Oil price crisis? What crisis? Minister for Finance Brian Cowen has absolved a select few from paying excise duty on their motor fuels. Tim O'Brien is now one of them
My credentials for running a car on vegetable oil are impeccable: I write on environmental issues, I have admitted certain views about the nature of global warming, and my home in Wicklow was once a hippy commune. But there is also a touch of the Eddie Hobbs about this: I no longer pay excise duty to the Government on fuel for my car. I should stress this is entirely legal and I am doing this with the full consent of Minister for Finance Brian Cowen.
Up until recently, excise duty on petrol and diesel was something we had to live with. But vehicles don't actually need fossil fuels imported from some of the most volatile regions of the world. Vehicles run just as easily on a range of vegetable oils and alternative fuels which can be sourced at home. While stories of South American cane spirit running petrol engines in Brazil abound, equally useful is rapeseed oil, which is grown and processed here in Ireland.
The trouble has been that while vegetable oil for cooking can be bought for as little as 62 cent a litre in the supermarket, when it is used as a motor fuel, excise duty must be applied, as it is for petrol and diesel.
Up until now, the addition of excise duty at 36.81 cent per litre for diesel-replacement fuels and at 44.36 cent for fuel replacing petrol - plus the cost of engine modifications for many vehicles - made the use of vegetable oils essentially uneconomic.
But two things have now changed the picture significantly. The first was the price of diesel, which has risen from an average of 95.4 cent last January to 112.8 cent last Thursday, according to AA figures.
The second was Cowen's decision to bow to pressure from Europe and exempt a limited - too small - amount of biofuel projects from excise duty. This is a significant drop, bringing the cost of vegetable fuels to a little more than 70 cent a litre including Vat.
The attraction to fleet owners and couriers is obvious, but for private motorists the savings still depend on a personal calculation. Diesel engines should be converted to run on vegetable oil, and this costs from about €1,700. On that basis, you have to do a fair bit of mileage and keep your car a few years to make it cost effective.
Typical savings of about €25 per tank on a mid-size diesel car can translate to €25 per week for those who do high mileage. But it still takes about 17 months to break even. Once converted, the vehicle can run on either vegetable oil or diesel, or any mixture of both. (Petrol cars can be converted to use bioethanol but this industry is even more in its infancy.)
On a recent run to Roscommon, I fancied pulling into Lidl on the Mullingar bypass to top up with cooking oil at 62 cent a litre. However, Peter O'Neill and his business partner Allen Holman of ecocar.ie, who converted my diesel VW Passat, advise against supermarket oil in case additives result in a drop in power. O'Neill recommends pure plant oil (PPO), which is produced in Ireland, costs 75 cent a litre and is available from Eilish Oils, one of the excise-exempt suppliers. He also reminds me that Lidl is not an excise-exempt producer and so the duty on each litre should be forwarded to the Department of Finance.
O'Neill and Holman imported the conversion kit from the Elsbett company in Germany which needed to know my engine numbers before it would supply a guaranteed kit.
There are no official countrywide figures yet for the number of converted cars, but ecocar.ie has converted 12 private cars since the Minister's announcement in August.
Test conditions using pure plant oil have shown no drop in power and - surprisingly - a slight increase in miles per litre. Excise-duty exempt producers include operations in Wicklow, Wexford, Kilkenny, Donegal, Cork, Meath, Galway and Dublin but a network of suppliers is not yet in place. For many having a vehicle running on vegetable oil would mean having their own tank at home from which to fill the car. That will change, however, as Ireland moves into line with the European Directive on the biofuel industry. This requires Ireland to source two per cent of its vehicle fuels from renewable sources by the end of this year, moving to just under six per cent by 2010 and 20 per cent by 2020. The Minister's latest absolution on excise duty brings Ireland to 0.1 per cent.
It looks like it's an open road for our fledgling biofuel industry.
Useful websites: www.ecocar.ie; www.dcmnr.gov.ie; www.eilishoils.com
Driving on vegetable oil The pros and cons
PROS:
1. It is cheap. Pure Plant Oil (PPO) costs about 75 cent a litre including Vat, from excise-exempt producers.
2. It is biodegradable.
3. PPO delivers the same performance power and mileage as diesel.
4. It is a natural lubricant - better for your engine and environmentally more friendly than diesel as the plants from which it comes from consume carbon as they grow.
5. It doesn't smell as bad as a diesel engine.
6. It is grown in Ireland. No need to go to war for it.
7. You can bring a kit with you to your next car.
CONS:
1. The supply network is not yet developed.
2. Your engine should be converted.
3. Only 16 million litres have been exempt from duty.
4. In brand new cars the conversion may invalidate the manufacturer's warranty.
5. Exhaust fumes smell like a chipper.
6. If you buy in the supermarket you must forward the duty to the Minister for Finance.
7. You will need to keep the car for a few years to pay for the conversion.