Minister Noel Dempsey, TD, invites applications for Mineral Oil Tax (MOT) relief for pilot biofuels projects introduced by Section 50 of the Finance Act 2004, in the following categories:

Pure plant oil
Biodiesel or other biofuel which is blended with mineral diesel such that the blend complies with diesel standard EN 590
Bioethanol that is blended with petrol and used in standard petrol vehicle engines.
MOT relief will be awarded through a competitive tendering process.

Applications should be made to the Biofuels Mineral Oil Tax Relief Scheme, Sustainable Energy Division, Department of Communications, Marine and Natural Resources, 29-31 Adelaide Road, Dublin 2, Ireland. For further enquiries, please contact geraldine.luddy@dcmnr.gov.ie

Biofuels Mineral Oil Tax Information Note

Appendix 1 - Revenue Commissioners Requirements 148 KB
Appendix 2 - Scheme Monitoring Document 156 KB

1. Introduction

Section 98A of the Finance Act 1999, as inserted by section 50 of the Finance Act 2004, allows the Minister for Finance to apply a relief from Mineral Oil Tax (MOT) to biofuels essential to a pilot project which is designed either to produce biofuel or to test the technical viability of biofuel for use as a motor fuel.

Applications for relief are invited within three distinct categories of biofuels, as detailed beneath, subject to a maximum of 8 million litres per year, costing in the region of €3m in MOT forgone on petrol / diesel displaced. MOT relief will be made by way of MOT remission by the Revenue Commissioners and will be subject to conditions imposed by them. These conditions will be additional to the requirements of Mineral Oil Tax, Alcohol Products Tax and General Excise legislation as outlined in Appendix 1.

MOT relief will be granted on a two-year basis but all projects will be subject to review on a six monthly basis, to ensure that projected standards, and production and distribution targets are being achieved, and relevant conditions are being complied with. Failure to meet these requirements may result in MOT relief being withdrawn.

Following the six monthly review of projects, or where the Minister for Communications, Marine and Natural Resources advises the Minister for Finance that the capacity targets of the overall scheme are not being reached in a given category, a further call for proposals may issue.

This is an initial measure as part of an overall policy to stimulate and support market penetration of biofuels in Ireland. An Interdepartmental Group on Biofuels is currently considering further support measures

2 Purpose of Scheme

The purpose of the Scheme is to:

pilot a programme to investigate and evaluate the market for biofuels in Ireland,
stimulate the initial development of that market,
instil consumer confidence in biofuels through the application of appropriate quality standards,
provide a basis on which future policy decisions can be made.

3 Application Process

3.1 Applications are invited by the Minister for Communications, Marine and Natural Resources (DCMNR). Applications must be delivered under sealed cover marked “Biofuels Mineral Oil Tax Relief Scheme” in printed hard copy form (not electronically). Applications shall not be accepted by the Minister after 17:00 hrs local time on 13th May 2005. Applications must be delivered by registered post. Applications will not be accepted in electronic form whether by email or in electronic media in order to ensure that the integrity of each application is beyond reproach.

3.2 Delivery of Documents

Applications (which must be delivered by registered post), must be addressed to the “Biofuels Mineral Oil Tax Relief Scheme, Sustainable Energy Division, Department of Communications, Marine and Natural Resources, 29-31 Adelaide Road, Dublin 2, Ireland” .

3.3 Project Selection

Project Selection by the Department will be undertaken according to the following broad procedures.

(i) On an appointed day after the closing date, all applications to hand shall be opened randomly and checked for compliance with the conditions of this Scheme. The appointed day will be settled after the number of applications to hand on the closing date for receipt of sealed applications is known.

(ii) Incomplete applications including applications which are subsequently found to be incomplete, or applications which are not otherwise in compliance with the terms and conditions of this Scheme shall be disqualified and returned to the applicant for stated reasons.

(iii) Compliant applications will be entered in a register consisting of the named legal entity, the category of project applied for i.e. Pure Plant Oil, Bioethanol or Biodiesel.

(iv) All applications will be assessed by a panel within DCMNR as laid out in the application procedure. This assessment will be based on the information given in this application form within the agreed parameters of the scheme. Following this assessment, recommendations will be made by the Minister for Communications, Marine and Natural Resources to the Minister for Finance for approval in line with Section 50 of the Finance Act 2004.

3.4 Conditions of Offer

It shall be a condition of any offer of a Biofuels Mineral Oil Tax Relief Scheme in this Competition that each recipient of an offer shall comply in all material respects with the terms and conditions of the Scheme as contained in this document. In the case of any material breach of these terms and conditions any such offer of Mineral Oil Tax Relief on a Biofuels Project may, at the sole discretion of the Minister for Finance, be withdrawn.

