The Irish Bioenergy Association (IrBEA) broadly welcomes any legislation which leads to increased displacement of fossil fuel with biofuel. We do have serious concerns about the scheme and call on the government to amend the proposed biofuels obligation to allow Irish biofuel producers access the market.

"The scheme will be very inaccessible for Irish producers of biofuel. It forces producers to sell biofuel certificates to the oil industry, and there is no confidence these certificates will be worth anything. The easy short-term option for oil companies is to import biofuels" according to IrBEA President, Tom Bruton. A similar scheme in the UK has lead to 89% of biofuels in that market being imported, primarily from Brazil, Argentina and the USA.

The consumer is going to pay for the proposed biofuel obligation scheme through a higher cost of about 1c/litre on petrol and diesel at the pump, based on current oil prices.

The government will administer the scheme and has set a maximum price for biofuel certificates generated by the scheme. Experience in the UK has shown that there is no liquid market for these certificates. They currently trade at 6p/litre which is not sufficient to support biofuel production in Ireland or the UK.

We are requesting the government that NORA, the agency that will administer the scheme be empowered to buy certificates directly from biofuel producers, to create some liquidity and certainty for Irish biofuel producers. This is the only way within the current policy to support a base of biofuel manufacturing in Ireland, generating additional jobs and economic activity. We need to move away from our 99% dependency on imported fuels for road transport. Our estimates indicate that meeting this biofuel obligation from Irish production will lead to €170m in direct economic activity and the creation of approximately 1,700 jobs.
If you would like to see the full details of the Energy Minister Eamon Ryan announcement please go to the link below: http://www.dcenr.gov.ie/Press+Releases/Minister+Ryan+announces+new+biofuels+obligation+
for+Irish+fuel+industry.htm

Further info:

Contact IrBEA President, Tom Bruton   087 9381882 or
IrBEA Secretary, Tom Walsh 087 1222492       
Notes and background:

Biofuel in Ireland So Far

• Since 2006 a limited amount of biofuel has been supplied and supported using an excise relief scheme
• 70% of biofuel supplied in Ireland to-date has been imported
• The existing scheme led to about 2% of the road fuel market being serviced by biofuel (82 million litres in 2008)
• The producers of biofuel in Ireland are generally modest scale, with a very positive environmental impact, and will easily meet the 35% GHG reduction specified in the new scheme
• The handful of Irish producers are rural industries supporting agricultural and manufacturing jobs in the Irish economy

Mechanics of the new scheme and consumer impact

• Each litre of road fuel that enters the Irish market will receive a certificate. There is an upper limit of 40c/litre on the price of a certificate
• There is no lower limit on the price of a certificate
• Biofuels will now have to pay excise duty of 37 c/l, as do fossil fuels
• About 40% of the oil market is exempted from the scheme. Air travel, agri, marine, industrial, heating is left out
• The scheme is paid for by road fuel consumers... trucks, vans and cars. If a biofuel certificate is worth 20c/litre, it would add 0.8 cent to the price of a litre of diesel or petrol at the pump.
• We currently pay NORA 2c/l on road transport fuel to hold emergency oil stocks for us

Learnings of the UK scheme

• A similar scheme in the UK has led to 89% import of biofuels supplied to the UK (mostly from Brazil, US and Argentina)
• In the UK, certificates were worthless in the first year of trading (2008) and currently trade at 6p/litre
• This level is not sufficient to make production of biofuels in Ireland (or the UK) competitive
• 2/3rd of Irish fuel comes through UK ports. The UK has a 3.5% obligation, so there is a strong likelihood that biofuel blends will be mixed in UK ports and supplied to the Irish market

What we should do

• The scheme will be very inaccessible for the Irish producers of biofuel. It forces Irish producers to sell certificates to the oil industry. There is no confidence these certificates will be worth anything, and it seems the easy short-term option is for oil companies to import biofuel.
• We believe the government should commit to buy biofuel certificates from producers of biofuel. NORA, the agency that will administer the scheme should buy certificates directly from Irish suppliers to give some liquidity and confidence in the scheme. This is the only way within the current policy to support a base of biofuel manufacturing in Ireland
• In a small oil market like Ireland, we have the opportunity to be more ambitious than 4% biofuels. We have a 10% target for 2020, and we see no commitment to move towards this target in the near-term.
• We made a number of other suggestions in our submission to government in November 2008

About the Irish Bioenergy Association (IrBEA)

IrBEA was founded in May 1999. It's role is to promote the bioenergy industry and to develop this important sector on the Island of Ireland. The overall aim of IrBEA is to promote biomass as an environmentally, economically and socially sustainable indigenous energy resource, and also to promote its non-energy related benefits.

The objectives of the IrBEA are to:

• Improve public awareness of biomass as a realistic option for energy supply
• Influence policy makers to promote the development of bioenergy
• Promote the implementation of bioenergy projects
• Networking and information sharing among those interested in bioenergy development
• Promote the interests of its members
• Liaise with similar interest groups