Tax cuts ‘are needed to boost the biofuel industry’
It follows increased interest in the development of ethanol from beet crops as an alternative motor fuel following Greencore’s decision to close Carlow sugar factory next month.
Ironically, the company commissioned a study six years on the feasibility of producing ethanol in Mallow from surplus sugar beet and presented a copy to the Department of Agriculture and Food.
Greencore, parent company of Irish Sugar, stressed at the time that the proposal was very preliminary and no decision had been made as to whether it would proceed with it.
Now, there are calls to renew interest in the idea and suggestions from politicians that the Carlow sugar factory be converted to ethanol production.
Some farmers in Wexford are already examining the possibility of producing beet for making ethanol rather than sugar.
But tax exemptions are deemed vital to enable the potential of biofuel to be tapped and developed.
These, however, requires European Union approval as the tax exemptions have been interpreted as “State-aid” and require approval from Brussels.
Adding to the debate is an EU requirement on Ireland to have a minimum of 2% of transport fuel sourced from biofuel by this year and 5.75% by 2010, soaring oil prices and the need to abate global warming.
The country’s €100 million weekly spend on fuel imports and the stated need to reduce greenhouse gas emissions are among the arguments being advanced for biofuel production.
Taoiseach Bertie Ahern was urged in the Dáil earlier this month to give the issue top priority in the interests of farmers, factory workers, motorists and every taxpayer in the country.
Green Party leader Trevor Sargent said other countries have tax exemptions on biofuel and he asked why Ireland was dragging its feet on the issue.
“There is more energy and interest from this Government in the stallion tax than in the livelihoods of people who are affected by an economic downturn in agriculture,” he said.
The Taoiseach said the Government has been in discussions with the EU on the State-aid issue and the methods which Ireland can use to input resources.
He added that those discussions are still ongoing but it is hoped they will be completed soon.
John Browne, Minister of State at the Department of Agriculture and Food, and the Communications, Marine and Natural Resources Minister, Noel Dempsey, are preparing a package on the issue which is currently under discussion with the Department of Finance.
“The question whether this plan can be implemented is based on the State-aid issue. If this issue is resolved positively, the Ministers have the plan ready to present to the Department of Finance. The Government is in a position to move on this issue but we must first await the resolution of the question of the ability of the State to put in resources,” Mr Ahern said.
Teagasc specialist Bernard Rice told the national tillage conference in Carlow last month that ethanol could be produced from four raw materials in Ireland - sugar beet, wheat, straw and wood residues.
The technology for conversion of beet or wheat is well established, and will be used by several EU countries to meet their 2010 substitution targets.
The main problems are the cost of the ethanol produced and the scale needed for viability.
“If we are to have any hope of getting ethanol production off the ground in Ireland, we need to start with well-established technology. If the current sugar negotiations lead to a reduction in sugar quota, this would be an opportunity to provide an alternative opportunity for farmers, factory workers and all that benefit indirectly from the industry,” he said.