Successful applicants will be required to fulfil the Revenue Commissioners’ requirements in relation to biofuel pilot projects, within 2 months of being notified of the decision to grant MOT relief. If, within that period, an applicant is unable to satisfy the Minister for Communications, Marine and Natural Resources that those requirements have been fulfilled, the offer of MOT relief will be withdrawn by the Minister for Finance. In such an instance, the DCMNR / SEI panel will reconvene and a further recommendation will be made to the Minister for Finance, with a view to awarding MOT relief to another applicant or applicants from whom applications were received within the initial call for proposals.

Each successful applicant, in addition to the conditions imposed elsewhere, is obliged to make timely and reasonable progress to deliver its project promptly and to deal promptly with all matters under its control as set out in the Biofuels Mineral Oil Tax Relief Monitoring Requirements Document in the attached appendix 2.

If circumstances arise whereby an applicant will be unable to meet a time deadline due to circumstances beyond its control, or that of its servants or agents, and if an extension to the time deadline is required, then the applicant shall give prior written notification to the Department of Communications, Marine and Natural Resources setting out the reasons and the extended period which the applicant requires to meet the relevant obligation. The Minister for Finance may in his sole discretion if satisfied that:-

(i) the circumstances complained of have occurred, and
(ii) do not arise due to the fault of neglect of the applicant, its servants or agents, and
(iii) that the time extension sought is reasonable and realistic, and
(iv) that the obligation referred to can be reasonably shown to be achievable by the requested extended date, accede to the request to extend the time deadline (but the Minister shall not be obliged to do so and this discretionary power shall not give rise to any legitimate expectation of any kind).

4 Categories of Biofuels to be considered

The categories of biofuel projects that will be considered for MOT relief are as follows:

Pure plant oil produced from oilseed rape which is used in modified diesel vehicle engines. The maximum eligible biofuel production and use, for all projects combined in this category, is six (6) million litres in any one year. The minimum project size in this category is 50,000 litres of biofuel per year.
Biodiesel or other biofuel which is blended with mineral diesel such that the blend complies with diesel standard EN 590 . The maximum eligible biofuel production and use, for all projects combined in this category, is one (1) million litres in any one year. The minimum project size in this category is 100,000 litres of biofuel per year.
Bioethanol which is blended with petrol to a maximum of 5% (bioethanol), and used in standard petrol vehicle engines. This category also allows higher blends, up to 85%, for use in flexible fuel vehicles (FFV’s). The maximum eligible biofuel production and use, for all projects combined in this category, is one (1) million litres in any one year. The minimum project size in this category is 100,000 litres of biofuel per year, except where the fuel is to be used in a flexible fuel vehicle application where smaller limits may be considered.

5 Proposal Evaluation Criteria

Proposals will be evaluated based on the following criteria:

Criterion	Max Points
Technical excellence and quality of the proposal	20
Appropriate level of project management in terms of methodology and utilisation of resources and appropriate skills of the project team	30
Extent to which the proposal achieves least cost path for CO2 equivalent emissions reduction	10
Approach to dissemination of results	10
The market impact potential of the proposal, including its capacity to address market barriers and its capacity for replication	20
Approach to addressing complete supply chain issues, including feedstocks and market introduction of biofuels	30
Approach to the achievement, monitoring and maintenance of quality standards	30
Approach to the evaluation of market impact with respect to performance of biofuels	10
The contribution of international competence in the field	10

Awards will be made to one (1) or more projects up to the limit specified in each category,

or,

where a number of projects exceed the limit, a decision may be made to adjust the awarded volumes to each successful applicant.

The Department of Communications, Marine and Natural Resources reserves the right not to make any recommendations on MOT relief to the Department of Finance.

6 Reporting and Monitoring Requirements

Successful applicants will be required to provide six (6) monthly reports including the information indicated in the attached Monitoring Document (MRD-092004-1) as appropriate.

Successful applicants will be required to fulfil such conditions and requirements as may be laid down by the Revenue Commissioners.

Data collected during the operation of this pilot programme will be used to inform future policy and measures in this area.

Applications should be made in the first instance to:

Biofuels Mineral Oil Tax Relief Scheme

Sustainable Energy Division

Department of Communications, Marine and Natural Resources

29-31 Adelaide Road

Dublin 2

Ireland

The closing date for receipt of applications under this call for proposals is:

13th May 2005 at 17:00 hours GMT

Applications should be clearly marked “Application for Mineral Oil Tax Relief on Biofuels”.

Note that Grant support for biofuel projects is separate to this initiative – Grant support is not available for the biodiesel or bioethanol elements of this pilot scheme. Applications for Grant support should be made directly to Sustainable Energy Ireland – details can be obtained at www.sei.ie/rerdd/strategy.

Note that Article 16.3 of the Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity requires adjustment to take account of changes in raw material prices to avoid over compensation for the extra costs involved in producing biofuels.

All queries by applicants in relation to the scheme for Mineral Oil Tax Relief on Biofuels must be made in writing to: