I propose to take Questions Nos. 46, 56, 60, 61 and 186 together.
The Programme for Government commits to the development of an Irish biofuels industry and to the development and deployment of bio-energy generally in Ireland. In this context, the Government has announced its intention to introduce a Biofuels Obligation in 2009, which will require all fuel suppliers to ensure that biofuels represent a certain percentage of their annual fuel sales. Implementation of the obligation will require detailed consultation and development of appropriate legislation. Fuel suppliers will also require time to make the necessary logistical and supply adjustments to facilitate meeting their biofuels targets. The 2009 timeline reflects these requirements.
The obligation will build on the results of the 2005 and 2006, mineral oil tax relief schemes for biofuels, which saw a total of 18 projects being awarded excise relief between 2005 and 2010. The schemes, valued at over €200m aim to ensure that we reach an initial target of over 2% market penetration of biofuels by 2008. They were designed as interim measures to accelerate the level of biofuels in the fuel mix, in advance of the introduction of a biofuels obligation in 2009.
As a result of these schemes, biofuels are already being mainstreamed in blends of up to 5% at a number of existing petrol and diesel pumps, and higher blends are being sold to identified vehicle fleets.
One of the aims of the Biofuels Mineral Oil Tax relief schemes and the Biofuels Obligation is to mainstream the availability of biofuels within the existing fuel station supply network and provide market players with long-term certainty and a stable investment climate. The Irish oil industry is fully privatised, liberalised and deregulated. There is free entry into and out of the market. There is no price control on oil products and this is to ensure that the market is fully competitive. Current trends in the petrol station network including the development and retention of individual retail units are a matter for the commercial companies themselves, I have no statutory function in the matter.
The biofuels Mineral Oil Tax Relief schemes are complemented by a range of other support measures including a 50% VRT relief on Flexible Fuel Vehicles, which are capable of running on blends of up to 85% ethanol in petrol, and a commitment in the Bioenergy Action Plan to the introduction of a minimum requirement for the use of biofuels in State owned and public transport vehicles. Grants for the conversion of diesel engine vehicles to use Pure Plant Oil (PPO) have also been made available by Sustainable Energy Ireland (SEI) and the Department of Transport. The Department of Agriculture and Food has also introduced €6m energy crop "top-up" payment of €80 per hectare on top of the existing EU Energy Crops Premium of €45 per hectare.
As we move towards higher targets for biofuels, the issue of sustainable global development of Biofuels is coming increasingly into focus. It is expected that the European Commission's forthcoming renewable energy legislative proposals, will contain targets for biofuels market penetration, subject to the introduction of sustainability criteria and the coming on stream of second-generation biofuels.
Ireland's biofuels obligation will take account of EU sustainability initiatives in relation to biofuels and I intend to work very closely with my EU colleagues in addressing this highly complex challenge for biofuels policy.