Ms Catherine Joyce-O'Caollai:

On behalf of the Hydrogen Ireland membership, I thank the joint committee for the opportunity to share our thinking on the EU’s proposed net zero industry Act. Hydrogen Ireland aims to promote the role of hydrogen in becoming a key component of our future low-carbon economy on the island of Ireland. I am from the ESB representing Hydrogen Ireland in my capacity as co-chair of the policy working group. I am accompanied by Ms Gillian Kinsella of Bord Gáis Energy, also co-chair of the policy working group.

The net zero industry Ac should be examined in the context of the current emerging policy framework for hydrogen in Ireland. The climate action plan currently contains commitments to kick-start the hydrogen sector, in particular to release a hydrogen strategy which is expected in the coming weeks, and for 2 GW of offshore wind dedicated to hydrogen production to be in development by 2030. The Act can provide support for the development of an Irish hydrogen sector, if implemented in an efficient, practical and flexible manner.

In the interests of time, our comments will focus on the most relevant aspects from an Irish perspective, those being the designation of net zero technologies and enabling legislation to deploy early projects in hydrogen through regulatory sandboxes. Second, we will focus on how these measures can assist Ireland’s decarbonisation and security of supply objectives and enable the industrialisation of offshore wind, with the potential to derive additional value from our significant renewable resources and incentivise regionally-balanced growth. Third is the skills dimension and establishing academies to develop the skills needed to develop the transformational change in our energy systems. Finally, we will look at how the net zero industry Act measures could interact with additional EU instruments, such as EU funding tools and the state aid framework.

The aim of the net zero industry Act is to scale up the manufacturing of technologies key to achieving climate neutrality. The Act has selected certain net zero technologies, such as solar panels, batteries and electrolysers, as being key to meet this target. Electrolysers use renewable electricity to produce renewable or green hydrogen that can be used in a variety of settings to decarbonise multiple sectors, including industry, energy generation, transport and many more. The categorisation of “renewable” or "green" is important, as it can contribute to Ireland’s renewable energy targets and the binding hydrogen sub-targets under the renewable energy directive.

A simplified regulatory framework for the manufacturing of these technologies is proposed for a limited amount of time to help increase the competitiveness of the net zero technology industry in Europe. Measures to achieve this include time limits on the permit-granting processes for net zero manufacturing projects and a requirement for member states to set up one-stop shops to act as single points of contact for project promoters. This is particularly relevant for the EU’s electrolyser manufacturing sector, which is planning to ramp up electrolyser production within the EU by a factor of seven within three years, moving from the current 3 GW production capacity to approximately 21 GW by 2025.

As Ireland is in the very early stages of developing a hydrogen sector, the inclusion of renewable hydrogen technologies such as renewable hydrogen and electrolysers, the manufacturing of fuel cells for different mobility and other uses, and the production of sustainable aviation fuel are clearly relevant in in the Irish context. The Irish hydrogen industry will likely need to scale up at pace to meet its carbon budgets. Therefore, it is important that hydrogen producers can access the necessary technologies such as electrolysers from manufacturers.

Moving on to the regulatory sandboxes for cluster development, it is important to also examine how these proposed measures can assist in meeting our climate targets, specifically measures to enable the development of renewable energy clusters and support regionally-balanced growth across the breadth of Ireland. Clusters or hydrogen valleys occur when renewable energy, hydrogen production and consumption, and the associated infrastructure, are developed together in close proximity to one another. This cluster or hub-based approach has been important to the development of hydrogen in many countries and has great potential for Ireland. The proposals to develop hydrogen valleys and renewable energy hubs, through accelerated permitting, the use of regulatory sandboxes and prioritised access to funding, have the potential to provide material momentum for their delivery.

In the interest of time, I will move to the skills section. The focus on skills, especially the creation of net zero industry academies with upskilling and reskilling programmes, is to be welcomed. While we recognise the scope of much of the Act is temporary and includes some exceptional measures to deploy net zero technologies as quickly as possible, it is important to point out that we are setting up structures to develop lifelong careers. Well-designed, targeted, multi-annual funding schemes will nurture apprenticeships, roles for technicians, engineers, energy software designers and many more. While seed funding is envisaged from a variety of EU funding sources, a multi-annual approach to fund these academies is important.

Finally, I will deal with financing and funding. As has been recognised in a number of EU policy statements, the development of net zero industry projects, including hydrogen projects, will require public support. The existing state aid framework - the climate, energy and environment aid guidelines - provides the ruleset for eligible projects and the nature of support that can be provided for under EU law. Other measures of relevance to the implementation of the net zero industry Act are the temporary crisis and transition framework and the endorsement of the revised general block exemption regulation. It is also worthwhile considering their role in enabling the replacement of fossil fuels in Irish industry in order to speed up and simplify state aid approval procedures for the timely deployment of projects.

I thank the committee for its time. We welcome further engagement on the topic and look forward to members' questions.