Farm Ireland

Friday 20 April 2018

Renewable crops could save country from EU fine

Ireland must support the growing of bio-energy crops such as Miscanthus
Ireland must support the growing of bio-energy crops such as Miscanthus
Declan O'Brien

Declan O'Brien

Ireland must support the growing of bio-energy crops such as miscanthus and willow to avoid annual EU fines of up to €95m.

Paddy O'Toole of Quinns of Baltinglass warned that the State was likely to miss challenging EU renewable energy targets and faced massive penalties from Brussels as a consequence.

He said growing crops such as miscanthus could, however, offset EU fines while delivering a margin to farmers of €500/ha, which is comparable to the tillage sector.

Mr O'Toole called on the Minister for Communications, Climate Action and Environment, Denis Naughten, to immediately introduce and implement an incentive scheme which encourages the changeover from gas oil to renewable energy fuels such as miscanthus.

Based on expert analysis Ireland faces annual fines of over €95m if the State fails to deliver 16pc of its heat, transport and electricity needs from renewable energy sources by 2020.

At a recent Teagasc bio-energy conference it was predicted by SEAI that Ireland would miss this 16pc cut-off, with a resultant penalty of between €65m to €130m imposed by the EU for every 1pc the State is below the target.

The overall 16pc target is comprised of three individual targets for electricity, transport and heat.

The renewable threshold for heat is 12pc, and Barry Caslin of Teagasc, described this as the "hardest nut to crack".

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"The shortfall to achieving 12pc renewable heat target is estimated by SEAI to be 1-2pc of the overall national target of a 16pc cut," Mr Caslin explained.

Ireland could opt instead to purchase carbon credits on the international markets to offset any potential fine.

However, Mr Caslin said massive benefits were possible if the potential value of the fine were used to develop supply chain mechanisms around renewable energy crops.

"This fine could be offset by using 560,000t of miscanthus," he explained.

Paddy O'Toole of Quinns in Baltinglass claimed that 4,000ha of miscanthus could realistically result in a €50m reduction in EU fines.

He said Quinns currently had 9,000t of miscanthus in big bales stored across the southeast, which if used instead of oil would reduce any penalty imposed on Ireland by around €4m.

Bord na Mona recently informed Quinns that Edenderry Power Station would no longer use miscanthus as a replacement for peat. However, Mr O'Toole pointed out that a number of businesses in the southeast were successfully using the crop as a fuel source.

Growers are currently paid €60/t for miscanthus. With 12.5t/ha possible on good ground, this gives a potential income of €750/ha. Sprays, fertiliser and establishment costs spread over 10 years (allowing for an initial grant of €1,300/ha) come to around €250/ha, leaving a margin of €500/ha.

However, Mr O'Toole said a subsidy of 4c/kWh would put a value of €100/t on miscanthus for the grower.

It would also make sense for the Government, he argued, as a 4,000ha crop producing 12.5t/ha annually would cost €5m per year but potentially save the State €22m a year in fines.

He added that any subsidy regime should ensure that smaller heating units used in the pig, poultry and mushroom sectors also qualified for aid.

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