MINISTER FOR Energy Eamon Ryan is standing over his decision on new rules from next July obliging fuel companies to include a minimum 4 per cent biofuel component in all transport fuels.
Mr Ryan said yesterday that it was necessary to introduce the biofuels obligation not only for environmental reasons but also for energy security reasons.
“It’s an oil supply that is not coming from the Middle East which we are almost wholly reliant on,” he said. With the new 4 per cent requirement it would allow Ireland to run essential equipment in the event of an oil shock, he said.
The obligation will mean that circa 215 million litres of biofuels (about twice the current volume) will be used in Ireland each year. As a result, it is estimated that fuel prices will increase by about one cent a litre, based on current oil prices.
However, about 85 to 90 per cent of the biofuels will be imported, mostly from Brazil, the world’s biggest supplier. The Minister insisted yesterday that no bioethanol would be sourced from areas where rainforests had been sacrificed. He also emphasised that rigorous sustainability tests would be applied, including a requirement that greenhouse gas emissions from biofuels will be 35 per cent less than fossil fuels.
Mr Ryan also pointed to what he said were the environmental benefits of the new target, and its role as an impetus to developing a biofuels industry in Ireland.
However, the Opposition and other interested groups were critical of aspects of the plan. Fine Gael’s energy spokesman Simon Coveney said he welcomed a target but said he was concerned at the absence of a plan for domestic production.
“If we are forced to import the majority of biofuels, it makes no sense financially or economically. The imported fuels will leave a huge carbon footprint.
“Consumers will be asked to pay more but there is no incentive to develop the industry here. Importing biofuels from South America or Africa makes a mockery of climate change policy,” said Mr Coveney.
Labour spokeswoman Liz McManus said the new lower target was welcome but said it must lead to increased production of indigenous biofuels.
Pointing out that the rush to biofuels had led to food shortages and environmentally damaging practices, she said the industry in Ireland had huge potential for growth without competing with land or food.
“Teagasc has estimated that potentially up to 100,000 hectares of land can be used for energy crops without impacting on food production,” she said.
Tom Bruton, president of the Irish Bioenergy Association, highlighted serious concerns he had about the scheme including the lack of incentive for indigenous producers.
“A similar scheme in the UK has led to 89 per cent of biofuels being imported. The 4 per cent obligation could be met by Irish raw materials. Converting grain into ethanol could meet half the target.
“Grain can be used as a raw material without impacting on food and by using good sustainability criteria. Ireland has a massive food surplus and critical energy security,” said Mr Bruton.
Similarly, IFA president Pádraig Walshe said if the Government was serious about addressing security of supply concerns, it must nurture the production of indigenous biofuels.
“The cost of production in biofuels is considerably more expensive than fossil fuel. Incentives must be given if we are serious about developing our own supply.”
Biofuels: main points
Biofuels, as the name suggests, are fuels derived from sustainable sources like crops and biological waste products. The most commonly produced fuels are bioethanol (which can be derived from crops like grains and sugar cane, or dairy by-products like whey) and biodiesel (made in Ireland from animal oils and from used vegetable oils).
The EU has set a 10 per cent target for energy from renewable sources in transport by 2020, a portion of which will come from biofuels.
A minimum percentage of biofuels in transport fuels was promised by the Government in 2007. Yesterday's 4 per cent obligation was lower than the original target – promised in 2007 – of 5.75 per cent for 2010. The more modest target is due to doubts over the impact of biofuel production on food prices, on its carbon footprint, and on increased emphasis on the potential of electric cars.
The Minister for Energy Eamon Ryan will not set a price but says the fuel companies must bear the price. Based on current oil prices, the cost of a litre of petrol and diesel will increase by about 1 cent for consumers.
Some 2 per cent of all transport fuels in Ireland derive from biofuels, most of which is provided by 16 suppliers through a tax incentive scheme. The new obligation will mean the use of 4 per cent, or about 217 million litres of biofuels in Ireland, based on 2008 figures. The obligation requires the fuels to emit 35 per cent less greenhouse emissions than conventional fuels and to satisfy sustainability criteria.
At present, indigenous groups account for about 30 per cent of all biofuels supplied in Ireland. This will fall to 15 per cent. The Government will need to rely on imports from Brazil, Argentina and the US. Concern has been raised about the carbon emissions involved in transporting those fuels here.
The Opposition and bioenergy interests say there should be matching incentives to stimulate biofuels production in Ireland. They say that Ireland is capable of producing all of the 4 per cent requirement indigenously, through pure plant oil, waste products, and grains.
There is an upper limit to the amount of biofuels that can be used in vehicles that have not been adapted. Mr Ryan said that biofuel imports would not come from rainforests or from sources that impact on the environment or lead to food shortages.
Mr Ryan has said the biofuels component may increase between now and 2020. This will depend on the development of more sustainable second- generation biofuels such as algae, straw resources, wood waste and miscanthus (elephant glass).