The Irish Farmers' Association (IFA) today urged the Government to take immediate action to develop a sustainable Irish bioenergy industry.
IFA president John Dillon said the rising cost of oil and strengthening US dollar created an urgent need to develop an alternative to importing expensive fossil fuels.
"An exemption from excise and tax incentives are crucial if the Government is serious about reducing our dependence on imported fossil fuels and meeting our targets under the EU Biofuels directive and the Kyoto Protocol," he said.
"Farmers need a more sustainable and stable outlet for their crops into the future and are prepared to grow dedicated energy crops for the purpose of biofuel production.
"However they can only switch to biofuel production, if the price they receive for the raw material provides sufficient margin to make it viable," he said.
Biofuels can be made from oilseed rape, beet, recovered vegetable oil and tallow, and can provide an alternative to diesel and petrol.
Mr Dillon said Irish agriculture could be part of the solution in the current debate on how to decrease greenhouse gas emissions.
"It has already contributed carbon credits through increased forestry and reduced livestock numbers," he said. "There are significant benefits to the environment as biofuel is carbon neutral.
"We have enough suitable farmland in Ireland to provide a significant contribution to our national biofuel requirements," he said.