Road hauliers claim biofuel industry facing meltdown due to delayed Government strategy

ROAD HAULIERS and members of the Republic's fledgling biofuel business have said the industry is facing "meltdown" because of the Government's decision to delay publication of its biofuel policy.

Over the past two years, the Government has provided grants and sponsored pilot schemes for producers, hauliers and members of the motor trade involved in converting vehicles to run on biofuels.

The Government also allowed excise relief on 163 million litres of biofuel in a move that Minister for Transport Noel Dempsey said was the equivalent of taking about 70,000 cars per year off the road.

It was, he said, "one of the more significant measures being taken by Government to reduce CO2 emissions as part of its Kyoto commitments".

However, last week, Minister for Energy Eamon Ryan said that he was delaying publication of the latest Government policy on biofuels while a debate takes place on the impact of biofuels on food prices, particularly in the developing world.

Michael McBennett of Newcastle Co Dublin, who invested €300,000 in a press for rapeseed, said some elements of the industry are likely to be ruined because of the delay.

McBennett said that the argument about food or fuel was "entirely spurious", as crushed rapeseed could still be used to feed cattle, and it could be grown here without having an impact on the global price of food.

"The argument is about reducing our carbon emissions and having security of supply, and we have that in homegrown fuel.

"You could say, 'Why do we use land for forestry or have it set aside when it could be used to grow food?' It is a spurious debate," he said.

McBennett added that while the Government was considering the debate, many hauliers who had invested heavily on truck conversions found they could not get oil, as farmers won't grow it, as the uncertainty has affected the potential price of the crop.

Jerry Kiersey of haulage company Green Tiger Express initially converted three lorries to run on rapeseed oil, and received a grant from the Department of Transport to do so.

He was so impressed with the results - particularly in the environment of rising diesel prices - that he has since had more lorries converted. He too insists the food or fuel argument is spurious: "If we just grew biofuel on the lands which were formerly used to grow sugar, we would have enough to fuel 5,000 lorries which would have a massive effect on our greenhouse gas emissions, reducing our emissions trading payments, and we would have the security of supply that we don't have with imported diesel," he said.

Peter O'Neill of ecomotion.ie, which converts vehicles to run on plant oil, said his business would evaporate if the Government did not send a strong signal that it was in favour of biofuel. "I know many people who are in the same position - it seems the industry is facing meltdown," he said.

As far back as 2005, the Government set ambitious targets for biofuel use and in 2007 announced that by 2009, biofuels would account for 5.75 per cent of Ireland's transport fuel market. The EU target is to secure 10 per cent of transport fuel from renewable sources such as biofuels by 2020.

Ryan has previously said he is in favour of having a biofuels industry, and during the last election the Green Party publicised the fact that a party minibus was running on vegetable oil.

But last week, Ryan said that he was delaying publication of the Government's strategy on biofuels until September or October to allow the "food or fuel" debate to take place.

A spokeswoman for the Minister said the delay was "due to information coming to light and our fuller understanding of the impact of biofuels on food prices and the developing world".

"The publication of the biofuels obligation will be tied in with negotiations and discussions about biofuel targets that are taking place at a European level," she said.

The move reflects a concern in the EU that there is not enough available land to grow plants for the 10 per cent biofuel target, while importing oil from outside the union would have a direct impact on food prices in the developing world. The European Environment Agency also said that using the oil for transport was not as effective as running the transport on more environmentally friendly systems, like electricity.