Mr. Mauro Petriccione:

I thank the Chairman for her kind introduction. I am happy to be before the committee to give evidence on the European Commission's proposals on a climate neutral Europe by 2050.

I will not elaborate on the impact of climate change. It would be superfluous to do so in front of this committee. Suffice it to say that our concerns continue to increase. The science has not only been very clear, as in the IPCC report last year on the impact of global warming of 1.5°C, but every additional item of scientific information confirms that the situation is perhaps even more difficult than we had envisaged. The urgency is evident. As members have pointed out, we consider the circumstances in Ireland with some concern and look forward to the new national plan to have a clear view on where Ireland intends to redress certain shortcomings.

This is not a surprise or a unique set of circumstances in Europe. The transformation required is massive. It will tax the way we all think in policymaking in Europe. There are shortcomings across the European Union. They differ and are rooted in different national realities but this is the time for all of us to work together to correct them.

Reference was made to the national energy and climate plan Ireland has presented in draft form. The Commission will issue recommendations for all the plans by the end of June. The objective of the Commission is not to sit in judgment on the national plans but to point out where more work is required, encourage the exchange of best practice among member states, flag best practice that other member states could study and imitate, and arrive at a better picture at the end of this year in terms of the national plans and their overall coherence. We do not expect the plans to be perfect. There is a lot of work required in Europe. In certain areas, it is clear that the national legislative and regulatory work will not happen in the space of a few months. This is the start of a process of continuous dialogue between member states and European institutions to improve our policies towards 2030.

We all know the policies we have adopted in legislation for 2030 in themselves will not help us to do our part in reaching the goals of the Paris Agreement but they are, contrary to the views of some, profoundly transformative. If they are implemented in full and correctly, they will be capable of changing the way we address the problem and of teaching us how to continue to accelerate our policymaking towards the objective of climate neutrality.

One of the reasons the Commission has wanted to propose climate neutrality as an objective is that we need an endpoint that is sufficiently ambitious to meet our objectives so as to guide us in the further development of our policies after 2030. At present, however, it is only a proposal by the Commission. A criticism we receive very often is that we are not very explicit about how the policies will be developed after 2030. I will try to give members some indication. The important point is that we now have strong political endorsement at European level. The formal endorsement ought to come from the Heads of State and Government in the European Council. We have advocated and tried to facilitate by supplying information and explanations. It has to be based on deep and strong national debates. We need to have an endorsement of the objective at institutional level but with sufficiently deep roots such that we can examine its implementation over what is an unusually long planning or policy period. Thirty years is not a period we normally operate under.

Having said all this, let me give the members a very brief description of what is in the strategy. First, it is based on a very thorough scientific and economic analysis and the best science we collect. We have seen recently confirmation of the soundness of that approach in the similar report that the British Committee on Climate Change has produced. In many ways, it confirms our analysis and, in other ways, takes it further. We would welcome more work of that nature in member states and elsewhere. We need to continue to deepen the analysis.

We have analysed eight scenarios. They are not predictions or representations of what the Commission believes Europe will look like in 2050. These scenarios are meant to expose a range of possibilities or options to allow readers to form a judgment on the feasibility of certain policy choices, their implications and what is required to realise them. Five of the scenarios would result in a reduction in greenhouse gas emissions of about 80%. They are based on what we call single technologies. One takes one main technology and makes a number of assumptions to push it as far as one can. With regard to electrification, let us electrify everything we can think of. Let us replace fossil fuels with decarbonised fuels by using the same architecture we have in terms of power generation and distribution. None of the scenarios, under these conditions, is capable of achieving the desired objectives. It is only when one starts combining technologies and creating a more complex system that resembles the complexity of our current economy that one approaches and finally meets the objective of net zero emissions by 2050. Of the two scenarios that describe this, one incorporates a strong analysis of behavioural change, extrapolating from trends we see in our society today. The other scenario introduces a substantial, but still complementary and not mainstream, element of carbon capture. Our analysis nowadays is that carbon capture cannot be the ultimate solution, which would enable us to decarbonise society without changing anything else. There will, however, be applications where carbon capture is likely to prove indispensable if we want to have a total reduction in emissions.

On the basis of these scenarios, the Commission has made a political choice to propose to member states to endorse the objective of carbon neutrality. We have chosen the term to capture a number of the terms that are in common usage in this debate. As is well known in Ireland, there is a real issue concerning emissions in the agriculture and land use sector. European agriculture is one of the core policies of European Union. We are aware that decarbonising and eliminating greenhouse gas emissions from the agricultural sector, at least in the foreseeable future, is likely to be impossible. We have to manage that. I refer also to the notion of net zero, building on the fact that our land sector nowadays has a good carbon balance. Our carbon sink is effective and we ought to maintain, enhance and nurture it over time. One of its functions will be to compensate for emissions outside the agriculture sector, which may prove impossible. I am thinking, for instance, of the most difficult area, namely, aviation. All the scenarios, forecasts and projections are based on the preventative assumption that we have the technology to meet the objective. We are not relying on new inventions and we are not relying on future and unproven technologies. Granted, some of these technologies have not been tested at scale. They have been tested in pilot projects, however, and are known to work.

It is not clear how much of a scale is needed to make some of them commercially viable. It is already clear that some of them would benefit from further research and refinement. I am thinking of batteries, for instance, with storage of electricity being one of the bottlenecks we have identified. The fact remains that this is a prudential analysis based on technologies that we have and that we can use and improve without having to adopt a revolutionary approach or without having to hope that our scientists will produce a miracle solution.

The other important aspect is that this is as much a strategy for economic development as for climate action. Our assumption has always been that any strategy which did not guarantee the continuing prosperity of European society and economy had very little chance to be politically acceptable, even for a purpose as important as climate change. We have concentrated on developing a strategy which concentrates as much on prosperity.

The existing situation is not satisfactory. We have an economy which is still doing reasonably well but has many fragilities, and our competitiveness is under pressure from competitors abroad. We are losing the technological lead and must spend important capital to modernise our industrial fabric. Our energy supply continues to be outside our control with serious implications on energy security and independence. We have tried to develop a strategy which addresses these issues as well as climate change and we believe that this strategy is capable of doing that. This is an investment strategy.

One of the difficulties is that much of the necessary investment is front-loaded over the next ten to 15 years. That will be a challenge. At the same time, there is an enormous appetite in the private sector for finding ways to deploy capital in this direction. One of the priorities, in the view of the Commission, is to concentrate on ways to facilitate and incentivise the employment of private capital in this direction. We see this, essentially, as an investment challenge as opposed to a cost issue. The cost is the impact of climate change and these are investments to avoid those costs.

I am happy to answer any questions that the committee has.