Simon Coveney (Cork South Central, Fine Gael)
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I thank the Chair and committee members for inviting me here to speak. With me today are David Hegarty, assistant secretary at my Department, along with Nick Barwise, Stephen Walsh and Alan Dempsey, who are assistant principals in my Department’s climate action team.

The Government is acutely aware of the challenges presented by climate change and the urgent need to decarbonise our economy. I am convinced that tackling climate change will be the defining global challenge of the next decade. This transition to a low carbon economy will require the concerted efforts of Government, businesses and broader society, working together. The link between fossil fuel use and economic progress must be completely broken. It is important to acknowledge that progress is being made on this. For example, a new analysis published by the Central Statistics Office last week shows that greenhouse gas air emissions were 236 g per euro of modified gross national income in 2021, a volume decrease of 31% from 2012. It is clear, however, that a lot more remains to be done to decarbonise our economy.

Sustainability and the decarbonisation of businesses will be a fundamental driver of Ireland’s future competitiveness and the long-term health of the overall economy. The need to decarbonise the economy will change the way we design, produce and consume goods and services. The recently published White Paper on Enterprise 2022-30 aligns enterprise policy with the imperative to decarbonise our economy and society. It recognises the industrial development and export opportunities of offshore wind in particular. I am sure the Chair is following that closely in the context of the potential for the Shannon Estuary region. Securing our offshore wind capacity to meet our Climate Action Plan 2023 targets and the transition of our energy system to renewable energy will be crucial. The exploitation of this opportunity will help to ensure that we remain competitive and provide the security of supply that is necessary to underpin our future economic development. This will support Ireland’s business environment and attractiveness as a place to invest in.

Climate Action Plan 2023, which is the latest iteration of the climate action plan, and its associated actions, once agreed by Cabinet, will be the key driver of decarbonisation across industry and the commercial built environment. My Department has been closely involved in the development of Climate Action Plan 2023, reflecting the Department’s responsibility for sectoral emissions ceilings for industry and commercial built environment emissions, as well as the significant implications for businesses across a wide range of sectoral measures, such as transport and energy. Under the sectoral emissions ceiling for industry, the sector is required to reduce emissions by 35% by 2030. For the non-residential built environment, emissions have to be reduced by 45%. Achieving these targets will require a concerted effort by all businesses in the State.

Focusing on some specifics, the cement sector is responsible for approximately 40% of industrial emissions in Ireland and approximately 5% of total national greenhouse gas emissions. My Department is leading work in respect of the decarbonisation of the cement and construction sectors. Through a working group comprising relevant Departments, agencies and industry representatives, we are finalising terms of reference for a technical consultancy study aimed at developing appropriate public procurement criteria to ensure the reduction of embodied carbon in cement and concrete used by public bodies more generally. As the State is a significant buyer of construction sector output, we want to use procurement as a driver of change in this area.

As mentioned, my Department and I are now also responsible for a sectoral emissions ceiling related to the commercial buildings - non-residential, non-public sector - cohort of built environment emissions. We are working closely with the Department of the Environment, Climate and Communications, DECC, and the Sustainable Energy Authority of Ireland, SEAI, to operationalise this target.

The climate action plan commits my Department and the DECC to jointly develop a roadmap for upgrading our commercial building stock. The roadmap will set out both the grants and financial assistance required through SEAI to allow businesses and landlords make these investments, as well as the regulatory levers that will drive higher standards and ensure compliance in both our new and existing building stock over time.

I reiterate how important I see the decarbonisation agenda to enterprise policy and the work of my Department. I thank the committee again for the opportunity to discuss these issues.

We launched a new enterprise strategy in December. It contains two key transitions: decarbonisation; and digitalisation of our enterprise sector. The two are very much interlinked. In reality, we will have to spend a significant amount of public money and work in partnership with the sector to bring about that transformation between now and 2030 that is necessary to meet those targets, but it is doable. It will involve a lot of change but that can be good for business, good for employment and, most importantly, good for the environment and the emissions challenge that we have to face up to. It will not happen by itself. That is for sure. I have had a number of meetings already today in relation to different sectors focusing on data centres and other economic sectors in terms of how we can partner with them to bring about the necessary changes that are needed to effectively remove, where possible, significant sources of emissions and to move away from bulk fossil-based fuels as a power and a heating source towards electrification that ultimately will be generated through renewable means. That is ultimately where we need to get to. It is an exciting challenge that, I believe, Ireland has a lot of competitive advantages versus other countries in delivering on but, as I say, it will require a change in mindset right across the economy and across society to make it happen. Obviously, Government needs to lead on that but we need to be realistic too. We need to bring people with us because the politics of this is not straightforward. If we simply tell people what to do, we will not bring them on the journey with us. That is the reality. This has to be a combination of grant aid, policy support, taxation measures, and linking efficiency and profitability with sustainability solutions in terms of the change that we need across our enterprise sector.

I look forward to any questions or comments the members might have.