Suppliers argue that Minister for Transport Darragh O’Brien risks overstepping the mark if he curbs imports of some green transport fuel on the back of fears over fraud.
Mr O’Brien recently ended an extra incentive for the use of processed palm oil mill effluent (pome) as biofuel after the National Oil Reserves Agency conceded that production in some Far Eastern countries was high enough to spark concerns about fraud.
Biofuel producers here and in Europe have been warning that exporters in the Far East are labelling actual palm oil, which the European Union does not classify as a renewable fuel, as pome. This allows them sell huge quantities of fraudulently labelled palm oil cheaply, undercutting European producers who play by the rules.
Pome is the waste produced from manufacturing palm oil. The EU allows its use as biofuel, which means it benefits from incentives to encourage green road transport fuel in member states.
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The Republic obliges suppliers to ensure that up to 25 per cent of the petrol and diesel they sell is renewable. However, up to this month, this obligation fell by a third if they used pome, making it a cheaper option for oil companies.
Mr O’Brien ended this incentive at the beginning of the month and has not ruled out imposing a limit on pome imports. That is a step that industry body, Fuels for Ireland, says would go too far.
Kevin McPartland, the organisation’s chief executive, argues that the problem lies not with pome, but with enforcement at both European Union and national level.
The Government should wait for a new EU biofuel database, due shortly, that will allow greater scrutiny of companies producing pome and other green fuels manufactured from waste, he argues.
However, while European producers say the database is a step in the right direction, they maintain that the risk of fraud is now so high that curbs may ultimately be the only way of tackling the problem.
Whether or not Mr O’Brien curbs imports, it looks like he will face a row with one or other element of the State’s fuel industry.