Cllr. Jim Townsend calls for urgent action by the Government to re-establish the Sugar Beet industry in Ireland, thereby creating up to 6,000 jobs.
Issued : Thursday 8 September, 2011
Background to New Feasibility Study on establishing a Sugar Beet Bio-Refinery in Ireland
For many years prior to 2006, Ireland produced over 200,000 tonnes of sugar, sufficient to supply the indigenous market including Northern Ireland and some exports. This market was maintained in the face of intense competition from producers in other EU countries. Within the EU sugar regime, Ireland, the only EU country to cease production in 2006, had a production quota amounting to 181,145 tonnes of A-quota sugar (eligible for maximum support), and 18,115 tonnes of B-quota sugar (lower level of support). In spite of having highly efficient processing facilities, Ireland ceased sugar production in 2006, in the face of regime reform that reduced sugar price support levels and production quotas, and in return for compensation to processor, growers and contractors. The Irish sugar market is now supplied mainly from the UK and by imports from other EU countries. The EU is now in deficit to the tune of approximately 5 million tonnes and confectionery manufacturers and other industries are finding it difficult to acquire sugar.
Under EU CAP reform, national milk quotas will be abolished in 2014. It is understood that sugar quotas (the only remaining commodity quotas) will be reviewed at the end of the current regime in 2015, and may be abolished. These changes in EU regulations open up the clear possibility for Ireland to return to sugar production. If the Irish sugar quota cannot be renewed immediately, it would need to be restored at latest in Oct 2015 when the new sugar regime comes into effect. In either event, planning needs to begin immediately and Ireland needs to begin preparations to apply for reinstatement of its sugar quota.
The Irish Sugar Beet Bio-Refinery Study Group came together in September 2010 to examine the feasibility of establishing a facility to produce indigenous sugar and ethanol for the Irish market. To allow the study to be carried out in a speedy and cost-effective way, a team was assembled with wide knowledge and experience of beet and grain production and transport, processing to sugar and ethanol, marketing of these commodities, and marketing or further processing of by-product molasses and pulp. Visits were undertaken to Germany, Poland and Austria to inspect plants and hold discussions with suppliers of processing equipment and constructors of sugar and ethanol factories known to be reputable from past experience. The experience of British Sugar in their conversion of Wissington Sugar Factory to a multi-product bio-refinery was also noted.
In this study, an opportunity has been identified for the establishment of a profitable modern, integrated bio-refinery plant in Ireland to produce sugar, bio-ethanol and a number of other products from sugar beet, cereals and molasses. Many benefits would accrue from such a project; large-scale import substitution, a major boost for employment and the rural economy of the tillage area, a significant contribution to the achievement of mandatory EU biofuel use targets, and an increased national security of supply for two important commodities.
About 165,000 tonnes per annum of sugar (currently costing over €130 million) is consumed in Ireland, and all is imported. To meet the requirements of the Biofuel Obligation Scheme introduced in 2010, Ireland has an annual need for about 200 million litres of biofuel such as bio-ethanol at present; this will
increase to 500 million litres by 2020. Only a very small fraction of this demand is currently produced domestically; virtually all the remainder is imported. The total current value of these two imports is more than €250 million; this will rise to over €400 million by 2020.
For the optimum production scenario that is envisaged, the total capital investment in the plant would be €350 million. Of this, construction work to the value of at least €200 million could be sourced in Ireland. Between 400 and 500 jobs would be created during construction; approximately 200 would be employed to operate the plant, but the indirect employment effects among farmers, agricultural contractors, hauliers and suppliers of inputs would be in the region of 6000. There would also be a significant benefit for Irish sugar-consuming industries to have a freely-available supply of indigenous sugar.
Most EU member states are introducing fiscal, financial and regulatory measures to counteract the effects of transport fuel excise on biofuel sales. It is assumed that the current Irish Biofuel Obligation Act will be amended as necessary to ensure that home-produced ethanol will not be exported and will contribute to the Irish 2020 substitution target. To bring Ireland into line with most other EU countries and to minimise unfair competition from some imports, it is also important that the fuel use of ethanol in Ireland be confined to un-denatured ethanol at 99% purity.
It is concluded that a sugar-ethanol bio-refinery is a more viable option than a unit for the sole production of either sugar or ethanol. The ability to process three feedstocks (beet, grain and molasses) and to produce for several markets (sugar, ethanol and by-products including animal feed) would allow flexibility in coping with changes in feedstock and product prices. The development of such a bio-refinery would be of immense benefit to the rural economy of its catchment area. Its realisation will require full co-operation between the processor, farmer, government and the European Union. With this co-operation it is envisaged that a very valuable indigenous industry can be established.
The report has been reviewed by Price Waterhouse Coopers (PwC) who provided the model for the financial and sensitivity analysis of the project in conjunction with chartered accountant Mr. Brian Buckley, ACA, AITI.
Cllr 
