Oireachtas Joint and Select Committees
Thursday, 20 June 2013
Joint Oireachtas Committee on Environment, Culture and the Gaeltacht
Climate Change: Discussion
I welcome the representatives of the Department of Communications, Energy and Natural Resources: Mr. Ken Spratt, assistant secretary responsible for energy; Ms Mairéad McCabe, principal officer in the energy planning and electricity corporate division; Mr. Stjohn O'Connor, principal officer in the energy efficiency and affordability division; and Mr. Brian Carroll, principal officer in the renewable and sustainable energy division. I welcome the delegates from the Department of Agriculture, Food and the Marine: Mr. Paul McKiernan, principal officer; Ms Margaret Murray, assistant principal officer; Mr. John Muldowney, agriculture inspector; and Mr. Eugene Hendrick, senior inspector, forest service. They are present on behalf of the climate change and bio-energy policy division of their Department. I welcome the delegates from the Department of Transport, Tourism and Sport: Mr. John Fearon, assistant secretary with responsibility for sustainable transport; Ms Laura Behan, principal officer; and Ms Denise Keoghane, assistant principal officer in the sustainable transport division.
I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they give to the committee. However, if directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.
Witnesses’ opening statements and other documents supplied to the committee may be published on the committee's website following this meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise nor make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.
The committee is currently considering the outline heads of the Climate Action and Low Carbon Development Bill. It is essential that we hear the views of the various Departments before moving on to the stakeholders. We have already engaged with the Department of the Environment, Community and Local Government on this issue. Accordingly, I am delighted to have the other key Department heads before us today. I ask them to concentrate specifically on the heads of the Bill and to outline to us the salient points in regard to each head. I invite Mr. Spratt to address the committee.
Mr. Ken Spratt:
I am joined by Mr. Carroll, the head of our renewable energy division, Mr. Stjohn O’Connor, head of our energy efficiency division, and Ms Mairéad McCabe, head of our energy planning and co-ordination division, with special responsibility for the European Presidency.
Our Department is fully committed to working closely with our colleagues in the Department of the Environment, Community and Local Government on implementing Government policy on energy and climate, including the development of a sectoral road map for energy. In adopting a cross-departmental approach and aligning our respective road maps, the determination shared across the board is for a robust framework that allows us to adopt appropriate measures within realistic, but ambitious, timelines. We note that the explanatory note to head 4 states the national and sectoral low-carbon road maps are aimed at achieving transition to a low-carbon, climate-resilient and environmentally sustainable economy in a cost-effective way and as soon as possible, and not later than 2050. From an energy policy perspective, our Department is mindful that sustainability and cost-effectiveness must be accompanied by paying due attention to energy security. Adopting a national and integrated approach in close discussion with other Departments will facilitate the development of workable policy that is effective in terms of sustainability and energy security.
It is important to recall the various 20s from the 20-20-20 EU plan. While we are focusing today on the commitment to reduce greenhouse gas emissions by 20%, the European Council and the directive are committed to increasing by 20% the energy efficiency in the Union and to reaching a target of 20% renewables in total energy consumption in the Union. My Department is leading Ireland's delivery of these two other targets. While we are facing many difficult challenges, we are making very steady progress and are on track to reach the goals.
Reaching the energy efficiency goal and the renewable energy goal will make a significant contribution to the greenhouse gas emissions goal. Energy policy in Ireland and most developed countries is founded on the three pillars of security of supply, competitiveness and sustainability. More recently, as we consider updating our energy policy paper, we have been mindful of the opportunity that energy policy presents in terms of growth and jobs. After the Presidency, we will turn our attention to the policy paper. Members will notice a significant focus on the jobs and growth agenda, which has been uppermost in the Minister's mind and a major focus of the Government.
It is important to understand the unique characteristics of our energy mix. We are heavily dependent on imports of oil and gas from neighbouring markets. Against that backdrop, our renewable energy capacity has continued to expand, with increasing use of wind power feeding into the grid. Despite the difficult economic situation, reform and modernisation of the energy market has been steady, with implementation of an all-island electricity market, entry of new players into the competitive retail electricity and gas markets, and substantial investment in infrastructure. Progressive liberalisation of the gas and electricity markets has been a positive move.
I have already mentioned our proactive energy efficiency policy. We wish to embrace the benefits of new energy technologies, particularly demand-side management tools on a smart grid tailored to suit our local circumstances. Our efforts are aimed at making progress towards 2020 goals and anticipate even further greater ambition after that year. Meeting ambitious objectives and balancing competing values will require considerable analysis and sound modelling at both national and European levels.
As we face the end of an era based on fossil fuel and transition towards another based on establishing new energy systems, based on renewable energy and incorporating new technologies, we must employ sound data and evidence to develop accurate modelling scenarios that will enable us to make sound predictions on a more scientific basis across the range of sustainability, security and competitiveness.
Head 5 of the Bill emphasises the need for due consideration to be given to the economic impacts of the national and sectoral road maps. I am thankful that good work has been done on developing sustainability-focused models, but much more needs to be done to develop good quality predictors and models based on energy security and competitiveness. We anticipate working closely with colleagues in other relevant Departments to ensure the full impacts of options for the sectoral road maps are clear.
I will touch briefly on a number of recent developments in order to give the members some important background context to the Irish energy scene. The in-depth country review of Ireland, conducted by the International Energy Agency in 2011 and reported on in July 2012, contained many positive comments on the direction being taken in the Irish energy market. In its key recommendations, the agency urged actions to support the drive towards a low-carbon economy, including the development and deployment of new carbon technologies, in which Ireland has an advantage; ensuring that participation in regional energy markets brings benefits to our customers; and emphasising the balancing of local community concerns with the benefits of critical energy infrastructure. It also recommended in its report that we outline a plan for emissions-reduction targets and that we update our position on developing low-carbon strategies and plans, which is why we are here today. It recommended that we clarify the position on carbon tax and explore synergies between the energy and agricultural sectors so as to contribute to lower greenhouse gas emissions. In addition, it identified a number of actions on continuing to strengthen our energy efficiency strategies and plans. There is good alignment between the Bill and the recommendations of the International Energy Agency.
Central to any future decarbonisation strategy will be the maximisation of energy efficiency opportunities, a point highlighted by the agency in its annual report entitled World Energy Outlook 2013.
Unlocking the energy efficiency potential on an economically viable basis will remain a key focus of Irish energy policy. Yesterday, the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, launched the energy efficiency framework exemplar projects in DCU. They will test new processes for procuring, contracting and financing energy, and carbon-saving projects.
The national renewable energy action plan, NREAP, sets out the Government's strategic approach to deliver on Ireland's target to achieve 16% of energy from renewable sources by 2020. We aim to achieve 40% electricity consumption from renewable sources by 2020. On the transport front, we are seeking to transform our oil dependency. A two-pronged strategy has been put in place that combines significant increases in the use of bio-fuels with facilitating greater use of electric vehicles in Ireland. The Government has also set a target of 12% renewable heat by 2020. A series of related and complementary support programmes has already been put in place to address the delivery of this target, aimed at supporting both demand and supply sides.
Let me refer to the European Commission's Energy Roadmap 2050 and its Green Paper on a 2030 framework for climate and energy policies. These important documents refer to the close linkages between climate and energy policy development and acknowledge the benefits of retaining a European approach to that policy after 2020. Needless to say, the Department will ensure Irish interests are well represented in the development of a combined approach on target identification and delivery. The work that we undertake on our sectoral roadmap will feed into our work on the 2030 framework.
I shall mention briefly some of the work that we undertook during our Presidency of the Council of the European Union. The Minister chaired three Councils of energy Ministers, one being an informal meeting held at Dublin Castle. Good progress was made on various legislative and other files, including excellent discussions on the 2030 framework and the need for renewed focus on facilitating energy efficiency.
Our Department is acutely aware of its responsibility as Ireland, Europe and the world transitions to a low-carbon economy and society. We are seized of the challenges that such a transition presents across a number of fronts. We must play our part in minimising the rise in global temperatures as much as possible. We must achieve our long-term carbon ambitions without damaging our national competitiveness or undermining our energy security. We are setting about our interrelated goals, within the legislative framework set by the Oireachtas, in collaboration with colleagues in other Irish Departments and agencies. Our international colleagues, in Europe and beyond, are also focused on similar challenges and eager to engage, co-operate and succeed. We look forward to addressing and overcoming the obstacles to a low-carbon future.
We are happy to answer any questions members may have concerning the Bill and the surrounding policy approach. While we are not in a position to make an immediate response, we would be happy to provide follow-up information to the Members over the coming days.
