He told the Oireachtas Budget Oversight Committee last week that a land area similar to that which once produced sugar beet and some of the land which may be removed from livestock production as a result of planned Government schemes should be used to grow rapeseed for the production of HVO fuel.

Drennan said the new Euro 6 and Euro 7 engines have the potential to reduce the carbon emissions of lorries by 20pc and said with a 25pc additive of HVO to a fill of diesel, the haulage industry could go a long way towards meeting its 50pc emissions reduction target.

"There is an agenda in Europe that food products must, in the first instance, be used for food, but because we are an island and we need to reduce the carbon... it would take us straight into the first barrier and first line that is required by 2030 of a 50pc reduction.

"Any monies and grants that would be available for farmers...would be tied into this production with a fair return for it, but it would be kept for indigenous industry here," Drennan proposed.

The cost of the HVO, he said, should be 'tied' to the commercial rate of diesel at that time.

"If this product can be grown and refined here and rather than a carbon subsidy would be to a carbon-reducing subsidy," he said.

Also speaking at the Committee hearing, IFA President Tim Cullinan cautioned that such a measure would require funding and be dependent on the availability of land.

Land availability, he said, was an issue that the IFA are 'very concerned about.

"If we look at what farmers have already engaged in with regard to reducing emissions, we estimate that if we were to increase forestry and tillage land, which would be similar to growing rapeseed, we would decrease the amount of grassland by something in the region of 8pc or 9pc, which would be a significant challenge for and cost to our sector," he said.