Mr. Seamus McCarthy:

The Appropriation Account for Vote 29 - Environment, Climate and Communications records total expenditure of €2.366 billion in 2022. This was almost four times the €664 million spent in 2021. The main reason for the increase with the exceptional expenditure on two electricity credits schemes in response to rising energy costs.

Expenditure in 2022 is accounted for under four programmes in what is a revised structure for the Vote. The programme for climate action and environment leadership involved expenditure of just under €97 million, including grant support for the Environmental Protection Agency, EPA. Expenditure under the energy transformation programme amounted to €1.97 billion, comprising €1.588 billion spent on the energy credits schemes and €387 million on other energy schemes, including energy-efficiency grants support. A total of €90.6 million was spent on the circular economy development programme, which encompasses inland fisheries, waste management and the Geological Survey Ireland, GSI. Expenditure on the connectivity and communications programme in 2022 was €203 million. Of this, €177 million related to expenditure on the NBP. The net surplus remaining at the year end was €301 million, which was liable for surrender to the Exchequer.

The SEAI works primarily with Irish householders, businesses, communities and the Government with the objective of creating a cleaner and more efficient energy future. Additionally, it supports the development of clean energy technologies and has responsibility for the administration of the national building energy rating, BER, system. The SEAI's income in 2022 totalled €344.5 million. Of this, €336.2 million, or almost 98%, came from Exchequer cash grants. Some €271.5 million was received from Vote 29, Environment, Climate and Communications, for a range of grant schemes and for the SEAI's general administration costs. A further €64.7 million was received from Vote 31, Transport, to support the electric vehicles programme. Details of expenditure on the individual grant schemes are provided in note 7 to the financial statements. The authority's overall expenditure on administration amounted to €23.2 million, up from €18.8 million in 2021.

Ireland is committed to a legally binding target of reducing greenhouse gas emissions by 51% from a 2018 baseline by 2030. Achieving this target will require significant reductions in emissions from all economic sectors. This includes significant reductions in emissions from existing housing stock. At the end of 2022, just under 40% of the housing stock had a valid BER certificate. Of those that were certified, fewer than one in five had a rating of B2 or better. The target is to retrofit the equivalent of 500,000 dwellings to a BER rating of B2 by 2030.

The Department of the Environment, Climate and Communications funds a range of sustainable energy programmes to support the achievement of reductions in emissions and to reduce energy poverty. It has provided funding of around €1.2 billion for sustainable energy programmes, and the majority of this funding, €1.1 billion, was provided to the SEAI. The report before the committee today reviews the performance of two SEAI-managed home retrofit schemes, namely, the better energy warmer homes scheme, under which retrofit works to benefit those at risk of energy poverty are 100% grant funded, and the better energy home scheme, under which grants are provided to support home owners commissioning retrofit works. Over the last ten years, expenditure on these two schemes has amounted to €538 million.

On a targeted basis, the SEAI conducts inspections of retrofits carried out by contractors under the schemes. In 2022, two in five of the projects funded under the better energy warmer homes scheme were inspected. In comparison, just under one in five projects under the better energy home scheme were inspected. Of the projects inspected, only around half initially received a pass rating. Following rectification, almost all retrofits achieved a pass rating. Because the inspections are carried out on a targeted basis, the initial results of the inspections may not be representative of the standard of works overall. Nevertheless, they indicate that a higher rate of inspection may be required.

The intended outcomes of both schemes are reduced emissions and energy savings. Currently, estimates of the outcomes are calculated using assumptions based on aged sources of data. Actual reductions achieved in energy consumption could be established using data from sources such as meter readings taken before and after the retrofit has taken place. These data are available to energy suppliers but not currently to the SEAI.

In 2018, greenhouse gas emissions from the Irish residential sector stood at an estimated 7 Mt CO2 eq. The climate action plan target is for this to fall to not more than 4 Mt CO2 eq by 2030. Retrofits supported under the SEAI's residential schemes are estimated to have contributed modestly to the required emissions reduction and are projected to deliver less than half the target reduction by 2030. To help to achieve this, the SEAI must meet its 2025 interim target for B2-equivalent retrofits carried out. Up to the end of 2022, the SEAI estimated it had achieved just over a quarter of that target, and it is not clear how or if the SEAI-funded schemes will deliver the remaining target retrofits in the three years from 2023 to 2025.

Before I conclude, I would like to draw the attention of the committee to a small number of amendments in the report following publication. As part of the preparation for today's meeting, we identified some minor corrections required to the figures in the report. These increased the retrofit works inspection rates, shown in figure 8.7, for the better energy warmer homes scheme to 51% for 2021 and 41% for 2022. The estimated energy saving for homes retrofitted in 2020 under the same scheme, shown in figure 8.8, has also been revised to 4.7 GWh from the previously indicated 4.4 GWh. While the changes are marginal, they do not affect the conclusions or recommendations of the report. However, in the interests of accuracy, I wanted to take this opportunity to correct the record in this regard. Go raibh maith agat, a Chathaoirligh.