Wednesday, 5 July 2006
Dáil Eireann Debate
30. Mr. Connolly asked the Minister for Communications, Marine and Natural Resources if it is proposed to develop a native biomass or biofuel industry to enable in excess of 25 per cent of electricity and 10% of petrol and diesel requirements to be replaced and produced from arable crops such as elephant grass, oilseed rape, wheat and sugar beet; and if he will make a statement on the matter. [24640/06]
49. Mr. G. Mitchell asked the Minister for Communications, Marine and Natural Resources the extent to which various alternative and renewable fuels are being developed; and if he will make a statement on the matter. [26540/06]
93. Mr. P. Breen asked the Minister for Communications, Marine and Natural Resources the extent to which he intends to encourage the development of alternative or renewable fuels having particular regard to the need for import substitution, reduced dependence on fossil fuels and compliance with Kyoto protocols; the extent to which measures taken to date are expected to meet these requirements; and if he will make a statement on the matter. [26573/06]
104. Ms O. Mitchell asked the Minister for Communications, Marine and Natural Resources if he has had recent consultations with, the Department of Agriculture and Food, with a view to the utilisation of farm land previously used for beet growing for bio-fuel production; and if he will make a statement on the matter. [26539/06]
107. Ms McManus asked the Minister for Communications, Marine and Natural Resources if the Government will institute a comprehensive biofuels strategy including the refinery and distribution network; if he has liaised with the Department of Agriculture and Food in relation to sugar refinery assets at Mallow which could be converted to biofuels and in relation to the cultivation of biofuels crops; and if he will make a statement on the matter. [26659/06]
Biofuels and biomass policies are critical components of overall energy policy objectives to significantly enhance the contribution of renewable energy sources to electricity, heat and transport. The Renewables Directive (2001/77/EC) obliges Ireland to develop and implement a programme capable of increasing the amount of electricity from renewable energy sources to 13.2% of total consumption by 2010. The target of 13.2% approximates to 1450 Megawatts (MW) of installed generating capacity to be operational to the electricity network by 2010. This figure has been the minimum required by the EU Directives but I have now increased Ireland’s target to 15% of consumption, which approximates to 1650MW, by 2010.
Currently Ireland has over 850MW of renewable capacity connected. This consists of approximately 590MWs of wind powered plant, 236MW of hydro powered plant with the balance (circa 35MWs) made up of different biomass technologies. The additional new capacity required to achieve the target will be delivered by projects already selected under the Alternative Energy Requirement programme and the new Renewable Energy Feed In Tariff (REFIT) programme. Developers of biomass electricity generating plant may enter the REFIT programme. Biomass offers new opportunities for rural communities through diversification into energy crops and management of forest by-products. It offers significant potential for environmentally sustainable energy production, and provides valuable waste management solutions.
For these reasons I have provided for a significantly higher biomass feed-in price in the recently launched REFIT programme (€72 per megawatt hour compared to €57/MWh for wind-powered plants). I have also established new programmes to support the renewable heat and transport fuel sectors, which provide significant new opportunities for the development of bio-energy.
I have recently launched a new grant aid scheme for commercial renewable heat technologies. The scheme will allow companies and small businesses to obtain grants for the installation of wood chip and wood pellet boilers in large buildings and commercial premises. This programme is in addition to the Greener Homes scheme that I launched in March, which provides grant aid for individual domestic householders for renewable heat technologies, which includes grants for the provision of wood chip and wood pellet stoves and boilers. There has been very strong interest in the scheme since it was launched.
The 2005 pilot mineral oil tax relief scheme for biofuels has resulted in eight projects being awarded excise relief and will result in 16m litres of biofuels being placed on the Irish transport market by next year. Building on the success of this scheme, and following extensive discussions with industry and relevant Government Departments and agencies, I agreed with the Minister for Finance a further targeted package of excise relief valued at over €200m, which was announced in the Budget. The new excise relief programme will be rolled out from this year to 2010 and will enable us to reach the initial target of 2% market penetration of biofuels by 2008. This approximates to the amount of biofuels that can be produced in Ireland at present under current land use patterns, and bearing in mind the technical advances that would be required to support the economic large-scale development of second-generation biofuels from elephant grass, straw, wood and waste products.
Under current EU fuel standards, biofuel blends above 5% are not covered by all engine warranties, and any market levels around 10% could require widespread engine modification. The Department is currently reviewing these projections with the Department of Agriculture and Food and relevant industry players. When fully operational the new scheme is expected to support the use and production of some 163 million litres of biofuels each year and will provide new opportunities for the farming sector. The scheme will achieve CO2 savings of 257,000 tonnes by 2010 and represents 52% of the annual CO2 reductions to be achieved through vehicle and fuel tax measures identified in the National Climate Change Strategy.
The scheme requires State-aids approval from the Commission and I intend to launch the scheme in the coming weeks subject to ongoing discussions with the Commission. The Government is also providing funding towards the capital cost of developing biofuels processing facilities, which will critically underpin the excise relief package.
The potential for using existing facilities at the former sugar factory in Mallow for the production of biofuels and switching to the production of energy crops, is ultimately a commercial decision for developers. The new excise relief programme, which is subject to State-aid approval, will provide a framework in which farmers and potential developers can consider all such options.
One of the aims of the new scheme is to stimulate the development of biomass/feedstock production in Ireland to support a sustainable domestic biofuels industry. There are considerable potential benefits to be accrued from a cohesive approach to bio energy and biofuels for both the demand and supply sides. The Government is committed to ensuring that all relevant Departments and Agencies deliver collectively to best effect and consultations are ongoing across a range of Government Departments, including the Department of Agriculture and Food.
I will continue to work closely with my colleague the Minister for Agriculture and Food, in ensuring an integrated approach to bio energy issues and in the area of transport fuels I have asked my officials to give particular priority to maintaining and enhancing a fully holistic approach across Departments to progressing the biofuels/bio energy agenda, addressing supply and demand challenges and opportunities in a strategically planned way.
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