Mr. Paul McKiernan:
I am thankful for the invitation to address the committee on the heads of the Bill. I am accompanied by the following: Dr. Eugene Hendrick, a senior inspector with the forestry service who also deals with climate change, among other matters; Mr. John Muldowney, who provides the agri-scientific analysis to my division; and Ms Margaret Murray, head of the climate change section.
The heads of the Climate Action and Low Carbon Development Bill provide for sectoral roadmaps to be developed that will, in turn, inform the development of a national low-carbon roadmap. The Minister for Agriculture, Food and the Marine has been requested to prepare such a sectoral roadmap for agriculture, and in this regard the Department has commenced its work. As outlined, we will be liaising with colleagues in other Departments on cross-cutting issues. The Minister welcomes the inclusion of the director of Teagasc as an ex officio member of the proposed expert advisory body to be established under the heads of the Bill. The Department looks forward to working with the Department of the Environment, Community and Local Government to see how it will pan out.
While we understand that the principal focus of the first sectoral and national roadmaps is likely to be on the challenge facing Ireland in the more immediate term in meeting the 2020 targets, we are also conscious of the need to take a long-term view of how the agriculture sector will develop right out to 2050.
In 2012, Teagasc prepared a detailed marginal abatement cost curve, MACC, study, which outlines its analysis for cost-effectively mitigating agriculture emissions to 2020. In response to the recent NESC final report on the climate challenge, Teagasc has commenced a qualitative assessment of pathways towards a carbon-neutral agriculture sector by 2050. Teagasc expects to have this work completed during the summer months, and this will be valuable in informing the Department's preparation of the first sectoral roadmap and the overall national roadmap.
The heads list a number of important factors to be considered in developing the sectoral and national roadmaps, and these include: the need to promote sustainable development; the likely economic impact of a national or sectoral roadmap; the need to secure and safeguard the economic development and competitiveness of the State; and the need to take advantage of economic opportunities both within and outside the State. As regards sustainability, the European Commission's joint research centre has found that Irish dairy production has the joint lowest carbon footprint in the EU, along with Austria. The footprint of Irish beef is also below the EU average.
The Food and Agriculture Organization of the United Nations has found that the temperate grassland production system, which is the predominant system of production in Ireland, is the most efficient type of food production system in the world. A joined-up approach that features sustainable growth, allied to smarter, greener agricultural systems, is key to the continued expansion of the sector. The benefits will include achieving economies of scale, lower carbon footprints on a per-unit-of-production basis, and progressive protection of the environment when the system is well managed and monitored. The current Common Agricultural Policy negotiations are at a very sensitive stage. The Department will utilise the new policy, particularly through the next national rural development programme, in order to help Irish farmers achieve the widest possible level of implementation and adoption of effective mitigation measures and thus improve efficiency even further.
My division has supplied briefing notes to members. They will see that the agriculture sector is extremely important to the Irish economy. According to 2012 statistics, it provides 8% of total employment, 7.7% of GVA and 10.8% of exports, or €9 billion in monetary terms. Significant economic employment and rural development benefits continue to accrue to Ireland from the sector. These are set to expand further with the rolling out of Food Harvest 2020, reform of the Common Agricultural Policy after 2013, the lifting of the milk quota restrictions in 2015 and the opening of new markets. However, we need to be resourceful both to retain existing markets and open new ones. Anything that can provide a competitive edge must be grasped with both hands. The sustainability and carbon agendas are areas in which Ireland can do well by building on our natural advantages and agri-food strengths.
In June 2012, Bord Bia launched Origin Green, a national sustainability development programme designed to help Ireland to become a world leader in sustainably produced food and drink. It is intended that 75% of Irish food and drink exports will be sourced from companies participating in Origin Green before the end of 2014. Some 254 Irish food and drink companies are already registered to participate in the programme. This represents more than 70% of Ireland's existing food and drink exports.
At farm level, since May 2011 over 43,000 participants in Bord Bia's beef quality assurance scheme have participated in a sustainability survey as part of their regular farm audit. Ireland is the first country in the world to assess the footprint performance of farms on a national scale. Similar programmes are planned for the dairy industry, poultry production at both farm and processing levels, and pigmeat and lamb production. It is intended that all this work will be completed by the end of 2013. Projects are also being planned for grain and horticulture.
The 2009 effort-sharing decision included agriculture in the non-ETS category, and tasked Ireland with a very challenging 20% reduction target for the combined sectors of transport, energy, the built environment, waste and agriculture. We must face up to the reality of this decision and try to reach the targets that were set. However, it is vital that we continue to make the strong case both at EU and UN framework convention levels that there is inconsistency in this rather blunt approach to target-setting as far as agriculture is concerned when placed in the context of the worldwide demand for increased production of food.
We have been working closely with the Department of the Environment to explain the particular nature of the Irish greenhouse gases profile to the Commission.
As a result of this work, the Commission understands and acknowledges both the nature and carbon efficiency of the agriculture sector in Ireland as well as its economic and social importance. The Department is finalising material for the Irish agriculture response to two recent European Commission documents. These are the Commission's Green Paper, A 2030 Framework for Climate and Energy Policies, and The 2015 International Climate Change Agreement: Shaping international climate policy beyond 2020. Our material will feed into the national response to both papers, which will be provided by our colleagues in the Department of Environment, Community and Local Government as the lead Department.
It makes no sense to set future targets that could lead to a reduction in production in an agriculture system recognised as one of the most efficient in the world. Such an approach carries the very real risk of carbon leakage whereby production would be taken up by less sustainable systems in other parts of the world with consequent overall increases in global emissions. A fundamental objective of the United Nations Framework Convention on Climate Change, or UNFCCC, is to stabilise greenhouse gas concentrations in the atmosphere at a level which avoids dangerous anthropogenic interference with the climate system. Article 2 of the convention states that a stable level should be achieved within a timeframe sufficient to allow ecosystems to adapt naturally to climate change to ensure food production is not threatened and to enable economic development to proceed sustainably. Food security is clearly at the heart of the founding principles of the UNFCCC. The human population is set to rise by an additional 2 billion to 9 billion by 2050. The European Commission's 2015 staff working document on the Commission's discussion papers notes that by 2030 the population is set to increase to 8 billion and that it is expected that there will be a 50% increase in demand for food by that year. The document indicates that agricultural productivity and production must continue to increase to feed the world's growing population.
All land use activities should be considered in the context of moving to a competitive low-carbon economy, including forestry. Forestry is one of the very few sectors which demonstrates a significant capacity to achieve national emission reductions. Forestry planting rights have a critical bearing on overall carbon neutrality through carbon sequestration. In addition, the increased sustainable use of domestically harvested wood products and the use of wood fuels as an alternative to fossil fuels can also limit emissions and enhance the removal of greenhouse gases from the atmosphere. By the end of 2012, forest cover in Ireland stood at almost 760,000 ha, 11% of the total land area of the country. In recent years, afforestation has been almost entirely carried out by the private sector with the support of State grant and premium schemes. The most recent afforestation figures show that 6,653 ha were planted in 2011 while 6,652 ha were planted in 2012. The majority of afforestation is carried out by farmers. In 2011 and 2012, 94% of all new planting took place on land owned by farmers. Just 6% of planting took place on land not owned by farmers.
The Department is contributing to a working group chaired by our colleagues in the Department of Communications, Energy and Natural Resources to develop a national bio-energy strategy. The work is expected to be completed during the summer. In framing the strategy, consideration will be given to maximising the opportunities from within the agriculture and forestry sectors to contribute to the renewable energy targets for 2020 and beyond. This includes the use of agricultural waste, energy crops and forest residues. Ireland is to the forefront of research aimed at reducing greenhouse gas emissions from agriculture. Internationally, the Department represents Ireland on the governing board of the joint programming initiative on agriculture, food security and climate change and the global research alliance on agricultural greenhouse gases. Ireland is a founder member of the Global Research Alliance, the objective of which is to pool the resources of like-minded countries to enable the agriculture sector to continue to reduce emissions. In 2012, Ireland became a founding partner of the new partnership on benchmarking and monitoring the environmental performance of livestock supply chains of the Food and Agriculture Organisation of the United Nations.
Since 2005, the Department has made awards totalling more than €20 million on domestic climate change related projects. Last November, €2.7 million was allocated to projects on aspects of sustainability and climate change, including sustainable nitrogen use and sustainable ruminant production and life cycle analysis. It is vital that the results of this research are put into practice at farm level to guarantee the supply of sustainable food into the future. The Department has developed and funded schemes to incentivise farmers to learn about the best practices in farming. These include the dairy efficiency programme and the beef and sheep technology action programmes. Teagasc and other private advisers are key to providing an advisory service to farmers.
