Transport industry faces obligation to use biofuels

This from Tim O'Brien in The Irish Times - An obligation on the transport industry to increase its use of biofuels, has been announced by Minister for Natural Resources Noel Dempsey.
He said it would ensure that 5.75 per cent of the Republic's transport fuel was derived from renewable sources by 2009 - one year ahead of a similar target contained in an EU directive on the use of biofuels.
In a separate move, Minister for Transport Martin Cullen is planning to announce approval for a pilot scheme to provide grant aid for hauliers converting their vehicles to run on pure plant oil.
Mr Dempsey said the biofuels obligation would achieve carbon savings of 700,000 tonnes per year by 2009, the equivalent of taking almost 200,000 cars off the roads. He said the move sets clear attainable targets and is a measured approach to developing the biofuel industry in Ireland.
In addition to the 5.75 per cent target by 2009, the Government has also set a target of 10 per cent market penetration of biofuels by 2010.
Mr Dempsey said the industry would also be helped by last week's announcement by the Department of Agriculture of a €6 million bioenergy scheme to top up an EU energy crop premium.
The target is to be achieved by blends of up to 5 per cent plant oils in regular petrol and diesel. Mr Dempsey also sees an increased market for plant oils through engine modifications, which would allow hauliers to use fuels of up to 100 per cent pure plant oil.
To encourage such conversions, Mr Cullen has already approved a small pilot programme which will provide 75 per cent grant aid for conversion kits and labour to enable lorries to be driven on pure plant oil.
The use of pure plant oil is common in European countries, particularly Germany. The German Irish Chamber of Industry and Commerce has been advocating its use in the Republic for a number of years. The chamber has been appointed by the Department of Transport to administer the pilot programme.
Details of the scheme are available on www.biofuelsfortransport.ie
The initiatives have been welcomed by the Irish Road Haulage Association and the biofuels industry, both of which have warned however that excise duty relief must be expanded for the schemes to work.
Peter O'Neill, of ecomotion.ie which converts commercial vehicles and sports utility vehicles to run on pure plant oil, said current excise relief quotas for pure plant oil must be significantly increased.
Mr O'Neill said the cost of conversion was recouped by vehicle owners over time, but this could not happen if the plant oil was subject to taxes which made it similar to the price of diesel. A limited number of suppliers have been given quotas to sell fuel exempt from duty. But to expand the number of vehicles using biofuel it would be necessary to expand the exemption quotas, he said.
Jimmy Quinn, of the Irish Road Haulage Association, also called for the extension of excise relief. "The Government will have to wean itself off excise duty if it wants the biofuel industry to work," he said. Such a move would ensure biofuels were readily available across the State, Mr Quinn said.