The Government can save the Carlow sugar factory by making it the heart of the bioethanol industry, writes Mary White, spokesperson on agriculture for the Green Party
Carlow is in shock. News that the sugar factory in the town is to close has sent an economic chill through the county. In anticipation of forecasted EU changes to "sugar regime" subsidies in 2006, Greencore has decided to close the Carlow plant on March 11th as part of a rationalisation plan. Over 300 jobs will be lost and about 19,000 farmers will lose a market for their crops.
For more than 80 years the factory has been a feature of the skyline on the banks of the River Barrow. Its great hulking shape dominated the landscape and its well-known "aroma" pervaded the town at the time of the beet campaign.
The understandable anger felt by local people is matched only by the incredulity of commentators from a commercial background, who see closure of the factory as a serious waste of shareholders' funds and an apparent missed revenue opportunity on the part of the Greencore management.
All over Europe and North America, biofuel plants are being built to help meet an increasing demand for these products internationally.
Greencore and the people of the town have a unique opportunity to convert the Carlow premises into a biofuel plant, producing ethanol, which can be used as a mix with petrol.
Apart from the economic and employment benefits, ethanol helps to curb greenhouse gases. When sugar beet is used as a source of bioethanol, harmful CO2 emissions can be cut by a whopping 55 per cent in comparison to traditional fuels.
On May 8th, 2003, the European Council and European Parliament agreed the Biofuels Directive, yet so far the Government has made no real attempt to meet Ireland's mandatory biofuel targets, which have been set at 2 per cent of all transport fuel needs by 2005 and 5.75 per cent by 2010.
A number of EU countries have since used the opportunity to largely exempt their biodiesel and bioethanol fuels from energy taxes. Ireland, however, only allows excise duty exemptions on certain approved pilot projects. As a result of this, the biofuel industry in Ireland cannot compete against heavily-subsidised imported fossil fuels.
This compounds Ireland's failure to meet its Kyoto Protocol targets. The recent announcement that the Government is to spend €35 million a year between 2008 and 2010 buying carbon credits from compliant countries shows the scale of our problem. This €35 million, if translated into excise reductions on biofuel, would be sufficient to subsidise the production of more than 120 million litres of biofuel each year in Ireland.
So how might the Carlow plant be turned around?
The modification of the factory is feasible, given that it is lacking only a fermentation plant. Previous proposals for the production of ethanol by Greencore have been turned down by the Department of Finance. However, a lifting of excise duty on biofuels, in line with the EU directive, together with initial support for conversion of the factory, would be a start. How much would the Government pay a foreign multinational to create 300 jobs in any other sector of the economy?
Governments do not have to be "green" to implement such a policy. Even the Bush administration is proposing big increases in the 3.1 billion gallons of bioethanol which is mixed into petrol for use in cars in the US. Gas-guzzling SUVs there are running on ethanol right now.
Carlow can produce half of the national quota of sugar in a 12-week campaign period. Thus it could deliver approximately 1.7 per cent of our national petrol consumption, or 0.72 per cent of our transport fuels. This would amount to about one-third of the EU target. And, with refining facilities, Carlow could probably lift this to fully half of our national target on biofuels, boosting Greencore's profits and contributing huge knock-on benefits to the local economy on a long-term, sustainable basis.
It is worth noting that, using other agricultural feedstocks, the Carlow plant could operate for most of the year and would probably be able to meet our entire national biofuel target. This would be of enormous benefit to the rural economy.
Consider that 660,000 tonnes of sugar beet, coming from 19,000 growers, is processed by the Carlow factory each year, with the Government receiving 4.8 per cent VAT on the beet. An annual outlay of €3.5 million has been paid to hauliers. On top of this, the wages of 320 workers and their taxes contribute to the local and national economies. A large number of ancillary jobs in manufacturing and engineering have also been created over the years.
All of this can be secured by bioethanol.
If the Government gave the same level of support to biofuels as is provided in other EU countries, Carlow could be at the cutting edge of a new industry. In an environment such as this, farmers and business interests would find it economically viable to produce transport and heating fuels, generating huge employment in this sector, particularly in disadvantaged areas. More than enough suitable agricultural land exists to meet both the remaining sugar quota and the additional needs of a growing biofuel industry in Carlow and elsewhere.
A few simple acts on the part of the Government could put the Carlow sugar factory at the heart of the bioethanol industry, turning the second-smallest county in Ireland into a giant in the renewable energy sector.
Councillor Mary White is deputy leader of the Green Party and its agriculture, food and rural development spokesperson