Ireland currently produces enough food to feed a human population of well in excess of 30 million people. We export up to 85% of our agricultural output. Irish farmers know very well that they are custodians of the Irish countryside for future generations. Food production is at the heart of the global climate effort under the UNFCCC, and Irish agriculture is above all about sustainable production of food. In national policy formulation, decisions should be informed by our well-earned world reputation and our proven performance as one of the most efficient food production countries. The Irish agrifood sector must continue to produce more food more efficiently in carbon terms. National climate policy should support and enhance that effort.
Mr. John Fearon:
I wish to speak to heads 3, 4, 7 and 17 of the Bill, which deal with the development of strategy, the link to international commitments and the preparation of a roadmap. Clearly, the legislation is ambitious, which is necessary, and for many reasons it is expected to be particularly challenging for the transport sector. I hope that putting that in the context of the heads of the Bill will be of some assistance. On an important note, Ireland has achieved significant reductions in greenhouse gas emissions in recent years and is expected to comply with its reduction obligations under the Kyoto Protocol for the first commitment period, 2008 to 2012. By 2011, emissions from the transport sector had fallen to levels 22% below the 2007 peak. However, such reductions are due in large part to economic recession. Emissions from transport in 2011 were more than double those in 1990. By 2020, Ireland is required by the EU to reduce its emissions by 20% on 1990 levels. Clearly, we cannot rely on continuing recession to meet our long-term carbon reduction requirements. I hope that puts the challenge in context.
Transport is a significant sector in the climate challenge context. Emissions from the sector are almost 20% of the total. Emissions from both transport and agriculture account for almost 52% of total emissions. Significantly, transport and agriculture represent in excess of 70% of Ireland's emissions not accounted for under the emissions trading scheme. Even with the achievement of the most ambitious reduction scenarios such as renewable fuel penetration and electric vehicle roll-out for the transport sector, the Environmental Protection Agency, EPA, estimates that transport and agricultural emissions could increase by 12% by 2020. That represents the short-term challenge. For the longer term, EU leaders have endorsed the objective of reducing Europe's greenhouse gas emissions by more than 80% by 2050. In its 2011 White Paper on transport, the Commission set out a roadmap towards a competitive and resource efficient transport system. The roadmap contains 40 concrete initiatives to be implemented over the next decade to allow for the building of a competitive transport system that will increase mobility and remove major barriers in key areas while supporting growth and employment in the sector. The proposals aim to reduce dramatically Europe's dependence on imported oil in line with the wider goal of cutting carbon emissions by underpinning reductions of 60% in the transport sector by 2050.
The Bill being considered today proposes to put in place a low carbon national roadmap for Ireland. The roadmap, which is to be developed initially at sectoral level, will echo and be guided by EU initiatives, including those transport initiatives set out in the White Paper. It will have to be tailored to the Irish context to achieve the 2050 objectives. The sectoral roadmaps will also reflect existing domestic policy measures, which are already delivering considerable change. Many of these domestic measures are cross-cutting in nature. Transport accounts for one third of Ireland's energy requirement and energy related CO2 emissions, and it is vital we work closely with other key Departments represented before the joint committee today.
The main difficulty for transport is its almost total dependency on oil. Scarcity of oil and volatility in oil prices, along with environmental concerns, are acting as major catalysts in our drive towards efficiency combined with our search for viable alternatives to oil.
Advances in engine technology have provided significant dividends in fuel efficiency and, this, combined with a rebalancing of motor tax and VRT, vehicle registration tax, in 2008, has led to a major shift in the purchasing decisions of private car owners in Ireland.
Tax reform is very useful for incentivising the take-up of efficient technologies but regulation can also play a role. A good example of such regulation is the bio-fuels obligation scheme. The Government introduced a bio-fuels obligation to ensure a certain percentage of the transport fuel used in the State consists of bio-fuels. Since 1 January 2013, the percentage of bio-fuels to be contained in transport fuel was increased from 4% to 6%. It is expected that this scheme will be a key component in achieving a 10% penetration of renewable energy in transport by 2020.
Underpinning these measures is an overarching policy that seeks to develop a future-proofed sustainable transport system that serves the economic, societal and environmental needs of the country. Existing measures being undertaken and supported by the Department span the aviation, land transport and maritime sectors. They focus on encouraging smarter travel, on delivering alternative travel options and improving the overall efficiency of motorised transport in general.
In terms of smarter travel and alternative transport options, the long-term successes of the measures, while ongoing, will be very reliant on an integrated approach to transport and spatial planning. My colleagues from the Department of the Environment, Community and Local Government will be at the forefront of delivering such integration in developing a new national spatial strategy. By creating compact, accessible urban environments, people will be in a better position to walk and cycle from home to avail of local education, employment and retail services. We could also expect that people who are living in a better planned environment will be the ultimate beneficiaries of a more targeted and efficient public transport system.
The Department, with its agencies, is heavily involved in the promotion of more sustainable modes of transport through funding programmes that are delivering high-quality walking and cycling infrastructure across the country. A key goal for the Department of Transport, Tourism and Sport is to reduce overall travel demand and commuting distances travelled by private car and these types of programmes support that goal. The foregoing are just some of the measures, initiatives and programmes under way and most will play some role in the development of a national low carbon roadmap.
In drawing up the roadmap, in line with the proposed legislation being discussed today, the Department intends launching an initial public consultation phase in the summer by seeking submissions to a thematic paper on key policy considerations in the transport sector. Subsequent to this phase and consideration of submissions, the Department hopes to draw up an initial roadmap for consultation with other Departments, including those represented here today, later this year. Any measures included in the roadmap would need to have regard to other Government policies, as well as any research or data that is available on the transport sector such as the report, Ireland and the Climate Change Challenge, prepared by the National Economic and Social Council. Within the transport sphere, that report recognised the centrality of technology development, such as engine improvements, electric vehicles, gas-based vehicles and ICT, that could be exploited for the benefit of a more sustainable transport sector. Of course, we will also look to Europe and beyond and consider where we could find synergies in developments as they occur across the EU.
Achieving sustainable transport will require a suite of actions that will have complementary impacts on travel demand and emissions. This will be a challenging exercise but it is one that we are committed to undertake in co-operation with all key stakeholders and Departments to ensure we set out the necessary steps to achieving a low carbon future for Ireland.
I thank the Departments’ staff for their presentations. There is a commitment to increasing renewable energy sources by 20% by 2020 but there seems to be a drop off in reaching this target. The concern with bio-fuels is that there will be competing demands with Harvest 2020 and land use given over for bio-fuel crops, in short, food or fuel. How do the Departments see this panning out? There are also restrictions on developing marginal lands that could hamper increasing production. Renewable energy will take massive swathes of land. Across the world, there are land grabs, for want of a better term, to increase the production of bio-fuels. How does the Department see that being played out here?
What is being done to provide more public transport and decrease car usage? There have been reductions in some public transport services. Mr. McKiernan stated EU research has found our method of beef production is more sustainable. Could he elaborate on that and when will the research carried out by Teagasc and the Department on this matter be published?
Mr. Paul McKiernan:
The Joint Research Centre of the European Commission, a scientific organisation, published its findings in 2010 on different types of agricultural production in all member states. Ireland’s dairy industry, along with Austria’s, had the lowest carbon footprint and it was well below the EU average. Beef production was joint fifth of EU member states. Teagasc is carrying out a marginal abatement cost curve analysis which includes examining cost-effective mitigation, possibilities and practices with regard to the targets in Harvest 2020.
That was published in 2012. The current research it is undertaking is borne out of the NESC report, which is the genesis or thinking behind the current heads of the Bill and argues that we should move towards carbon neutrality heading towards 2050. The current research in which Teagasc is engaged is with a view to looking at different types of pathways by which Irish agriculture can move to carbon neutrality. Does that answer the Deputy's question?
Mr. Paul McKiernan:
I understand that Teagasc's work should be ready in July or August. That will inform our preparation of the draft roadmap document for agriculture. It will be developed over the coming months and into the early part of next year. Does Mr. Muldowney wish to mention the conflict relating to land availability?
Mr. John Muldowney:
The food versus fuel debate is ongoing at European level. We are working with our colleagues in the Department of Communications, Energy and Natural Resources to keep an eye on what is happening there. Regarding the Irish situation, we have grants available for the planting of biomass crops but, again, they are led by demand and, at the moment, demand from farmers to plant these crops is extremely low. Therefore, we do not see much of a conflict as yet until it evolves a bit more.
The EIA agriculture regulations place controls on how much land can be reclaimed, but there is only a strict limit on wetland that is always wet. If one is reclaiming land for the first time, the limit on that is 0.1 hectare so, more or less, one cannot do it without planning permission. After that, the threshold for drainage of existing agricultural land is 15 hectares, so it is quite high. It is unlikely that we will see in the near future a farmer in the Irish context with an average of 35 hectares planting half of his farm and leaving land reclamation in half.
