Farmers were promised Government support yesterday in helping to build a bio-energy sector in Ireland, but were warned that they must proceed with care.
Minister for Finance Brian Cowen told the first major farming conference on bio-energy crops that growth in the area would need to be sustainable.
It was important that supply matched demand so that the industry was not damaged in its infancy, he told 300 farmers, businessmen and academics at the conference in Portlaoise.
The event was organised by the Irish Farmers' Association (IFA).
Mr Cowen said the Government recognised the importance of the urgent need to reduce dependence on fossil fuels for environmental and cost reasons.
In the recent Green Paper, Towards a Sustainable Energy Future for Ireland, the Government had set out ambitious targets, such as a 2 per cent biofuel penetration by 2008 and 5.75 per cent by 2010.
Another target was that 5 per cent of fuel used for heat purposes should be from renewable sources by 2010, of which 50 per cent would be from biomass, he said.
Mr Cowen said the Government had also targeted 30 per cent co-firing of biomass at peat-fired generating stations, and he said there was a growing interest in using biomass as a co-fuel in peat-burning electricity plants.
"The three peat-burning stations in Ireland burn a total of three million tonnes of peat and estimates suggest that 30,000 hectares of energy crops could replace 10 per cent of this peat."
On the issue of excise relief on biofuels, he said he reduced the excise when asked to do so by the Minister for Energy and in 2008, the scheme involved would deliver 163 million litres of biofuels.
Questioned from the floor about his view of a public/private venture to turn the former Carlow sugar beet plant into an ethanol-producing plant, Mr Cowen said in principle he was not opposed to public/private ventures.
He said he was aware of farmer unhappiness with the level of the EU grant for establishing biomass crops and added that Minister for Agriculture Mary Coughlan was working hard to have the level of support increased.
IFA president Pádraig Walshe said he estimated there were about 1,000 farmers in the State involved in the production of energy fuels and he said Ireland should take its lead from the US, where policy was much focused on security of supply and sustainability.