Irish biofuel industry still facing tough environment

New biofuels grants were announced in the Budget, but many believe more supports are needed if the industry is to thrive, writes Ciarán Brennan

For the past two budgets miscanthus and willow have made it into Brian Cowen's speech, a clear indication that the day of energy crops and biofuels may finally have arrived.

In the Budget, Mr Cowen announced that establishment grants will be introduced for willow and miscanthus. He also announced a national top-up of €80 per hectare, in addition to the existing EU premium of €45 per hectare and grant aid for the purchase of expensive, specialised harvesting machinery.

The Minister's initiative received a positive response from industry players, including NTR biofuel subsidiary Bioverda.

The State's agricultural and food development authority, Teagasc, described the measures as a step in the right direction, but questioned the amount of money being set aside in meeting the schemes' potential high demand.

It is something the Government should be aware of given its experience with the greener homes scheme this year, in which grants for wood pellet burners led to a surge in demand that outstripped supply, a situation made all the more embarrassing by the fact that the Republic had no indigenous supplier of the fuel.

That has led to fears of similar problems happening with other biofuels.

Despite the welcome for the measures, the Budget initiatives have been criticised in some quarters as too little, too late.

Sufficient suitable agricultural land exists to meet the additional needs of a growing biofuel industry in Ireland, but without exemptions the industry cannot compete against heavily subsidised imported fossil fuels, according to the Green Party.

"A number of countries have exempted their bio-diesel and bio-ethanol fuels from energy taxes. Ireland only allows excise duty exemptions on targeted pilot projects," said the party's bio-fuels spokeswoman, Mary White.

Jerry Murphy, a professor in sustainable energy and environmental engineering in UCC, agrees that the business conditions are not right for establishing a biofuel industry in Ireland and says more incentives are needed to match what is happening in other countries, while the planning process for biofuel plants will have to simplified.

"There are various businesses and entrepreneurs that would be very happy to make investments but the business climate is not strong enough. If you have a large source of money and you want to invest it, you will find better ways of making a return than trying to play around with getting planning, going past An Bord Pleanála, getting past a judicial review and then trying to get excise duty from a government, which you may or may not get," he said.

A starting point would be the complete removal of excise duties for a period of 10 years for producers until we reach the EU target level of 5.75 per cent, he said.

But some are taking the plunge nonetheless. Bioverda is investing €50 million building a vegetable-oil-based biodiesel refinery in the port of Cork. This is evidence that a viable biofuel industry is not some sort of utopian pipe dream, said Mr Murphy. In fact, the climate here makes growing biofuel crops easier than in some countries, such as Sweden, which are years ahead of us in the field.

Support from government, local authorities and state transport companies, combined with the complete removal of excise duty on biofuels has led to a vibrant biofuel industry in Sweden, according to Mr Murphy.

He cites the example of Linkoping, a city of 120,000 people, where abattoir waste from slaughtered cattle is used to run 65 buses, 600 cars, a train and 10 waste collection lorries.

A key issue in Ireland is lack of joined-up thinking, according to Teagasc energy system specialist Barry Caslin.

Farmers who want to grow energy crops have to deal with too many Government departments, he said.

Mr Caslin suggests setting up an independent body to deal with biofuels - along the lines of the UK's Bio-energy Infrastructure Scheme - to assist farmers, foresters and businesses to develop the infrastructure required to harvest, store, process and supply biomass to energy end-users.

Another stumbling block is that energy crops are land-hungry. The EU estimates that 20 per cent of all agricultural land in Europe will be required to meet its 2010 target of 5.75 per cent of all transport running on biofuel.

But Mr Murphy argues this is because the EU estimates are based on rapeseed, which he says is an inefficient crop for generating biofuels. Some 24 hectares of rapeseed are required to run one city bus, but crop rotation means rapeseed can be grown for only one year in five.

"You would have to contract a farm of 120 hectares to get one bus powered by rapeseed. Grass or silage offers a far better return, needing only a seven hectare farm to run the same bus. So you have gone from a 120 hectare farm of rapeseed to a seven hectare farm on grass," he said.

Nevertheless, biofuels are unlikely to be the sole answer to Ireland's energy problems. We import 11 million litres of oil a day, whereas the entire farm land in Ireland would generate around 90 million litres in a year. Transferring huge quantities of land over to energy crops raises big questions about the environmental impact on flora and fauna and the landscape, says Mr Cassin.

But Ms White, who has raised the idea of putting a bio-ethanol plant on Greencore's former sugar factory site in Carlow, argues that biofuels should not regarded as some kind of energy nirvana, but a contributor towards reducing dependency on fossil fuels and carbon emissions.

"I can't see anybody turning over all their tillage land for fuel crops. We're never going to have enough to power the country, but for instance Carlow could run 60,000 cars locally on ethanol which would reduce greenhouse gas emissions."

Jerry Murphy sees no reason why it cannot happen in Carlow and elsewhere in the country. "It can be done. If there was someone at the Cabinet table that wanted a biofuel industry, it can be done. But it's not the main issue at the Cabinet table."