Regarding Teagasc research, which was mentioned by Mr. McKiernan, the main research has been done. Teagasc published the marginal abatement cost curve analysis last April, which fed into the NESC report, and looks at the main abatement measures available to farmers at the moment. These range from extended grazing to better nutrient management to better genomic selection of dairy cow breeding. They are all cost-beneficial measures. The aim of the Teagasc advisory at the moment is to achieve a high adoption of those measures.
Teagasc is trying to produce a scenario analysis regarding the possible roads available to Irish agriculture to achieve carbon neutrality. It is looking at everything from reducing stock numbers to adoption of new technologies, including those that are too costly at the moment but which might become more cost-effective and blue-sky technology. It is 37 years from now until 2050, so new technologies will come on stream, become more cost-effective and could be a solution.
Mr. John Fearon:
There are a number of initiatives, including integrated ticketing and real-time passenger information, that encourage people to use public transport more. There is continuing investment, where possible, in public transport infrastructure such as re-signalling projects within the city and the opening of some railway stations.
In respect of car usage, much of what has been done has encouraged the move to vehicles in the lower emissions band. That has been quite dramatic. It has increased from about 12% in 2005 to over 90% now and has brought about a significant change. Initiatives like those taxation measures and the carbon tax encourage that sort of shift. In addition, what we are trying to do is to encourage people to look at alternatives for shorter journeys. Much has been done in terms of mobility management, including encouraging large employers in particular to get staff to look at options they have in terms of their journey to work and encouraging people either to walk or cycle on shorter journeys. It would make a difference if a very substantial proportion of those journeys were converted to walking or cycling.
Mr. Ken Spratt:
I think colleagues from the Department of Agriculture, Food and the Marine have answered the question about biofuels but if Deputy Stanley has any supplementary questions, we would be happy to answer them. I might ask Dr. Stjohn O'Connor to answer the question about the fall-off in energy efficiency. Dr. O'Connor heads up our energy efficiency unit.
Dr. Stjohn O'Connor:
Deputy Stanley is right. We would have seen quite a peak for the grants in 2010-2011. We would have seen approximately 45,000 applications over those two years. There is no doubt they have declined in recent years. It reflects a discussion we are having internally around this idea that we have done over 12% of the entire housing stock to include inconsistently occupied houses as well. We are still getting a consistent level of applications so it is still well north of 300 applications per week. It is just not at the level it was. The discussion we are having internally is about how we move away from the early adopters to a more mainstream approach. The programme for Government speaks very clearly about the transition from grants to sustainable financing mechanisms such as pay-as-you-save, so that is the work we are undertaking at the moment. It is something with which we are grappling. Undoubtedly, the economic environment has an influence to play. Homeowners must still find most of the money upfront. The idea is that if one transitions to a new initiative, one does not have to find that upfront capital investment but pays it back using the savings over an extended period of time. That is where we are going and what we are working towards.
I thank the delegations from the Departments for their presentations. Obviously, we have been tasked with assisting in developing this legislation or least producing a report for the Minister. It is quite important that we heard from the delegations so that we could have some insight into what these sectoral plans are likely to achieve. I favour targets but that is a separate matter. We have been told that our national ambition will be more or less demonstrated through the sectoral plans so that is why it is really important that we get this insight from the delegations.
We all own this process and it is important we engage people as much as possible, not only in how we construct this but doing it in as public a way as possible. If we are to go anywhere near meeting the targets, we will all have an input into making changes in the way people move, where they live and how industries like agriculture function.
The targets to which we made commitments in 2020 are only one step and may change. If they are going to change, they will change upwards so our ambition needs to be ambitious. We were told by the EPA last April that, based on the current Government policy, there is no conceivable scenario whereby we will be able to meet the EU emissions targets based on a 20% reduction on the 2005 levels to 2020. We already have a larger challenge and, each year, we have a challenge because the clock has not stopped ticking.
Clearly, agriculture and transport are the major areas.
Our economic ambitions for the food we produce conflict with the targets we have been set. I accept that we have a good environment for producing food. However, there is a conflict in meeting the targets while at the same time using food production as a major driver of economic growth. We are trying to open markets in China and elsewhere. I cannot see how we square that circle. While I am aware that forestry is not included as a carbon sink, what counterbalancing measures could be implemented in the forestry sector and what should we do in that regard?
We recently met representatives of the NESC. Rory O'Donnell raised a number of interesting points in regard to institutional arrangements. Have the witnesses considered the different institutional arrangements to which he referred in order that we could have a robust mechanism for feedback from industry? Perhaps it would be worthwhile sharing the NESC document with the witnesses for their consideration. We need to find a way of delivering and if it is going to be an internal process among Departments without external engagement with the various sectors, I do not see how we can involve people to the extent necessary.
In regard to transport, none of us want a permanent recession but some of the decisions made recently, such as the change to carbon taxes, have in fact gone in the other direction of being less attractive. We have been told that €6 billion is to be invested in projects. Will these projects be climate change proofed? The Dublin interconnector will be a game changer in terms of moving people from their cars to public transport. Are we likely to see that kind of ambition and will these initiatives be carbon proofed? On the one hand we are asking people to leave their cars at home but on the other, subventions are being reduced for Bus Éireann to service small rural areas. I find it difficult to square that circle. Regardless of how nice the legislation may look on paper, it will fail if it does not allow us to meet our obligations. That is the litmus test for legislation. It should be a vehicle to change people's attitudes and behaviour.
A considerable number of the people who signed up to energy saving schemes, such as retrofitting homes, had the money to match grants. The difficulty we now face is in dealing with a cohort of people who do not have several thousand euro in matching funds. It will be a task to design a scheme that gives people sufficient incentives to get involved. I have on numerous occasions asked the Minister for the Environment, Community and Local Government about the progress made on these schemes because it appears to be taking a long time to move from one scheme to another where there has been a notable fall-off in numbers.
We speak about ambition in regard to sectoral targets but I am concerned that we are not moving very fast. If we pick the right mix and make the right investments in meeting our targets for 2020, there could be a cumulative effect, but if we are dragging our feet at this stage, it is likely that we will run into difficulties as early as 2016. Are the policy choices being made by the Government likely to conflict with our obligations? What is the worst case scenario in terms of not meeting those obligations and what are the financial risks? Nothing gets people's attention like the possibility they will be hit in their pockets. If people realise the potentially serious impact of these obligations they may be more likely to change their habits.
Mr. John Fearon:
Deputy Catherine Murphy raised a number of key issues in respect of transport and made an important point about legislation as the driver of change. The legislation will drive many of our decisions over the medium to long term. In regard to investment in the transport sector generally, we are in the process of developing a strategic investment framework which will consider the issues arising while keeping a focus on the long-term objectives set out in the legislation. In the context of the immediate crisis, I can understand why every decision one would like cannot be taken now but our planning and focus on future investments remain in place. Our decisions on strategic investments will be critical in this regard.
In common with other Departments, we are acutely conscious of the need to involve people in this process. We expect to publish a paper in the next few weeks, following which we will provide for a consultation period of at least eight weeks, and hopefully longer, to allow people to respond. As the Deputy acknowledged, the level of change required is significant.
On the taxation issues, I hope they are continuing to have the appropriate effect. Efforts have been made to maintain the differential between high and low emission vehicles and to encourage people to invest appropriately when purchasing a vehicle.
Mr. Ken Spratt:
Turning to Deputy Catherine Murphy's question on the need for urgency, I fully accept that. I suppose we, in the Department of Communications, Energy and Natural Resources, were focused on renewable electricity and energy efficiency because we are mindful of how that can contribute to lowering greenhouse gas emissions. As I mentioned in my opening address, we are also focused on post-2020 and what is the 2030 climate and energy framework and we are working in collaboration with the European Commission and other member states on what would be appropriate for us. However, all of that must be based on sound modelling. There is, in head 5, a provision which requires the sectoral roadmaps to have regard to the economic impacts and to really understand what are those economic impacts. The last thing the Department would want is to deliver very ambitious options for the Minister to consider in the sectoral roadmap only for them to be accompanied by an expensive price tag which could impact on energy security and competitiveness. While I accept that there is a need for urgency and we are seized of that, we need to get this right because of the potential impact on energy security and energy competitiveness.
Deputy Murphy referred to the institutional arrangements proposed by Dr. Rory O'Donnell. I would be delighted to digest those and come back to the Deputy with some thoughts on them. On my Department's side also, she asked why is there the transition from grants to pay-as-you-save, and all the difficulties with that. I might ask Dr. O'Connor to take that.
