BIOFUELS have had many false dawns. Each oil crisis of the past 30 years brought a surge of interest and activity, followed by a rapid cooling off when the queues disappeared from the filling stations.

So could this happen again? Very unlikely. This time the factors driving the beginning of a biofuel industry will not go away.

Firstly, while oil and gas prices will continue to fluctuate, the underlying trend will surely be upward, driven by an increasing world demand and falling reserves. Secondly, even if we had an unlimited oil supply, to contain global warming we will have to limit our use of fossil fuels. Thirdly, the European Commission has enacted the Biofuels Directive to force us to promote biofuel use.

And finally, farmers are in urgent need of alternative markets. Up to now the fuel market has not been a profitable alternative, but the falling returns from traditional markets combined with increasing oil prices are rapidly redressing the balance.

All that being said, the number of biofuel options that are ready for exploitation is still small.

Biomass can be used to produce three forms of energy: electricity, heat or engine fuel. Present renewable electricity prices are much too low to encourage generation from biomass. So, for the present we need to focus on three possibilities:

	Vegetable oil as a diesel engine fuel.
	Ethanol as an additive to petrol.
	Biomass crops and residues as heating fuels.

Vegetable oil: Recently the Government announced a scheme of excise relief for up to 7m litres of vegetable oil; a very welcome move, but it will need to be expanded soon. At least one biodiesel plant is badly needed;this would allow waste vegetable oil and some tallow as well as rapeseed oil to be brought into engine fuel use. Ireland could then produce about ten times the amount of fuel that is tax-exempted in the current scheme.

This in turn would lead to a reduction of about 150,000t in greenhouse gas emissions and create or sustain about 800 rural jobs. Most of the lost excise would be recouped by the extra income tax, VAT, etc, from the extra economic activity.

If the use of vegetable oil as fuel is to expand smoothly to its full potential, it is vital at this stage that motorists' first experience with the fuel is good. Producers should check oil quality regularly and make sure it complies with the relevant standards. Anyone thinking of using biodiesel at more than 5pc dilution with mineral diesel should check whether their engine warranty will still be valid.

For pure plant oil an engine modification kit from a reputable supplier should be installed by a suitably trained mechanic; users should also consider changing to a vegetable-oil based lubricating oil. This would allow the industry to get off to a smooth start and build a strong case for an expanded excise relief programme.

Ethanol: The difficulties of the sugar sector together with falling cereal prices have focused renewed attention on the possibility of producing ethanol from these materials for addition to petrol as an octane booster instead of MTBE. At present oil prices and with full excise relief it should be possible to pay a realistic price for grain and keep the ethanol produced at a competitive price.

Possibilities for sugar beet conversion will be easier to evaluate when the future of the sugar sector is more clearly defined. Efficient ethanol production requires a large scale, and a major investment will be needed to get a plant under way.

Author: Bernard Rice Oak Park Teagasc research Station.