Malcolm Noonan (Carlow-Kilkenny, Green Party) | Oireachtas source

Go raibh maith agat.

I move: “That the Bill be now read a Second Time."

I am delighted to address the House for the Second Reading of the Bill. The Bill is important in that it provides for the use of petroleum product levy funds, also known as the National Oil Reserves Agency, NORA, levy, collected on the consumption of oil products, to be used to fund the climate action fund. This fund will support a range of climate action projects which will reduce greenhouse gas emissions and be of benefit in terms of employment opportunities and economic development in communities throughout the State.

The repurposing of the NORA levy for climate action is timely in the context of the overriding need to provide a stimulus for the economic recovery. It is one of a number of measures the Government intends to put in place over the next few months to kick-start economic growth. However, we need increased ambition in leveraging every mechanism at our disposal to ensure we can deliver every type of innovative project that will place Ireland at the forefront of the green economy and develop our green infrastructure. While doing this, we must at the same time be sure that all regions of the State benefit from the new sustainable economic and employment opportunities that have emerged, including within the renewable energy and energy efficiency sectors. There is a strong need to ensure no region of the State is left behind as Ireland transitions towards a low-carbon society. This has come into sharp focus recently with the announcement that Bord na Móna will suspend peat harvesting and concentrate on enhanced peatland rehabilitation. The Department is examining the potential of the climate action fund to provide support for this activity, which will have the effect of transforming bogs damaged as a result of industrial milling of peat for power generation into effective carbon sinks. At the same time as providing for sequestration of carbon, this work will generate replacement employment for workers previously employed in the milling of peat.

The climate action fund is one of four Project Ireland 2040 investment funds established to support the whole-of-Government stated ambition on climate action. This Bill provides for the financing of the fund by way of using funds generated by the NORA levy left over after the funding requirements of the NORA have been met. The Bill also establishes the fund, which is currently set up on an administrative basis, on a statutory footing, as advised by the Attorney General. The transport sector, excluding aviation, is dominated by passenger cars and freight and represents appropriate one fifth of Ireland's greenhouse gas emissions. It is, therefore, appropriate that the surplus NORA levy funds, which are levied primarily on the use of petrol and diesel in road transport, are repurposed to assist in the wider decarbonisation of our society. This is consistent with the establishment of the polluter pays principle.

While the primary purpose of the climate action fund is to support projects and initiatives in the area of climate mitigation, the fund also offers the considerable potential benefit of supporting sustained post Covid-19 investment in relevant technologies and infrastructure with resulting positive impacts on economic growth and job creation in communities throughout the State. The first call for projects led to the fund committing up to €77 million of support to successful projects. These projects are expected over the lifetime to leverage a total of €300 million of investment in the State. The projects supported under the first call of the fund will include: the nationwide roll-out of a high-powered ESB charging infrastructure for electric vehicles, EVs, supported up to €10 million; Dublin City Council's district heating system, supported up to €20 million, an innovative programme of which there are not many exemplars in this country; Gas Networks Ireland's green renewable agricultural zero emissions gas, supported up to €8.5 million; Irish Rail's hybrid drives for InterCity railcars, supported up to €15 million; a local authority public lighting energy efficient project, supported up to €17.5 million, and the benefit of which I have seen in my own constituency where the pilot of this programme commenced; South Dublin City Council's Tallaght district heating scheme, which uses excess data centre energy, supported up to €4.47 million; and the Three Counties Energy Agency project to increase efficiency in the road haulage sector, supported up to €1.37 million, another project I had close association with.

These projects will enable decarbonisation in a number of sectors, including transport, heat and agriculture. On the enactment of the Bill, it is envisaged that a second call for applications for support from the fund will open as soon as possible in 2020. The advance work of the Department and continuous engagement with different sectors as well as experience gained from an analysis of the first call applications indicate that considerable scope exists for supporting projects that will provide climate benefits. At the same time, the fund can contribute to investment and economic growth across society, thus making an important contribution to our national recovery.

The overall purpose of the Bill is to amend the National Oil Reserves Agency Act 2007 to provide for the establishment of the climate action fund on a statutory basis, extend the purposes for which the NORA levy is paid to include providing funding for the fund and to provide for the payment of a portion of the levy moneys collected by the NORA fund. The NORA levy is collected at a rate of 2 cent per litre on most oil products on the market and is used to fund the activities of NORA, primarily in the maintenance of the State's strategic oil reserves. The amendments to the 2007 Act provided for in the Bill will allow for the repurposing of NORA levy monies to support projects and initiatives from the climate action fund and contribute to achieving the State's climate action goals in a cost-effective manner.

