Fuel groups must have 4% biofuels in annual sales

 

COMPANIES IN the fuel industry will be compelled to have 4 per cent of sales in biofuels under a new environmental regulation to be announced today by the Government.

Minister for Energy Eamon Ryan will announce that the Government has approved a biofuels obligation, a year later than originally envisaged. From July 2010, fuel suppliers will have to include an average of 4 per cent biofuels in their annual sales.

There will be a requirement that the biofuels used by oil companies must produce 35 per cent less greenhouse gases than fossil fuel. Biofuels include bioethanol, which is derived from plants such as sugar maize and miscanthus, and biodiesel derived from vegetable and animal oils. The sources are either renewable, or from waste products, and therefore result in fewer greenhouse emissions.

One of the reasons the announcement has been delayed arises from the controversy relating to food shortages in the developing world during early 2008. Some were blamed on biofuels. It was argued that crops traditionally grown for food was being diverted to fuel, leading to increases in prices and subsequent shortages. The basis for the direct link between food shortages and biofuels has since been questioned in some quarters.

However, during the early months of 2008, several European countries, including Britain, called for a review of the EU target of 10 per cent mix of biofuels in petrol and diesel consumption by 2020.

The latest directive of the European Parliament and the Council from April 2009 states that the target must remain unchanged. However, it maintains that it is essential to develop sustainable second-generation biofuels that do not affect food supply.

Mr Ryan is expected to argue today that the introduction of the 4 per cent obligation is necessary to help reduce carbon emissions but also to increase energy security in Ireland. However, the Government has acknowledged that biofuels only provide part of the solution and the bulk of it will have to be imported.

It is estimated that approximately 30 per cent of biofuels used in Ireland is produced by Irish companies. However, with a 4 per cent obligation, the volume of biofuels being used will increase dramatically, with most of it being sourced abroad.

The department has said it hopes the obligation will provide an impetus for increased biofuels production in Ireland.

The 4 per cent figure is a downward revision of targets set by the Government in early 2007 for biofuels to represent 5.75 per cent of the fuel mix by 2009. Mr Ryan has consistently said he is intent on introducing mechanisms that will ensure Ireland reaches the target of biofuels comprising 10 per cent of all transport fuels by 2020.

Last week, the Fine Gael MEP Maireád McGuinness warned of the consequences of the Government reducing its ambition on renewable energy, and criticised the delays and lowering of targets.

She said that Ireland had the land and the technology but that the industry needed to be supported now or else the country would be left behind.

She instanced pure plant oil which, she said, had the potential to replace up to 4 per cent of all diesel used for vehicles.

She said that consumers would be willing to switch to pure plant oil if the price was below that of diesel.