OPEC sheikhs, Texan oil barons and Co Cork farmers usually don't have much in common. Yet as farmers gather for the National Ploughing Championships there are signs that they could hold some of the answers to growing concerns over rising fuel prices, writes Michael McAleer
As Maxol opened the first bioethanol pump outside Sweden, with prices for its E85 fuel 25 cent less than a litre of unleaded, Ford yesterday introduced its new Focus Flexi-Fuel Vehicles (FFVs) to Ireland.
This particular Focus is powered by a 1.8-litre which runs on any mixture of petrol and bioethanol, which is distilled either from crops like sugar cane or wheat, or in the Irish case from whey, a by-product of cows' milk. The ethanol for Maxol's offering is sourced in Carberys, Co Cork.
The fuel, a mixture of 85 per cent ethanol and 15 per cent regular unleaded, is only on sale at Winfield Motors in Sandymount, but further Maxol forecourts will offer it as more cars go on sale.
The Focus FFV will go on sale in the autumn with price dependent on whether the Minister for Finance grants it the same 50 per cent VRT rebate that's on offer to petrol-electric hybrids like the Toyota Prius. With the rebate, the Focus will go on sale for €20,000 in five-door saloon and estate versions. Without it prices are likely to be in the region of €24,000.
Given its lower CO2 emissions and Ireland's need to meet EU targets for the use of biofuels, Ford has a strong case. The European Directive on the biofuel industry requires Ireland to source 2 per cent of its vehicle fuels from renewable sources by the end of this year, moving to just under 6 per cent by 2010, and 20 per cent by 2020.
Counting against it is the fact that the car can run just as well on normal unleaded, thereby offering motorists the chance to avail of the VRT rebate but return to ordinary motoring.
A further potential limit to the success of bioethanol here is the relatively high production costs of ethanol. These are currently offset by the exemption from excise duty under a pilot scheme.
However, the exemption is limited to just 2 million litres of ethanol for mixing with petrol. At present Irish motorists use 2,000 million litres of petrol per annum.
"If biofuels are to be successful, the Government must replace its pilot scheme with a proper derogation," says Noel McMullan, director of Maxol.
The FFV is powered by Ford's regular 1.8-litre petrol engine, only with reinforced valves, as ethanol burns at a higher temperature to normal petrol.
There's only the slightest difference in power output, though fuel economy is 30 per cent less than on the normal 1.8-litre version.
Speaking at the launch, Minister Roche said moves towards ethanol use not only helps us meet EU targets but could offer three potential benefits. "It's a win for consumers who benefit from cheaper fuel, a win for agriculture which can now develop interests in ethanol production and a win for the economy in that it could potentially reduce our imports." He wouldn't comment on moves by his ministerial colleague on the VRT rebate.
Sugar beet is arguably Ireland's best source of ethanol and the introduction of the biofuel to forecourts will increase calls for the defunct sugar factory in Carlow to be turned into a fuel refinery. However, the major ethanol exporter globally is Brazil, which can produce it from sugar cane at a much cheaper rate.
Maxol will also introduce a new E5 fuel later this year, comprising 5 per cent ethanol and 95 per cent regular unleaded. This can be used by all petrol-powered cars without risk to warranty and will be slightly cheaper than regular unleaded. Such levels of ethanol is nothing new to older Irish motorists, as it used to be added to all petrol before we joined the EEC.
Perhaps in the near future Irish motorists will be paying as much attention to crop prices as the cost of a barrel of oil. And as one fuel industry spokesperson said at the launch: "While there might be hard-bargaining dealing with Irish farmers, it's not as bad as dealing with the Arabs."
Much depends on Government decisions regarding excise exemptions for biofuels and a VRT rebate on vehicles powered by them.