The argument against increasing the use of ethanol is that it is imported and made from food crops. Bio diesel can be made from rapeseed and other crops which can be grown in Ireland.
At present, motor sales are non existant so tax revenue from selling or registering new cars is negligible.
My suggestion is that the govt. cut taxes on diesel cars sufficiently to make them more attractive than petrol engines. Eventually when people start to buy cars, they will choose diesel which have better fuel consumption than petrol.
Simultaneously, encourage the construction of several biodiesel plants which would setup contracts with tillage farmers to supply suitable feedstock for a period of years - much as the brewers and distillers contract with farmers to grow barley.
We can switch to diesel quite easily, electric cars are a way off and once the recession in the U.S. eases, fuel costs will start to rise again.