The Bill also amends the National Treasury Management Agency (Amendment) Act 2000 to provide for NORA and Irish Water as designated bodies to whom the National Treasury Management Agency, NTMA, may provide central treasury services. This allows the NTMA to make deposits from and-or to make advances to NORA as an alternative to the current utilisation of the commercial banks. It also facilitates the restructuring of Irish Water's funding arrangements, whereby existing funding from mainly commercial banks can be replaced with more competitively priced State funding debt facilities. This NTMA facility to Irish Water is intended to cover short-term and temporary timing-related funding requirements. Provision is also made in the legislation to provide for technical changes to the biofuels obligation scheme and for fixing of the rate of the biofuels levy to a nominal amount to incentivise the use of biofuels.

The legislation contains 28 sections. I will turn to key provisions and explain what each is designed to achieve. This is not intended to be a definitive explanation of the contents of each section. The explanatory memorandum gives a more detailed account of each provision.

Section 4 revokes existing provisions of secondary legislation that set the rate of the NORA levy, which is required as the Bill will insert a new provision into the National Oil Reserves Agency Act 2007, which fixes the rate of the levy at 2 cent per litre by statute.

Section 5 amends section 8 of the National Oil Reserves Agency Act 2007 by expanding the functions and powers of the agency to enable it to pay levy funds it has collected to the climate action fund, as directed by the Minister.

Section 13 of the Bill amends section 37 of the 2007 Act by expanding the purpose for which the levy is paid from the current purpose of funding the expenses of NORA to also include contributing to the climate action fund. This section also sets the rate of the levy to 2 cent per litre by statute.

Section 14 is an important component of the Bill which amends the 2007 Act to permit the Minister to issue an annual direction to NORA to pay a specified amount of levy moneys to the climate action fund. The section provides that only levy moneys collected and recovered after the legislation has commenced may be paid to the climate action fund. Prior to making a direction, the Minister is required to consult with NORA, the Minister for Public Expenditure and Reform and the Minister for Finance. The Minister is also required to be reasonably satisfied in making a direction that NORA will have adequate financial resources remaining after payment has been made to meet its expenses during the remainder of the current financial year. In addition, the Minister must consider the amount specified to be appropriate, having regard to any future expenditure that may be required by NORA in subsequent years.

Section 15 fulfils the important function of establishing and providing governance arrangements for the climate action fund. The fund shall be controlled by the Minister or by persons to whom the management and control of the fund has been delegated by order of the Minister. The fund will consist of such accounts that the Minister will determine as necessary, with provision made for submission of the accounts of the fund to the Comptroller and Auditor General for audit and the laying of a copy of the report of the Comptroller and Auditor General and audited accounts before each House of the Oireachtas. The purpose of the fund is outlined and includes supporting projects, initiatives or research that seek to reduce greenhouse gas emissions, to increase the production or use of renewable energy or to improve energy efficiency in the State. In addition, provision is made for projects or initiatives to support regions and sectors of the economy impacted by the transition to a low-carbon economy. Provision is made for the Minister to invite proposals to avail of moneys from the fund. Moneys may be paid from the fund only to persons who have conducted projects in accordance with the guidelines specified by the Minister in consultation with the Minister for Public Expenditure and Reform. Provision is also made for the establishment of a committee to advise the Minister on any aspects of his or herfunctions related to the fund. Further arrangements are made for the payment of any expenses incurred in connection with the administration of the fund, with the consent of the Minister for Public Expenditure and Reform.

Section 22 makes a technical change to the 2007 Act in regard to the administration of the biofuels obligation scheme. The amount of the biofuels certificates from the two previous obligation periods which may be used in the current period is reduced from the previous cap of 25% to 15% of the total obligation.

Section 24 amends the 2007 Act by setting the rate of the biofuel levy at one tenth of a cent per litre of biofuels placed on the market. Setting the rate at a nominal amount removes an anomaly which currently exists whereby the levy placed on biofuels is the same as that on petroleum products placed on the market.

Section 28 amends section 18 of the National Treasury Management Agency (Amendment) Act 2000 to provide for the designation of both NORA and Irish Water as designated bodies to which the National Treasury Management Agency, NTMA, provides central treasury services. This allows the NTMA to take deposits from and-or make advances to the agencies as required. NORA will be permitted to deposit moneys with the NTMA as an alternative to the current utilisation of the commercial banks. This provision also facilitates the restructuring of Irish Water's funding arrangements.

In conclusion, this Bill serves to repurpose surplus NORA fund levies to make them available to the climate action fund, thereby supporting projects that will assist the State in its progress towards net zero carbon emissions by 2050. It also establishes the climate action fund on a statutory basis, enabling it both to receive levy funds and administer the provision of those funds to projects that will further decarbonise our society. In addition, the fund offers real potential to support employment and economic development by exploiting the opportunities of the expanding green economy and developing green infrastructure while, at the same time, supporting the just transition of regions formerly dependent on high-carbon activities. The climate action fund provides the opportunity to support economic growth while also delivering significant reductions in greenhouse gas emissions. The Bill establishes the fund on a sound basis and provides it with access to the funding it requires to achieve its goals. I commend the Bill to the House.

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