Mr. John Hughes:

I welcome the opportunity to present to the committee today on the general scheme of the industrial development (miscellaneous provisions) Bill 2025. I am the principal officer heading up the inward investment unit of the Department of Enterprise, Tourism and Employment.

In alignment with the latest programme for Government, the proposed Bill is aimed at enhancing Ireland’s competitiveness, driving sustainable growth and further enabling our transition to the green economy through amendments to the Industrial Development Acts designed to enhance the capacity of the enterprise development agencies - IDA Ireland and Enterprise Ireland - to offer grant assistance to their respective client companies. It is proposed to do this by updating and expanding the tool kit of the enterprise agencies, providing for new forms of grants that incentivise actions to reduce carbon emissions and map out digitalisation projects that are critical to expanding employment opportunities in the years ahead.

The Bill will also enhance IDA Ireland’s capacity to deliver property solutions to support both IDA and Enterprise Ireland investments into the regions . Therefore, it is proposed to allow IDA Ireland to establish designated activity companies, DACs, with third parties for the specific purpose of acquiring or developing industrial and commercial property and infrastructure across Ireland. Furthermore, the Bill also provides a vehicle for other legislation from the Department of Enterprise, Tourism and Employment, specifically amendments in respect of Enterprise Ireland regarding freedom of information, the Health and Safety Authority related to the length of appointments to the board and technical enabling amendments to the Dangerous Substances Act 1972 and the Chemicals Act 2008.

I will first address the IDA and Enterprise Ireland grant elements of the Bill. The first amendment provides for a new environmental protection aid grant.

IDA Ireland and Enterprise Ireland have grant-making powers under Part III of the Industrial Development Act 1986, but this does not specifically provide for an environmental protection aid grant to incentivise carbon abatement actions. The creation of a new category of grant will allow the agencies to assess such grant applications solely on suitable environmental criteria, rather than relying on research and development, fixed assets or other categories of grant under the existing legislation. These include conditions related to economic output and employment targets which are not the primary objective of projects aimed at carbon abatement or other environmental protection measures.

Additionally, updates to the EU’s state aid general block exemption regulation, GBER, provide for a number of new types of investments which support decarbonisation and sustainability projects by enterprises. The revised rules increase aid ceilings to support large-scale industrial decarbonisation, deep retrofits and industrial upgrades, as well as specifically providing for investments in circular economy methods. This has allowed EU member states to expand the provision of operating aid for the promotion of electricity from renewable sources, such as offshore wind, which is significant in the State’s strategy to develop this important sector. However, the existing 1986 Act needs to be updated to allow the agencies to maximise the potential to expand opportunities, which are available to other EU member states. The proposed amendment would also future-proof the legislation to provide for forms of environmental aid permissible under future iterations of GBER or, more broadly, any supports compatible with state aid rules, without having to further amend the Industrial Development Acts, the primary legislation.

The second amendment regarding grants provides for the enterprise agencies to offer financial support for clients to hire external consultants, in particular on the green and digital transitions. The 1986 Act does not specifically provide for grants to incentivise enterprise agency clients to hire external consultants to provide advice and recommendations on the green and digital transitions, thereby kick-starting this transition process. A grant for these services would currently need to meet the employment, output and value-added conditions for approval, as outlined in section 21 of the 1986 Act, or, much more commonly, come from a time-limited scheme approved by the relevant Ministers. This makes the use of the 1986 Act to aid access to expert consultancy advice challenging as it requires a client to satisfy the enterprise agencies as to outcomes in relation to employment, output and value-added before any advice from consultants is received. However, such conditions or criteria would continue to apply if follow-on grants, such as those for fixed assets, technology acquisition, etc., were to ensue.

More frequently - in fact, in nearly all cases - work-around solutions to this issue of consultancy grants where individual time-limited schemes are referred to Government for approval are used by the Department and the IDA. These are time-consuming to develop and create an unnecessary administrative burden for the Department and agencies. It also limits the flexibility of the agencies to respond to client company needs in as timely a manner as we would wish. It is proposed, therefore, to include amendments to specifically provide for the agencies to support their clients in obtaining external support in the form of consultancy to provide professional advice and guidance on the green and digital transitions, so they can develop their businesses on a footing which is sustainable and competitive in the long run. This should be of particular benefit to SMEs which are not typically directly employing experts in digitalisation or decarbonisation.

The last amendment on the industrial development side relates to grants. It provides for an increase in the threshold at which technology acquisition grants must be approved by the Government to modernise the 1986 Act and align it with previous amendments to other categories of grants. Currently, section 30 of the 1986 Act, which deals with technology acquisition grants, requires grants greater than £400,000 or exceeding an aggregate of £800,000 to be approved by the Government. The reference to punts tells us how old that legislation is. It is proposed to change the thresholds to €7.5 million and €15 million, respectively. These aggregate amounts, which can be granted to an undertaking without Government approval under fixed assets, for example, currently stand at €15 million. We are aligning the technology acquisition grant threshold with the fixed asset threshold that is already provided for in the legislation.

In relation to enterprise land and property development, an amendment is proposed to allow the IDA to co-invest with third parties, such as State agencies like the Ireland Strategic Investment Fund, ISIF, to develop property solutions and infrastructure through designated activity companies, DACs. This amendment would allow the IDA to leverage its property budget, expanding its ability to provide property solutions in regional locations. In tandem with the development and review of an ISIF pilot project, the IDA is currently engaged with a number of other stakeholders in relation to joint strategic objectives for developments in the regions. Currently, the IDA can only invest by itself, although it collaborates with others, including local authorities. Once the new legislation is enacted, the IDA will be able to partner with others to deliver enterprise property solutions once the terms of the DAC arrangements have been approved by the Minister for Enterprise, Tourism and Employment and the Minister for public expenditure.

In summary, these amendments, if approved by the Oireachtas, would allow the agencies to streamline their processes, fast-track incentives aimed at actions to drive the green and digital transition and stimulate further economic activity, particularly in regional locations, in line with the objectives of the programme for Government.

It is proposed to have a small number of other miscellaneous amendments included in the general scheme of the Bill. The first concerns amendments to the Dangerous Substances Act 1972. This relates to the definition of flammable liquids to ensure that Ireland’s dangerous substances legislation and licensing regime are fit for purpose to ensure a safe working and retail environment. It is also proposed to amend and bring the Safety, Health and Welfare at Work Act 2005 up to date with the code of practice for the governance of State bodies. This recommends that board appointments be for a period of five years. Currently under the governing 2005 Act, appointments to the board of the Health and Safety Authority, HSA, are for a period of three years.

The Chemicals Act 2008 is being amended to enable the Minister for Enterprise, Tourism and Employment to create offences with an increased maximum penalty for breaches of the EU’s so-called detergents regulation. It is proposed to amend the Freedom of Information Act 2014 to ensure that Enterprise Ireland’s disclosure obligations under the Act are not overridden by statutory confidentiality obligations that apply to the agency. This amendment will remove any uncertainty as to whether the FOI Act applies to Enterprise Ireland staff and will ensure there is clarity around Enterprise Ireland’s obligation to disclose information in line with the FOI Act.

I thank the committee again for the invitation to engage with it about these legislative changes. My colleagues and I will be happy to take any questions of detail.