Dr. Stjohn O'Connor:
I am minded of the Deputy's concerns in previous parliamentary questions in this regard.
While it might seem it has taken a long time, a huge degree of complexity goes into a pay-as-you-save, PAYS, scheme. If we take a step back, PAYS as a concept is fine, but PAYS has never been implemented anywhere in the world to meet the parameters of the concept. The project team is examining and testing those parameters and fundamental constructs. They are going into the minutiae of how things stack up because PAYS works on the basis that this measure being installed will save one a certain amount of money, which one then uses to pay back the cost of installing that measure in the first instance. Given the situation with our banks, it is a very complicated proposition. It is a new way of lending, but it is lending and that is the challenge.
Deputy Catherine Murphy is correct; not everybody would be in a position to benefit from the programme. With my other hat on, those in energy poverty are definitely not suitable candidates for a PAYS scheme. They are excluded from the first round of consideration but there is a programme in place that targets them. The better energy warmer homes programme has retrofitted 100,000 low-income houses. That is how we will proceed in respect of that group.
The project team developing PAYS is working away, is very well advanced and has produced a number of documents. It is undertaking a very different way of engaging with stakeholders for that project team. All the documents are automatically sent to all stakeholders as soon as they are done, so the project team for a number of different documents receives them at the same time as everybody else and that is done very deliberately because the concept of PAYS will work only if everybody is pulling in the same direction. While we have a project board that represents everybody in the industry and consumer association, it is still important we get the wider community on board, otherwise PAYS will never be a success. The formal consultation process begins in July and then the project team aims to report back to the Minister at the end of August or the start of September. The Minister will digest that and bring it to the Government soon afterwards.
Deputy Catherine Murphy mentioned the risk of not meeting the target. The energy efficiency target is an indicative target. It is the only target that does not have a statutory obligation underpinning it, so there is no cost to Ireland. However the energy efficiency directive introduced at the end of 2012 directs the Commission to review progress in 2014 and come back with options if it thinks member states will not hit that 20% target. Under that directive all the member states have had to report back to the Commission in April to say what the national targets are, and that will inform that piece of work. Ireland reiterated that we are committed to that 20% target and a 33% target for the public sector.
Mr. Paul McKiernan:
Deputy Catherine Murphy mentioned the recent EPA figures. That is a forecast, a view of how the EPA sees things now. It is a different forecast from last year and will probably be slightly different next year. Nevertheless the message is there and we know there is a challenge. The Department of Agriculture, Food and the Marine, and all the stakeholders are aware that there is a real challenge for Irish agriculture to ensure that achieving the targets in FH2020 is done with the lowest possible carbon footprint. On the Deputy's specific questions on forestry, I will ask Mr. Hendrick to reply, and Mr. Muldowney wants to speak a little on that challenge of the EPA figures.
Mr. Eugene Hendrick:
It is correct that forestry is excluded from the targets in the effort sharing decision of 2020. However we envisage that forestry would be a significant part of the sectoral roadmap regarding sequestration and other benefits of forestry. As we said in our opening statement, there are three aspects to the forestry component of climate change mitigation - sequestration, the trees growing and taking carbon out of the air; renewable energy, substituting biomass and forests for fossil fuels; and substitution of wood products for more energy-intensive materials.
There is very significant use of wood biomass for energy generation in Ireland. We estimate the forest harvest at approximately 3 million m cu. m per annum and approximately one third of that is used for energy generation. That is mainly in the forest product sector itself, for process heating and so on, but there is a very large increase in the use of wood fuels both domestically and in other installations. We estimate that wood use is saving approximately 300,000 tonnes of CO2 emissions per annum. Otherwise that would be fossil fuel generated.
The Department has a number of initiatives under way on the use of forest biomass as a substitute for fossil fuels. Much of this material is small dimension thinnings coming from privately owned forest that were planted over the last 15 to 20 years and are coming into the management stage. There is a forest road grant scheme geared towards first thinning that is helping mobilise this material into the energy sector and other end uses such as sawmills and board milling. That scheme is in place under the current forestry schemes. We are also funding research into the supply chain in the wood energy sector because that is a new area. We have a very large project that is being carried out mainly at Waterford Institute of Technology that is examining the costing of harvesting wood fuels and how we can improve on that and become more cost competitive in that area.
We also provide information to the sector via a website called woodenergy.ie. I do not know whether the members are familiar with that but it is available to the public and offers advice to people in the supply chain on how best to source and use wood fuels. Working with the Irish BioEnergy Association we provide grant aid to the wood fuel quality assurance scheme, which is geared towards companies that want to reach a certain standard in their supply of wood fuels that would give assurance to the public on the quality of their fuels. We have a number of measures around the wood fuel area because we think it is an important area for future climate change mitigation.
The private sector is one area where there will be an increase in supply of forest materials over the next 20 years. We estimate that the current harvest of approximately 3 million m3 will increase to 6 million m3 by 2028 or 2029. Most of that increase will come from the private sector and a significant proportion will go to the energy side. It is important therefore that we have a good profile on the thinning of our private plantations and supplying it to the energy sector. This will lead to benefits, not just for the energy sector but for the wider forest sector in terms of material that will flow into sawmills and boardmills, because if one thins the plantations the trees grow to larger sizes. It is an integrated policy on the management of our forests regarding energy supply.
We will examine the sequestration side regarding the sectoral road map and the Department of Agriculture, Food and the Marine. Because we have a young private forest sector that has been established in the last 20 years, this is taking much carbon out of the atmosphere. That will be an important element regarding the Department's sectoral plan.
The wood products aspect is important because substituting wood for other materials is an important long-term goal and we are working through the timber standards consultative committee of the National Standards Authority of Ireland on wood standards, putting in place various improvements in standards which would help to encourage the use of wood as a long-term replacement for energy-intensive materials.
We have the EPA figures and Teagasc also has its own projections. It should be borne in mind that some of them are pre-abatement. Teagasc has identified that there is abatement potential of up to 1.1 megatonnes, provided the most efficient practices are adopted but that needs more engagement by farmers to use these practices, which are not just environmentally effective but also economically effective.
Mr. John Muldowney:
Teagasc, through its MAC curve, has identified a number of abatement options that would potentially yield 1.1 million tonnes of CO2 savings from agriculture. The question for us is achieving that abatement potential from agriculture. That is critical and we will try to avail of our advisory service through Teagasc and private planners to ensure better uptake by farmers of these technologies.
In terms of raising awareness among farmers, Bord Bia, through its carbon navigator and quality assurance scheme has more than 40,000 beef farmers involved and it is linking this back to make the farmer believe this is important for the green credentials of the produce he is selling. We are working from every angle to encourage the adoption of the navigator by farmers.
Teagasc has done a great deal of research to come up with this abatement. The Department is heavily engaged in providing research funding to both Teagasc and universities to increase our understanding of the mitigation potential available in agriculture. One of the larger projects we have engaged in is the greenhouse gas network, which is trying to look at carbon and nitrous oxide pools in soil to better understand what is happening there, with a view to try to account for the carbon sinks in the permanent grassland, which extends over 3.6 million hectares. This is part of the long-term view and, hopefully, that will help to feed into the recent decision at European level on Land Use, Land Use Change and Forestry, LULUCF, accounting and a mechanism for that.
We visited Bonn as the beginning of June and were heavily engaged from the agriculture point of view in trying to prepare for where the accounting system and discussions on agriculture can potentially go. We were lucky enough to get a decision on agriculture at the scientific body in the international negotiations in the second week of June. We are pleased with that. That will look at adaptation in agriculture and adaptation co-benefits and that will include mitigation. It is again about trying to look at a long-term goal. All parties subject to the UNFCCC are asked to submit ideas on where they think adaptation in agriculture and adaptation co-benefits could go. We will be interested in looking at that.
One of the issues that delayed progress on agriculture at the international level is many countries are concerned that agriculture will be relegated to a mitigation option and food security is not something they want to sacrifice just for mitigation. Some of the larger countries have under-nourished populations and if Ireland reduced food production because it would achieve the goal for us, it would be detrimental to the populations in these less developed countries. They are worried about that and that is why the focus is on adaptation and the importance of agriculture in the communities of these countries. There is an important social dimension to that. We are working on every aspect.
Reference was made to the competition in land use between energy crops and food crops. There is no interest on the part of farmers in going down the route of energy crops required for bio-fuels and, therefore, they are deciding that pasture land and so on is a priority. Considering our targets for the use of bio-fuels and where we get the necessary crops from, that means we will have to go outside the jurisdiction. How far do we go? At that point, we are increasing our carbon footprint by importing such crops to blend bio-fuels.
