The State has been asked by the European Commission to explain why it has not reached its target for bio-fuel crops and could face fines from October if it cannot explain its inaction, a conference in Kildare heard yesterday.
Paul Hodson of the energy and transport directorate general of the commission, told the IFA Renewable Energy Conference that the Republic had set its own target under the bio-fuels directive at 0.06 per cent by the end of 2005.
"Because it did not go for 2.0 per cent and because of that it has to explain why. Ireland is one of seven countries where we took the view we were not certain that the explanations given were adequate," he said.
He said the commission had written to the Government explaining this situation on July 6th. The State had three months to reply and the commission would look at the position again.
"If we are happy with the reply that is the end of it. If we are not, we then go to the next stage and give a considered opinion on whether or not Ireland is in breach of the law," he said.
Over 400 farmers and others from the industry attended the conference which was told by Minister for Agriculture and Food Mary Coughlan that there was no "magic bullet" solution to the problems facing farms producing alternative energy .
She said interest in bio-fuels development had grown dramatically since the Finance Act set up its first scheme when a total of 34 applications were received for excise duty relief on fuels produced from crops. Decisions were expected on these soon.
She said a second scheme would probably be established.
Although most of the speakers on the platform and from the floor said the key to making the growing of crops for fuel profitable was providing a rebate on excise duties, the Minister said that leaving aside that issue and even allowing for an increase in the price of oil to $60 a barrel, bio-diesel from rapeseed and bio-ethanol from sugar beet remained about twice as costly to produce than diesel. She said bio-ethanol from wheat was slightly more competitive.
She said she expected that oilseed rape for bio-diesel offered the best prospect in the liquid bio-fuels area as it was used in conjunction with tallow or recovered vegetable oils.
She said there was also the possibility that meat and bone meal could be utilised for energy purposes and this would be most welcome.