Dick Roche (Wicklow, Fianna Fail)

I welcome the European Commission's conditional acceptance of Ireland's second national allocation plan, which was announced on 29 November. This is the first stage in a process that will enable us to make a final decision on the allocation of allowances to operators in the emissions trading sector for the period 2008-12. The Commission's approach to our plan recognises that Ireland was one of the few member states which carried out the allocation process correctly in the first national allocation plan in 2004 and we have followed the same approach in the second plan.

The Commission has raised a number of issues in the plan, to which Ireland must respond by 31 December. In particular, it considers that Ireland has not fully substantiated its proposals for Government purchases of carbon allowances, which I addressed in the Dáil last week, and it expects transport emissions to increase by more than we have projected. On foot of these concerns, the Commission seeks a reduction of 6.4% in our proposed allocation of allowances to the emissions trading sector.

In my response to the Commission, I will be able to provide considerably more substantiation of our arrangements for Government purchases. Following the approval of the Dáil on 30 November, I signed a contract with the European Bank for Reconstruction and Development for €20 million to secure carbon allowances. Last Friday, I published the Carbon Fund Bill 2006 and this is scheduled for Second Stage debate on Thursday, 14 December. I will seek Dáil approval this week to enter into agreement with the World Bank with a view to an investment of a further €20 million. I have also responded on the question of transport emissions and on a number of issues of a technical nature which were raised by the Commission.

Ireland's response will inform the Commission's further consideration of our plan and I believe we will reach agreement on an allocation closer to what was originally proposed in final discussions with the Commission.

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