In east Africa, people who were growing food crops through coercion on the part of authorities or for whatever reason are now growing energy crops but that means they are not being fed. Are we going to pursue our bio-fuel targets without due regard to that issue? In addition, those crops are being transported to Europe. Has cognisance been taken of that issue, which has been raised by aid and voluntary organisations abroad who witness on the ground the devastation being created by us pursuing that policy?
The transport sector is the most challenging. While I welcome the improvements in public transport, provision is not a reality in rural Ireland. While the main improvements in rural Ireland have been east-west or to the main centres of population, those journeys can still be a considerable distance, people would have a diminished lifestyle if they did not get into a car because of the poor public transport system. Cycling is impossible and the other initiatives being pursued will have a limited impact on people sitting into their cars. The problem with the use of oil, particularly for transport, bearing in mind the cost of batteries and the lack of confidence in the distances to be travelled in rural Ireland, will not be overcome unless there is a realistic alternative when one goes to a forecourt to fill up. That is why I am interested in gas-based vehicles as at least an interim measure. I understand that in the US there are proponents of a device that can be fitted on any vehicle for €100 to allow it to be modified to use either fuel. Is that being considered to be made mandatory in the State or has it been examined to give people an alternative?
As we strive to reduce carbon emissions, we are going to diminish people's quality of life, particularly in lower socioeconomic groups, who find they have to pay carbon taxes but they have no public transport alternative or they cannot afford to change their heating system. They are limited in what they can do. We should temper anything we attempt to do with the reality that faces the ordinary person who is struggling.
I concur with Deputy Mulherin's comments. We need to be a little careful before we rush into this because it might not be that simple for people in living in certain areas of the country.
With regard to abatement in the agriculture industry, I have followed the issue of anaerobic digestion for ten years but nothing has happened in this regard, particularly in the use of animal slurry. The benefits of addressing this is that the slurry would not be left in a tank stewing and pumping carbon into the atmosphere.
There are many other environmental benefits arising out of it, such as lessening by a considerable degree the chance of polluting water courses. There are thousands of plants for anaerobic digestion all over Europe, particularly in Austria and Germany. What is this country doing and what is the Department doing in respect of making this possible, because it is possible in other countries? If one can take a potentially harmful product, turn it into methane or bio-gas and be left with another by-product called a digestate that one can spread on the land and that has similar properties to bag fertiliser when it comes to fertilising land, surely we need to move in that direction. I am sure the Department is aware of the facility in Callan on the Tipperary-Kilkenny border where this is practised. It has not spread and I suggest that one of the reasons it has not spread is because people are a bit paranoid about waste management facilities being beside them. Given that the technology is proven and we do not need to pilot it anymore, has the Department considered going down the route of getting communities to do it themselves in a co-operative sense? This way, they do not see an advertisement in the paper telling them that an anaerobic digester is on the way; one week later, that an incinerator is on the way; and another week later, that something even worse is on the way. Has the Department looked at this because there is a massive resource there? When I looked at it originally, I found that something like one million tonnes of cow slurry are produced in County Roscommon every year. The potential for environmental damage and the loss of the potential for bio-gas is massive. What are the Department's plans in this regard?
I am loth to use the term "waste management" because it is a disgusting term. It should be renamed "resource management" because nothing is waste at this stage. We can reuse it. It is a debate that has become completely silent among politicians. I do not know whether it was debated more than ten years ago because powers were being taken off politicians in respect of the issue. Now that we seem to have got over the fact that we have lost those powers, we do not discuss it anymore. When it comes to climate change, one of the most important things is how we use our resources and the energy that goes into them. From the perspective of incinerators versus mechanical biological treatment, it seems we are going down the incinerator route. How does that fit with us reducing our carbon emissions? I know people will say it is better than landfill. Of course it is because anything is better than landfill. That was not even a technology. It was the technology of a dog burying his own dirt. What are the plans for that area? Some people will say it is better to put it in an incinerator and burn it to get energy rather than put it in landfill and get nothing out of it. One would get energy if one burned €100 bills as well but it is not a good enough argument to say we should burn them because we would get energy out of them. What is the Department's thinking on this because incineration is not sustainable? I will not go into the health aspect of it but from the point of climate change, incineration does not make sense. Incineration is based on the idea that there are infinite resources that we can keep burning, that they will go away and that we will pretend they do not exist anymore.
Perhaps somebody here could establish what a carbon tax is about because I was of the opinion that a carbon tax was something imposed on society and the money raised out of it was used to change habits. In other words, the money would be ring-fenced for public transport subsidisation and used to fund the transformation of houses into passive, carbon neutral houses. In the past month, I was involved in an argument with a member of the Green Party who told me that this money, remarkably, is for education, hospitals, etc. Perhaps I have got it wrong. What is the carbon tax for? If it is what I think it is, it is a very good idea in that while one is putting an extra financial burden on people, at the other end of the scale, their houses become less expensive to heat and it becomes less expensive to travel on public transport so it turns out to be revenue neutral for people. However, it appears this is not the case. It seems - I could be wrong - that the carbon tax is being used as another way to gather revenue to pay back our massive debts.
I have a suggestion in respect of the payment of the fuel allowance. At the moment, people in receipt of the allowance get it on a drip-drip basis, week by week. Could the Department look at giving it in a lump sum so that people could insulate their lofts and heat their houses for much less and there would be more gains the following year? I also picked up on the idea that we must all live very closely together. There appears to be a philosophy among environmentalists that we must all get out of the countryside because to get there requires energy and damages the planet so we should all stay away from the country and live in nice, compact units. That will be a massive struggle because we do not want to do that so one will have a big job changing that.
I am sure Dr. O'Connor knows this area inside out but something he said chimed negatively with me. What he said suggested that a considerable amount of box ticking is taking place. When a question was asked about what might happen if we do not reach our targets, Dr. O'Connor said there would be no cost to Ireland if we do not reach them. Is it about giving the impression that we are doing the right thing or is it about actually doing the right thing? Ultimately, it will be a cost to Ireland. Is it just the cost of looking bad or of not ticking a particular box about which we are worried? The philosophy should be that we should not have to be forced to do this. If we are going to do it and do it successfully, we must willingly do it ourselves. If we are going to do it on the basis that Europe or someone else makes us do it, we are less likely to do it. The best opportunity for success is for us to want to do it, for us and the Department to create the environment where it is easy for people to do it and where there is more of a focus on the idea of resources and not wasting resources. I fear that environmentalism is a dirty word, which is sad given that we have only one environment in which to live. I hope the Department will go about changing that attitude. There are ways to do that. That is my tuppence worth.
We are sitting beside each other, this is the Oireachtas environment committee and we are all here to discuss the Climate Action and Low Carbon Development Bill. We all accept that the environment is the most important aspect of any policy decision that we will make for a sustainable future for our children and grandchildren.
In respect of the 2020 renewable energy target for wind energy, which is very topical and contentious, I read in last year's document that we are 630 MW behind the target set out in the national renewable energy action plan outlined for 2012 and that we would need to increase our wind power by 250 MW per annum to reach the 2020 target. How are we going to do that? Educating the public is very badly needed. What are the fines, if any, if we do not reach our targets?
On transport, while the base has increased from zero to 2% all over Europe, it is still poor. Electric cars can only do so much. What other actions in the area of transport are we not taking that, in Mr. Spratt's view, we should be taking? Is there any particular action he believes we should prioritise? Given this is a huge issue in respect of which progress is very slow, what would be the first thing the delegates would do that would cost the least amount but have the most effect?
There has been little policy Europe-wide, although not in Ireland, on the heat element of renewable energy. What can be done to advance this? As I understand it, the 2012 EU directive on renewable targets explicitly includes heating and cooling. I agree solar and thermal energies are great and that the old argument that we do not get enough sun in Ireland to make these worthwhile no longer stands up. Is it worth promoting these big time or would that be too expensive to do? As I understand it Ireland is also falling down in this area.
Deputy Luke 'Ming' Flanagan mentioned anaerobic digestion and waste to energy. The potential of this source is not being fully utilised. How can we do more in this area? We are a dairy producing country. The Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, will address a conference tomorrow in Dublin Castle. The Irish dairy industry has the lowest carbon footprint in the world.
Yes, sorry, in Europe. That is a proud boast. As stated by Mr. McKiernan, setting targets is good but they should not be set at the same level for every country. For example, why should Ireland be penalised if a particular country does not meet its targets? In my view, we would be being penalised for being too good. One must balance the argument of targets against what works in a particular country. There is a need for further dialogue around the targets issue versus what and how we are doing, if it is working and if we are going to continue to penalise ourselves by setting extreme targets in a particular area while another country makes no attempt to achieve its targets. I am speaking in this regard about Europe rather than the rest of the world.
