Written answer
Climate Action Plan
The Government supports sustainable HVO as a transitional transport fuel, with rising renewable-fuel obligations expected to deliver a 20% biofuel blend in diesel by 2030. Research indicates that diverting HVO to achieve 100% use in heavy goods vehicles would offer limited additional emissions benefit and could cost €502 million annually; taxation options are under review.
199. Deputy Barry Ward asked the Minister for Transport the position regarding research carried out by his Department into the merit of promoting the use of HVO fuel for transport to support a reduction in emissions; and if he will make a statement on the matter. [64393/26]
Comment on this
200. Deputy Barry Ward asked the Minister for Transport his views on the use of HVO fuel for transport as an alternative to diesel; if his Department is carrying out research into the merits of promoting its use at a national level; and if he will make a statement on the matter. [64392/26]
Comment on this
I propose to take Questions Nos. 199 and 200 together.
The Renewable Transport Fuel Policy 2025–2027 (RTF Policy), which my Department reviews every two years, sets out a pathway for achievement of Climate Action Plan biofuel targets and EU Renewable Energy Directive targets for an increased share of renewable energy in transport. This is achieved through the Renewable Transport Fuel Obligation (RTFO), an obligation on fuel suppliers to ensure a minimum proportion of renewable fuel in all road transport petroleum products supplied in Ireland. The RTF Policy agreed by Government provides an indicative pathway of RTFO rates increase to 2030, subject to annual review by NORA. Renewable transport fuels, including HVO, that meet EU sustainability and greenhouse gas emissions reduction criteria are eligible for RTFO certificates and may be counted against the obligation.
The RTFO, set at 32% by energy for the 2026 obligation period, is expected to deliver a renewable fuel content in diesel of more than 12% this year. Further planned increases in the RTFO rate to 2030 are expected to result in a physical blend of 20% biofuel in diesel supplied in the State, comprising approximately 7% FAME and 13% HVO. This aligns with the B20 biofuel blending target set out in the Climate Action Plan. Regulations giving legal effect to the RTFO rates for the 2027 obligation period will be enacted by the end of this year.
Sustainable renewable transport fuels such as HVO provide immediate climate mitigation benefits utilising the existing vehicle fleet. They will therefore continue to play an important transitionary role in the decarbonisation of transport in the coming years as the shift to electrification and further increases in public transport and active travel are fully realised. Ireland’s policy on renewable fuels will continue to promote future supply of sustainable biofuels including advanced biofuels and renewable fuels of non-biological origin.
The evidence-base for the implementation of the RTF Policy involves ongoing analysis by the National Oil Reserves Agency (NORA) and other relevant research. A Working Group established under the RTF Policy steers appropriate modelling and research and provides updates on its work programme in the published Alternative Fuel for Transport Working Group Annual Report.
In line with the objectives of Ireland’s Road Haulage Strategy 2022–2031, my Department published the Assessment of the Availability of HVO for the Irish Heavy Goods Freight Sector (2025). The assessment indicates that, given the current RTFO requirement on fuel suppliers, any incentives aimed at increasing the supply of HVO toward 100% in the HGV sector will simply shift biofuel supply away from other road transport use sectors with minimal additional decarbonisation benefit in the road transport sector overall. Additionally, the study forecasts that a subsidy to equalise the price of HVO with diesel, in a scenario of up to 100% HVO supply, could incur an Exchequer cost in 2030 alone of €502m.
A further study has recently been finalised and published concerning the hierarchy of use of HVO which addresses the most efficient use of HVO relative to available renewable energy and zero emission alternatives across all transport modes as well as HVO use in non-transport sectors. The Report produced a hierarchy of use of HVO which aligns with several existing policies and measures, including the Sustainable Aviation Fuel, Taskforce Report, the Road Haulage Strategy, the Renewable Transport Fuel Policy, the Ports Policy, and the design of the Renewable Heating Obligation. It will also inform ongoing policy for increasing renewable energy in transport.
The 2025 Programme for Government includes a commitment to examine the taxation of HVO used specifically for commercial freight to support sustainable transport solutions in that sector. The Department of Finance, in conjunction with Revenue, as well as other relevant Departments and agencies will consider options in this regard. Taxation is a matter for the Minister of Finance.