Ireland’s energy crops at a cross-roads
Achieving success in growing energy crops on Irish farms is at a cross-roads. While the significant potential for expansion exists, the absence of adequate incentives and more importantly, sustainable markets could effectively kill off the entire sector.
This is according to Larry O’Reilly, chairman of the Teagasc Tillage Stakeholder Consultative Group.
There are many very good reasons to embrace energy crops, O’Reilly explained: “On the wider scale we need to tackle climate change by reducing the level of greenhouse gases in the earth’s atmosphere. At a national level we need to improve our energy security by reducing our independence on imported fossil fuels. At farm level, an investment in renewable energy can both reduce the high cost of energy inputs and provide an additional source of income for the business.”
A report, entitled ‘Achieving the Potential for Growing Energy Crops on Irish Farms’, was published this month by the Teagasc Tillage Stakeholder Consultative Group. It was drawn up from the Tillage Sector Development Plan, where it identified considerable potential for expansion in cereals, oilseed rape, energy crops and some potential in potatoes.
The Teagasc Stakeholder Consultative Group consists of representatives from the Irish Bio-energy Association, the Department of Agriculture, Bord na Mona, the IFA, Biotricity among others.
“If all the potential increases in the various crops were achieved, the area under crops could increase by 221,000 hectares, and the production of tillage crops could increase by 1.14 million tonnes,” it found.
According to the skakeholder group, Irish agriculture is capable of playing a major role in the generation of electricity, providing fuel for heating and transport from renewables and achieving Government 2020 targets. Ireland has, however, been slow to embrace energy crops as a potential solid biofuel resource, it said.
The report found there are more than 3,000 hectares of energy crops planted in Ireland but much of this is currently without a market for several reasons, including proposed projects failing to either get planning consent or financial backing.
It explained further: “Teagasc estimates that during 2013 almost 500 hectares of miscanthus have been removed alone. Nevertheless, the Government is committed to producing 16 per cent of our total final energy consumption from renewables, which include a renewable heat sub-target of 12 per cent from renewable sources by 2020.”
According to the skakeholder group, there is an urgent need for long-term sustainable markets for energy crops.
They explained: “Bioenergy can and should play a major role in meeting national energy goals for 2020, but also in looking towards further decarbonisation of the economy post-2020.
Farmers are unlikely to plant large areas of energy crops unless the venture is economically attractive.
The report continued: “This is even more critical in terms of increasing prices for milk and beef competing sectors. It is incumbent on Government and farming leadership to create the economic environment to incentivise farmers to play their part in achieving 2020 targets.”
In addition, the report highlighted that the Irish tax system needs to change to recognise the importance of energy crops.
“If the expansion of energy crops is ever to take place in this country our tax system will need to recognise the benefits if the desired level of expansion is to occur.”
The group also made a comparison between energy crops and commercial forestry, where it highlighted differences.
For example: “In Ireland any forestry managed on a commercial basis is exempt from income taxes for individual or corporations. Since 2007 the exemption has been restricted for individuals. It is now limited to €80,000 per person per annum assuming total income exceeds €125,000 for that person. – The revenue from energy crops is subject to income tax at either 20 per cent or 41 per cent whichever is relevant.”
In addition, the stakeholder group is calling on grant aid be provided to propagators of energy crop planting stocks, enabling them to multiply stocks with less financial risk and achieve greater economies of scale, which ultimately will lead to lower establishment costs.