As stated, we are working towards carbon neutrality. I come from a farming background. How, given one cannot modify methane gas emissions from cows, is it proposed to make cows carbon neutral? We are doing well in the area of wood to energy. Given current planning exemptions in respect of the construction of 40 ft extensions many people are now installing solid fuel burning stoves. Planning regulations have not yet caught up with the mass of fuel burning. There is a need, because emissions from what is burned in stoves is often unpleasant, to ensure chimneys are erected to at least two-storey level. They should not be permitted on extensions.
On the new accounting rules and how they will affect us in the context of crop lands, grazing lands and so on, how we propose to deal with this is a huge issue for Ireland. It is one of the major issues with which we have to deal in the energy and climate change area. I would welcome a comment from the delegates on the implications for Ireland of not meeting the changes to the energy efficiency directive. Also, perhaps those of the delegates who can attend the conference in Dublin castle will do so.
Mr. Ken Spratt:
A number of questions have been asked which we will try to respond to. On Deputy Mulherin's question in regard to indirect land use change and concerns around land use change from food to bio-fuel crop production, this is a matter dear to the heart of the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, in particular as he chaired the Council of the European Union. It is an issue that arose throughout the Presidency. Given that Ireland was chairing the Presidency it had to take a neutral and a facilitative approach. However, the Minister has arranged for a UN expert to address the energy working group this week to ensure that the message of the impact of this gets through not only to the attachés but to the permanent representatives in Brussels. We will be wrapping up with a progress report on that particular legislative file. It has been a difficult issue. The matter raised by Deputy Mulherin has been to the fore of all Ministers' minds.
As things stand, some member states have invested heavily in infrastructure which would assist in the use of primary bio-fuels. The proposal is that this would be limited to 5% of the 10% target. In other words, only 5% from primary fuels would be allowed and there would be a greater focus on secondary bio-fuels, including from waste, straw and so on. It is hoped we have been able to steer this in a way that will address the concerns expressed by the Deputy and the Ministers at the Council of Ministers meeting.
On the fuel allowance, Deputy Luke 'Ming' Flanagan suggested that a lump sum rather than drip by drip approach be taken in this regard. That is something that could come into the mix in discussions with the Department of Social Protection. The Minister, Deputy Rabbitte, is very interested in teasing out with the Minister for Social Protection if there are better ways of spending the money currently being spent on the fuel allowance in order to facilitate greater energy efficiency. We have opened up dialogue in this regard with the Department of Social Protection.
Mr. Brian Carroll, who heads up our renewable energy division, will address the question about incentivisation of anaerobic digestion, which was raised by Deputy Luke 'Ming Flanagan and others. Dr. O'Connor will then try to address the question of energy efficiency and not just ticking the boxes.
Mr. Brian Carroll:
Deputy Mulherin raised the issue of Ireland growing its own bio-fuel crops and Deputy Luke 'Ming' Flanagan asked about anaerobic digestion. Currently, we are finalising a bio-energy strategy which is due for publication in the near future. One of the key issues with which we are dealing in this regard is that of demand stimulation. We already have in place the tariff support scheme, REFIT 3, the aim of which is incentivise an additional 310 megawatts of renewable electricity biomass capacity to the Irish grid, some 200 megawatts of which will be in anaerobic digestion and solid biomass. There is a range of tariff supports across these technologies which are aimed at incentivising the growth of crops and use of the technologies referred to by the Deputy.
Dr. Stjohn O'Connor:
I would like to respond to three particular questions. On Deputy Luke 'Ming' Flanagan's question, I may have misspoken in that there is no financial penalty for non-compliance. The Deputy is correct that there is a huge economic benefit for us to deliver the 20% efficiency. Energy efficiency makes sense. It is the primary priority of all energy policy. From a competitiveness perspective, it is key. The Energy Efficiency Action Plan includes figures on what it would mean to Ireland Inc if we were to deliver the 20% target. I do not know those figures off the top of my head but will ensure a copy of the plan is forwarded to the committee.
Deputy Michelle Mulherin had a point about the single payment, which is an issue. Mr. Spratt has mentioned that the Minister, Deputy Pat Rabbitte, is having that discussion. From our perspective, we are examining technological solutions that may overcome the hurdle of a single payment to buy fuel. There were some interesting programmes that we funded via the Sustainable Energy Authority of Ireland and these have been pay-as-you-go oil solutions, which are interesting. It takes the need for a fill of oil from the home owner and people are only paying for what they use. It is like topping up mobile phone credit and is a really interesting solution. Problems are being worked out. We funded a pilot project last year in Northern Ireland and are funding a greater pilot project this year. I have high hopes we can overcome the barrier on the single payment and moving to a pay-as-you-go option in the oil sector, which is a much better solution that allows people to manage consumption much better than a single payment. It is an interesting area on which I am happy to make more details available if members so wish.
The energy efficiency directive was mentioned and I am happy to say I will be attending on Saturday. The energy efficiency directive covers a multitude of issues, the most relevant being that national renovation strategies must be put in place, as well as obligations on energy suppliers - the main part of the energy efficiency directive, with everything else wrapped around this.
I have also mentioned energy performance contracting. Yesterday we launched the exemplar projects that will test a new energy performance contract and framework. That work will be ongoing in the next couple of years. Effectively, we are producing national handbook on different ways of procurement. We are already well ahead of the game in that respect. There is another issue concerning combined heat and power, CHP, systems and ensuring they are taken into the generation mix.
I will focus on Article 7 as being key. It puts large targets on energy suppliers to deliver energy efficiencies. It is small but complicated and the interpretive note runs to 60 pages. We are considering it because we have 19 energy suppliers signed up to energy saving voluntary agreements covering electricity, gas, solid fuels and oil. This is one of the only countries in the world with that mix taken into account. The issue for us is whether the existing scene should continue or migrate to something new after 2013. That issue is before the Minister.
Dr. Stjohn O'connor:
The public sector is really interesting and probably an area in which I do not get to spend as much time as I would like. We have a 33% energy efficiency target in the existing energy policy framework and in the past couple of years, with the SEAI, we have been collecting all of the gas and electricity meter points, the idea being that if we can measure exactly what the public sector consumes, we can start to target it specifically. This has not been done anywhere else in the world. This year we will be producing an annual report or, effectively, a set of league tables around the high energy users in the public sector. That is all based on our being able to collect the data. It is a significant project and every year it will get better, with more meter point reference numbers and gas point registration numbers, giving a more comprehensive picture of energy consumption in the public sector.
Mr. Ken Spratt:
The Senator asked two other very important questions on the non-achievement of renewables targets. We are behind and have much catching up to do. Before turning to Mr. Carroll who will address the issue of how we catch up, the Senator asked about the costs associated with non-achievement. We understand from the SEAI that the costs will be significant if the targets are not reached; these relate to non-compliance and emissions permit purchases. The SEAI has estimated that the figure could amount to between €100 million and €150 million per annum for each percentage point. These are very significant costs and we are seized of the potential cost that would come with this. I will turn to Mr. Carroll to let the committee know what we are doing to ensure we can catch up.
Mr. Brian Carroll:
There are two legally binding targets. These are the overall 16% target for renewable energy and a 10% target for renewable transport. In terms of the target breakdown, we are aiming for a figure of 40% in the case of renewable electricity. We are at a figure of approximately 20% at this stage.
The Senator raised a specific point about being behind where the national renewable energy action plan stated we might be. Some of this is linked with the timing of the roll-out of the grid. There are enough megawatts in the pipeline to connect and that will happen as the grid is rolled out. We see ourselves as being on target to hit that 40% figure.
The transport target is 10%. We are at a figure of 3%. The Senator specifically mentioned electric vehicles, for which there is a grants scheme in place. Unfortunately, the take-up to date has not been that large, with approximately 400 electric vehicles on the road. Most of the target will be met using bio-fuels.
The final target is for renewable heat - 12%. We are at a figure of 4.8%. I have mentioned some of the REFIT 3 demand stimulation measures we have in place and we will shortly introduce a bio-energy strategy to address some of the issues involved.
Mr. John Fearon:
Deputy Michelle Mulherin raised the matter of rural transport, an issue on which the Minister of State, Deputy Alan Kelly, is working very closely in trying to maximise what can be done with the available funding. The Deputy mentioned the issue of having a realistic alternative, on which we must continue to work. The possibility of having gas-based vehicles has been recognised and recommended by the National Economic and Social Council, as well as the concept of working towards the use of alternative fuels, either through decreasing the amount of traditional fuels or encouraging people, where possible, to use vegetable-based fuel, etc. where engines can cope. There are no proposals to make this mandatory, but we are conscious of the matter.
