The Government has granted tax relief worth up to €6 million to eight bio-fuels projects.
The relief will be permitted for the production of 16 million litres of biofuels over a two-year period starting in 2005.
Under the scheme, four pure plant oil projects, three bio-diesel projects and one bio-ethanol project have been approved.
The Minister for Communications, Marine and Natural Resources Noel Dempsey said the move was designed to develop a sustainable long term bio-fuels sector in Ireland.
Bio-fuels are more sustainable transport fuels than their fossil fuel equivalents and release less carbon dioxide emissions.
IFA President John Dillon welcomed today's announcement saying "it was vital that we move the whole industry from its current pilot project status to a commercially viable industry."
"The granting of excise rebate on 6m litres of vegetable oil equates to production from 5,000 - 6,000 ha (12,500 - 15,000 acres). This is a welcome start. However, it only achieves a substitution rate of 0.1% compared to our obligation of 2% for 2005 under the EU transport biofuels directive."
Mr Dillon said: "Ireland is 89 per cent dependent on imported fuels compared to 50 per cent for the rest of the EU."
"A switch to home produced bio-fuels will reduce our dependence on imported fossil fuels at a time when petrol and diesel prices at the pumps are reaching an all time high of €1.10 per litre," he said.
