The Irish Road Haulage Association said this would eliminate enormous exchequer losses, washing of diesel fuel and the subsequent black economy, that funds paramilitaries.
"The dumping of chemical sludge with this process is also a menace to the environment", said the IRHA.
But Lorcan McCabe, Chairperson of the ICMSA Farm Services and Environment Committee described the request as completely excessive and clearly unacceptable. "What is needed in this situation is enforcement of the law", he said.
"Green diesel is for farm use only. Any problems described by the IRHA do not arise as a result of farm diesel, but rather as a result of blatant law breaking by unscrupulous rogue hauliers. If the law was enforced and these hauliers required to abide by the law of the land, then there would not be any problem." He called on lobby groups to work together to convince the Government to reduce duty on fuel.
Meanwhile, the hauliers have targeted the Government's huge duty haul, pointing out that the cost of taking a consignment of fresh Irish beef to Rome includes tax of €477. And the total annual tax yield from a 40 tonne articulated truck is €24, 809 of duty on diesel and €2,100 for road tax.
A 10-truck operation with annual sales of €1 million must contribute €269,090 to the exchequer before the operator can earn some money.
In a statement to the Dáil Committee for Enterprise and Small Business, the IRHA said, "Many of your colleagues used to speak of the problem of 'peripherality' of being an 'island off an island.' Keeping this economy competitive is a difficult job in terms of logistics. The road transport industry in Ireland has done an admirable job in this regard. All this has been achieved with absolutely no state aid, grants or subventions of any kind."
The IRHA statement also pointed out that the EU pays many farmers to leave 5% of their farmland set-aside.
"If Brazil can grow sugar cane to reduce its reliance on imported fuel through a methanol programme, surely the EU can grow oil seed rape or sugar beet on this under-utilised resource", said the hauliers. But they see the main measures needed to end their fuel cost crisis as an end-user rebate for licensed hauliers who have tax clearance certificates, and a European initiative to purchase oil in euros rather than dollars.
IFA Industrial Committee Chairman, Tom Dunne, also rejected calls from the IRHA to abolish green diesel.
He said this would penalise law abiding farmers, whereas the real targets are unscrupulous hauliers and criminal elements engaged in the illegal washing of marked diesel.
"This latest call by hauliers is part of their continuing campaign to put farmers off the road, and prevent them from legitimately delivering their produce to market using their own machinery", he alleged.
IFA has sought an urgent meeting with the Hauliers' Association to voice objections to their campaign against farming.
Silage contractors are also reacting to fuel price hikes, by looking for an extra €10 per acre from farmers, says ICSA rural development chairman John Heney.
"I have every sympathy with the contractor, but the blunt fact is that grass silage is at increasing risk of becoming uncompetitive. This is a critical problem for Irish cattle farmers who rely so much on grass silage".
"I am also concerned at the effect on all rural dwellers who have no other option than their car."
"Rural dwellers do not have the option of public transport and it seems that rural life is rapidly becoming a luxury that few can afford."