receive an adjusted REPS 3 payment of €155 per hectare, increasing to €189 per hectare under REPS 4 in addition to the establishment grant and the €125 premium. Following contact with the EU Commission, my Department has also received confirmation that land used for growing willow or miscanthus is eligible to benefit from the Single Farm Payment.