With regard to legislation, the Deputy mentioned being conscious of the impact on ordinary people. That strikes home in the transport sector. In the initial presentation I tried to outline the scope of the challenge. In trying to meet it there is no single identifiable solution. Therefore, there will be an impact on a great number of people in many areas, of which we should be conscious. That is why the concept of consultation and setting out the complete programme will be very important in the coming months.
Deputy Luke 'Ming' Flanagan mentioned the carbon tax and how it was used. From our perspective, the benefit we see is in how the taxation influences behaviour. Whether it is used to reinforce this in specific ways is another consideration. The use of the taxation regime to influence what people do has been important to date and will be a very important tool available to us in the future.
I was taken by the comment that not everybody wanted to live too close to others. That puts the finger on the particular difficulty, as what is set out in the Bill in the case of transport and other sectors is very ambitious. It will simply not be possible to get there through measures that are both popular and low-cost.
The package employed to reach the targets that are envisaged must encompass a very wide range of measures.
With regard to transport, an efficient public transport system would greatly encourage people to live in more densely populated communities but it is not a solution for everybody. We must introduce a suite of measures that will help us reach our targets. We also hope that the move towards low-carbon living will be an opportunity to create a niche market that will drive employment and create other benefits. Such initiatives have been recognised at a European level and it is important that we do not lose sight of it here. The level of change is very significant and the costs associated with the transition are not insignificant. Therefore, we must look beyond environmental benefits and at other benefits that will arise.
Senator Keane mentioned transport priorities. In response, my colleague spoke about alternative energy and how to boost the use of electric cars. I wish to touch on the point made by Deputy Mulherin who said that providing transport infrastructure for the majority of people would make public transport attractive. She also wanted to know how we can make the greatest impact. We can create benefits quickly by concentrating on areas like large fleets or employers.
A point was made about gas-based vehicles. There would be cross-sectoral benefits if people used gas generated by anaerobic digestion. One of the transport sectors that we have examined, and will continue to focus on, is changing the way people travel for short journeys and I acknowledge that it is not a solution in rural areas. People living in urban areas undertake a phenomenal number of short journeys by car. We have put a lot of effort into trying to induce people to change the number of their short car journeys. We will continue that focus by promoting walking and cycling schemes. We can make a difference if a great number of people change the way they travel.
Mr. Paul McKiernan:
Deputy Mulherin made the point that there can be unintended consequences when people grow energy crops instead of food crops. My colleagues in the Department of Communications, Energy and Natural Resources picked up on her point. Ireland's core argument is that agriculture is about growing food and, principally, it should not be about growing something that will be turned into an energy but a by-product is okay.
With regard to waste, I can assure Deputy Mulherin that the Minister, Deputy Coveney shares her deep interest in anaerobic digestion. However, I do not want to pre-empt the national bio-energy strategy. Before Christmas technical advisers from my Department, specifically my division, another environmental division and the animal by-products division, met a number of people who had projects in mind or are at various stages of development. We gave them as much information as we could on what the Department required. There are issues about feed stock and whether pasteurisation is needed before it can be spread on land. I am not a scientist and I am glad that have some with me that can explain it better. However, I understand the pasteurisation being required in order to prevent the spread of pathogens, etc. and I know that others can make a counter argument for same. The Department is open to exploring the matter and wants anaerobic digestion to work.
Anaerobic digestion has amazing potential. Experience has informed us that when someone decides to get into the business their first thought is to locate the system where there will be a minimal amount of objections. I am sure that the officials are aware of that happening. I have witnessed people attempt to build anaerobic digesters in areas where they presumed there would be a minimal level of objections. That led to a situation similar to what Deputy Mulherin described, namely environmentally friendly fuel turning out not to be kind to the environment. In other words, the EU proximity principle was completely ignored because more fuel was used up transporting feed stock, waste or resources to an anaerobic digester than was produced. I am a fan of anaerobic digestion and it would be brilliant to build a digester beside the prison in my town but it will be hard to persuade people that the process is safe. If we do not persuade the public that it is not dangerous, those who want to produce energy using anaerobic digestion will end up stuck in the planning process involving planning permission and endless judicial reviews.
Anaerobic digestion is known as incineration where I come from, which is preposterous. One would have to be a brave politician to say otherwise. We must be cognisant of that fact when taking this route.
Mr. Paul McKiernan:
The Deputy has outlined the difficulties. I am not sure how much is in our gift to solve problems but we will examine pilot schemes for the new rural development plan. Teagasc is developing a pilot anaerobic digestion scheme using its own waste at Grange, County Meath. The scheme is only in its initial stages. The Department of Agriculture, Food and the Marine is open to the concept and will monitor the benefits with great interest.
Germany has a large number of anaerobic digesters but its refit tariff was very high and led to unintended consequences. Farmers stopped growing food and grew feed stock for anaerobic digesters instead. We do not want that to happen here.
Senator Keane asked how we can be carbon neutral but I cannot give her a simple answer. It has not been fully defined and is at various stages of definition internationally. Based on the findings of the NESC report, Teagasc will work in a qualitative manner and assess various pathways, as mentioned by Mr. John Fearon. However, one cannot do a quantitative assessment as far as 2050. Teagasc will examine a number of different measures that will range from reduced production, which the Department clearly disagrees with, particularly when Ireland uses a sustainable production system, to advanced mitigation where farmers use the very highest and most efficient technologies. I shall ask my colleague, Mr. John Muldowney, to make a few brief comments on carbon neutrality.
Mr. John Muldowney:
As Mr. McKiernan has highlighted, we are working towards being carbon neutral. Teagasc is working on a qualitative roadmap of possible scenarios, as opposed to actual figures. Post-2020 Teagasc thinks that a range of these options will be adopted.
There are many new technologies. For agriculture, carbon neutrality will not mean zero, but half of the current emissions. Unfortunately, the accounting only includes emissions from our significant cattle herd. We are trying to match that figure with the potential sinks, for example, forestry and permanent grass. Our research programme is trying to develop our understanding of the carbon pools and sinks in grassland. The EU's decision has set out a framework for all member states to try to improve their understanding of grassland and cropland accounting ahead of a post-2020 system.
I wish to ask a supplementary question to Senator Keane's query. It relates to our renewable targets and the rate of installed wind capacity. Given the difficult saga of the super grid's construction in certain areas, to what extent does the Department of Communications, Energy and Natural Resources factor in the use of special protection schemes and smart grid technology in achieving targets? We do not have grid coverage where we are best resourced. This is a problem for those who are trying to pursue the development of wind farms. I am familiar with a number of cases in County Mayo wherein the grid's slow pace of development has affected their financial viability. People are being asked to sign up to connection agreements under grid 3, yet grid capacity has been over-offered, resulting in constraint on various projects, rendering them unbankable. This approach is speculative, which in turn discourages private sector investment in wind farms. I appreciate that Bord na Móna and Coillte are involved to a certain extent, but the private sector is the driving force in the development of wind farms. There seem to be many obstacles, and now this. EirGrid is considering the matter. It is generally accepted in the industry that the rate of installed capacity is not what it should be. There are concerns about whether it will be achieved.
Mr. Brian Carroll:
Deputy Mulherin is correct, in that EirGrid has a plan to roll out grid. We have gate 3. EirGrid has a programme to accommodate more intermittent or variable renewable energy on the grid. This will involve using smart grid. The Department has been aware of the difficulties for wind farm developers and the delays in progressing their projects. At this year's Irish Wind Energy Association, IWEA, conference, the Minister announced a number of changes to the REFIT 1 and 2 schemes. These changes were welcomed by the industry, as they included time flexibility to allow people to develop for 2020 and to make their projects bankable. This is a specific departmental response to facilitate developers.
I wish to make a brief point to Mr. Carroll. I appreciate that EirGrid is examining the logistics. Naturally, it must be concerned about the integrity of the system, but time is of the essence for some projects. It is a speculative business. Many developers have already trumped up money and need to know where they stand. There must be a specific focus. For example, they hope that construction of grid west will be completed by 2019, which is just shy of 2020. Given the way that the planning process in this country works, this target might not be achieved. We need to have a few plan Bs if we are to allow the industry and the requisite wind farms to develop, particularly in my neck of the woods. The industry needs to be developed sooner rather than later. We need to sweat the capacity on the existing grid to allow those who have already invested a great deal of money to proceed.
I thank Mr. Spratt, Ms McCabe, Dr. O'Connor, Mr. Carroll, Mr. McKiernan, Ms Murray, Mr. Muldowney, Dr. Hendrick, Mr. Fearon, Ms Behan and Ms Keoghan for assisting in our deliberation of the outline heads of the climate action and low carbon development Bill. I thank members for their interesting questions.
Before we adjourn, I propose that we send the National Economic and Social Council's proposal on the institutional arrangements, including the document that we received on the first day and today's correspondence, to the three delegations.