The Government's announcement of excise relief for a limited number of biofuel projects will make alternative vehicle fuels available to motorists for little more than half the cost of petrol and diesel.
Biofuel is used by vehicles ranging from private cars to haulage vehicles and even a fleet of vans used by Cork City Council.
Up until now, the addition of excise duty at 36.81 cent per litre for diesel replacement fuels and 44.36 cent for petrol replacements, plus the cost of engine modifications for many vehicles, made the use of biofuels uneconomic for all but very heavy users.
But this week, the Government, bowing to pressure from the European Union to increase the amount of biofuels in use, announced excise relief on 16 million litres of biofuels over the next two years, for eight individual biofuel projects across the State.
The move means rapeseed oil for use as a diesel replacement fuel is now available at 62 cent a litre without the imposition of excise duty.
In handing out exemptions, Minister for Natural Resources Noel Dempsey was selective in his choice of producers and processors. The eight companies were:
Eilish Oils in Newtownmountkennedy in Co Wicklow, which pioneered biofuel development in Ireland and sells pure plant oil;
Biogreen in Co Wexford, which is also developing a replacement for diesel fuel for central heating in addition to fuel for vehicles;
Kilkenny Cereals of Goresbridge, which produces pure plant oil from rapeseed;
Donegal Farm Services, which intends to produce pure plant oil from seeds grown on both sides of the Border;
Conco Phillips, a company which intends to blend biofuel with diesel at its Whitegate refinery in Co Cork;
Greyhound Recycling in Co Meath, which is involved in the collection of recovered vegetable oil from the industrial and commercial sector;
Eco Ola in Galway, which will sell recovered vegetable oil;
Maxol Ltd of Dublin, which will produce bioethanol from a milk derivative.
In the bioethanol category, Maxol will test bioethanol made from a milk derivative in regular vehicles and 20 flexible-fuel vehicles manufactured by Ford. The company also plans to set up between 10 and 50 bioethanol filling stations in Ireland.
The changes have been broadly welcomed by the biofuel industry and importers of the engine conversion kits for diesel cars.
Peter O'Neill and Allen Holman of Gorey, Co Wexford, have set up a business importing and fitting conversion kits from Germany through their business Deutsches Auto Services. Mr O'Neill said the announcement was "a welcome development" and he predicted the volume of biofuel used in Irish vehicles would rise once drivers acquired the correct conversion kit and fuel oils to prevent engine damage or loss of power.
