Budget support for biofuel welcomed

FARM leaders have welcomed the support in the budget for the country’s fledging biofuel industry, but suggested that more needs to be done if it is to become a new and viable enterprise.

Finance Minister Brian Cowen announced an excise relief package for biofuels costing over €200 million over a five-year period from 2006-2010, together with funding to assist the development of an indigenous biofuel plant.

The decision came as demands increase for the development of biofuels because of soaring fuel prices and the threat facing the country’s sugar beet industry.

Mr Cowen said Ireland should set an initial target of 2% of the fuel market to be taken up by biofuels by 2008 and that it should achieve this through targeted excise relief measures.

The level of excise relief will start at €20m in 2006 and will be increased to €35m in 2007 and to €50m in each of the following three years.

He said this relief is expected to support the use and production in Ireland of some 163 million litres of biofuels per year.

Mr Cowen said the initiative will benefit the environment in terms of a reduction in CO2 emissions. It will enhance security of supply of fuels, and create jobs and outlets for agriculture production. He said it is estimated that the programme, which will require EU approval as a State aid, could give rise to hundreds of extra full-time jobs.

IFA president John Dillon welcomed the support for the biofuel sector, as did ICSA general secretary Eddie Punch.