Doug McCoy, general manager of Saab Ireland, welcomed the launch this week of the government's Energy White Paper, which incorporates the National BioEnergy Action Plan, but wants urgent action on its plans to review VRT (vehicle regisratgion tax) and motor road tax so that motorists will opt for vehicles with lower CO2 emissions.

"The 50% VRT relief provided so far should be extended to 100% relief.

At the same time government should look at ways to remove motor road tax on cars which contribute to lowering CO2 emissions and at significantly reducing car insurance costs for their drivers, " he said.

Free city-centre parking for 'green' car owners should also be introduced, according to McCoy.

He also called for the establishment of a government programme to encourage Irish consumers away from fossil-based fuels and put Ireland at the top of the world green league table for motorists.

"The government should put in place a programme which proactively encourages consumers to purchase cars that use bioethanol and other biofuels and which incentivises fuel supply companies to offer these biofuels on their forecourts, " he said.

In November 2006, Saab Ireland launched its 9-5 BioPower car, which runs on E85, a renewable bioethanol.

The fuel can reduce CO2 emissions by up to 80% compared with petrol.

It is derived from milk whey sourced in west Cork and is marketed by Maxol at a growing number of filling stations throughout the country.

The Saab Biopower car also runs on unleaded petrol, for those times when consumers are not near an E85 pump. Unique to Saab, the 9-5 BioPower car produces up to 20% more power than its petrol equivalent - the 2-litre engine - which puts out 150bhp on petrol but develops 180 bhp when powered with E85 thanks to new engine management systems.

Ford also market a FlexiFuel vehicle that uses E85 - a Focus 1.8litre. This model has been joined by the C-Max and there are plans to add more models, including the new Mondeo.

The current 50% VRT reduction translates to a minimum reduction of Euro6,232 on the list price of the Saab 9-5 BioPower. The government has so far removed VAT from the price of the fuel for those who are VAT registered and at least two insurance companies have agreed a 25% reduction in premiums.

McCoy said, "We also call on the government to offer strong incentives to fuel supply companies to put in place facilities for biofuel or E85 pumps throughout the country."

He said that Biofuel has a number of benefits for Ireland. "It has the potential to create more rural jobs through indigenous production of the fuel from wheat, grass, cereal and milk products. It would reduce Ireland's dependence on fossil fuels and could put Ireland at the cutting edge of this new technology."

The government BioEnergy Action Plan states that the Department of Finance and the Department of Environment, Heritage and Local Government have simultaneously launched reviews of VRT and motor road tax, with a view to providing further incentives to those choosing cars that contribute to lowering CO2 emissions.

The action plan has set a biofuel target of 5.75% for road transport fuel for 2010 and a 10% target for 2020.

McCoy said that in Sweden consumers are choosing BioPower models over petrol, accounting for 80% of Saab's total 9-5 model sales.

The company is hoping Irish drivers will follow now that they have a viable and eco-friendly option.