Mr. Denis O'Sullivan:

I thank members for the opportunity to brief the committee on the work that Gas Networks Ireland is doing to decarbonise Ireland’s transport sector, in particular in the area of commercial transport and public service vehicles. Gas Networks Ireland is creating a new transport network in Ireland in the form of a 70-station network for refuelling compressed natural gas, CNG, vehicles to meet the needs of Ireland’s public and private commercial transport operators.

As members know, natural gas is the cleanest of fossil fuels. In the context of transport, a CNG vehicle produces 22% less CO2, 70% less nitrogen oxide, 80% less sulphur dioxide and 99% less particulate matter and operates much more quietly than the diesel equivalent. Natural gas is used in over 2 million vehicles in Europe, comprising mainly commercial vehicles. The fuel is used in the form of compressed natural gas or CNG as it is more commonly known. While Ireland does not have an established history of using CNG, this technology is well established around the world.

In terms of transport targets, the main efforts to date have been in relation to biofuels and EVs. The biofuel obligation scheme has played a major role in the progress that has been made on our 2020 targets. While progress on EVs has been slower than some would have hoped, the work done by our colleagues in the ESB will yield significant dividends in the years to come for the private car market. Gas Networks Ireland is focusing its efforts on larger vehicles such as light and heavy goods vehicles and public transport. These vehicles generally operate for long periods, carry heavy loads and have a high operating range, making them particularly suited to CNG. While they make up just 3% of the total number of vehicles on the road, they account for 20% of emissions. By concentrating our efforts on changing the habits of this relatively small group of decision makers, we can have a very significant impact on our overall aim of decarbonising our transport sector.

As I mentioned at the outset, Gas Networks Ireland is currently developing a network of CNG filling stations across Ireland. The network of 70 stations will comprise both public and private filling stations. The first public station will open in Dublin Port this summer, with the backbone of the network rolling out in the next three years. The first private refuelling point has recently become operational at Clean Ireland Recycling, a waste management company in Shannon, County Clare.

In addition to building the network infrastructure, Gas Networks Ireland, with support from the Innovation and Network Executive Agency, INEA, through the Connecting Europe Facility, CEF, has opened a funding initiative to fill the relatively small gap in cost that still exists between conventional and CNG vehicles. The initiative is proving extremely popular and the first CNG-powered vehicles have arrived in Ireland and are operational.

I have outlined the significant environmental savings of CNG vehicles. These benefits will be further improved with the arrival of renewable gas. Gas Networks Ireland is currently working with a number of partners to bring renewable gas into the Irish network in early 2018. Renewable gas, which is generated from feedstocks such as food waste, agricultural waste and grass, is identical in composition to natural gas but is completely renewable and carbon neutral and requires no modification to the network or downstream equipment. Gas Networks Ireland is targeting 20% renewable gas on the Irish system by 2030, a figure supported by a recent SEAI report which indicated a potential for 25% of gas on the Irish system to be renewable by 2030.

It is important, from a business perspective, to note that the benefits of CNG are not solely environmental ones. CNG offers a significant fuel cost saving over diesel. Based on today’s diesel prices, CNG offers a 40% reduction in fuel cost. In the highly competitive world in which our exporters operate, in particular in the current climate, reducing logistics costs is a very attractive proposition. In terms of performance, leading manufacturers such as Iveco and Scania have invested heavily in creating a new generation of vehicles which offer even greater performance than before. The modern CNG vehicle offers a direct competitive challenge to its diesel alternatives in terms of cost, performance, range and maintenance.

We welcome the recent publication by the Department of the national policy framework for alternative fuels infrastructure for transport in Ireland which focuses on decarbonising transport in Ireland. As noted in the framework, CNG, unlike other options considered, is a mature and proven technology for public transport. When taken with the imminent introduction of renewable gas, it is the logical and obvious choice for Ireland’s bus networks. CNG buses are commonplace in cities throughout the world. Gas Networks Ireland and Bus Éireann have already successfully trialled CNG buses in Cork and we look forward to engaging with the NTA and Transport Infrastructure Ireland to deliver the next generation of Ireland's public transport fleet.

CNG is a technology that has been adopted across the world for many years. Ireland is a little late on the uptake. However, in doing so we have the benefit of adopting a mature technology at competitive cost. I thank the committee for its ongoing interest and efforts to drive forward the sustainability agenda in Ireland. I am happy to take questions members may have.