Darren O'Rourke (Meath East, Sinn Fein) | Oireachtas source

I am sharing time with Deputies Seán Crowe and Buckley.

The main purpose of this 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. It also provides for the 2 cent levy that currently funds the National Oil Reserves Agency to be redirected to support the fund. It is proposed that the climate action fund will be used to support projects aimed at reducing emissions, increasing renewable energy production, improving energy efficiency and helping regions and sectors hit by changes that cut carbon emissions. Such a fund, constituted correctly and fairly and spent wisely, could really assist the State in its response to the climate crisis. Therefore, Sinn Féin is happy to support the Bill.

The National Oil Reserves Agency was established as a stand-alone agency under the 2007 Act. Its function is to arrange for the holding of national strategic oil stocks at a level determined annually by the Minister for Communications, Climate Action and Environment, for supply in an emergency. NORA is currently funded by a levy set at a rate of 2 cent per litre on the sale of most petroleum products at the point of sale. The levy is collected by the oil companies each month and paid to NORA to fund its activities, including operating expenses incurred in the purchase of petroleum products and securing storage in Ireland and abroad.

The NORA levy was increased by the then Minister, Deputy Eamon Ryan, in 2009 from 1 cent to 2 cent by . That statutory instrument imposes a 2 cent levy on petrol, green diesel, diesel oil, fuel oils and kerosene, but specifically excludes jet fuel of the kerosene type. Will the Minister of State explain why jet fuel was specifically excluded from the provisions of the 2009 statutory instrument? According to the European Commission, direct emissions from aviation account for some 3% of the EU's total greenhouse gas emissions and more than 2% of global emissions. If global aviation were a country, it would rank in the top ten emitters. In 2020, global annual international aviation emissions are already approximately 70% higher than they were in 2005. The International Civil Aviation Organisation, ICAO, forecasts that, in the absence of additional measures by 2050, they could grow by a further 300%. Given the huge emissions the aviation industry contributes, should jet fuel be excluded from the levy that will support the climate action fund? Why should ordinary motorists be obliged to pay that levy when large airlines are not? I ask the Minister of State to address this point in his response.

The NORA levy was increased in 2009 to reduce the €440 million in debt NORA had accrued. According to NORA's 2018 financial statement, a programme of debt repayment was undertaken between 2012 and 2017. By 31 March 2017, NORA's loans were nil, and this position has been maintained since then. As of the end of August 2019, NORA held a cash balance of €221.7 million. Over the period 2019-23, average levy receipts are expected to be €141 million per annum, while average NORA expenses are expected to be €76 million per annum. Section 44(3) of the National Oil Reserves Agency Act 2007 states: "In determining the rates of levy, the Minister shall seek to ensure that (taking one year with another) the sums realised by applying those rates to the volume assessments meet but do not exceed the estimated expenses of the Agency and of each designated subsidiary". However, this levy has obviously far exceeded the expenses of NORA. Has there been a breach of legislation to date due to NORA collecting an excess amount of money via this levy? The Comptroller and Auditor General was asked this specific question by the Committee of Public Accounts last year and he said it was a legal question. Has the Minister received legal advice on this?

I also raise the issue of the up-to-date cash balance of NORA. The 2019 financial statements are not available online. Will the Minister outline the current financial state of NORA? Section 14 of this Bill includes the provision that any levy moneys collected or recovered prior to the commencement of the Bill "shall not form part of any payment into the Climate Action Fund under this section". On what exactly will NORA be spending the large sum of money that has accumulated in its accounts? I ask the Minister to address that at some stage. I have outlined the figure of €221 million from last August, but does the Minister have an updated figure? Considering that NORA accumulated debts of €440 million just a decade ago, is the Minister satisfied that this will not happen again? Will there be transparency and oversight here, given the significant cash balance?

This Bill will convert a levy on fossil fuels, which was introduced for the specific purpose of paying down a debt and funding NORA, into a levy on fossil fuels that will fund climate action initiatives. Taken in combination with the Government’s proposed punitive carbon tax, this will now be a double tax on fossil fuels, on which people rely to heat their homes and run their cars. Has the Minister considered this? We already have 400,000 people living in fuel poverty in this State, and this Administration wants to quadruple the carbon tax over the next decade. The Minister, Deputy Eamon Ryan, confirmed that to me earlier today. Does the Minister agree that this will push more people into fuel poverty, as real affordable alternatives are simply not available for most people? Similarly, the Minister previously proposed a fee and dividend approach to carbon tax, but this has since been abandoned by the Green Party. Will the Minister outline how he will assist those already living in fuel poverty and the many more who will be at risk of it due to the severe hikes in carbon tax the Government is proposing? How will those people be helped?

The Bill also amends the National Treasury Management Agency (Amendment) Act 2000 to provide for NORA as a designated body to which the NTMA may provide central treasury services. This allows the NTMA to take deposits from NORA, make advances to NORA, or both, as an alternative to the current utilisation of commercial banks. Irish Water is also to be given the same designated body status under the NTMA legislation. This facility is intended to facilitate the restructuring of Irish Water's funding arrangements, whereby existing funding from mainly commercial banks can be replaced with more competitively priced State-funded debt facilities. Are there any estimates of how much these changes could save Irish Water and NORA?

The Bill also proposes two substantive changes regarding the use of biofuels in Ireland by providing for technical changes to the biofuels obligation scheme, in addition to setting the rate of the biofuel levy to a nominal amount. Biofuels are intended to assist EU member states in meeting their emissions reduction targets. However, ensuring that biofuels are produced in a sustainable way is central to them reducing greenhouse gas emissions without adversely affecting the environment or social sustainability. Will the Minister provide further details about the Government’s plans in this area?

It has been stated that the climate action fund will provide €500 million in support to projects over the period of the National Development Plan 2018-2027. It was previously announced that the annual expenditure will be approximately €10 million in 2020, €30 million in 2021, €40 million in 2022, €80 million per annum in each of the years from 2023 to 2026 and €100 million in 2027. Has the Minister considered front-loading this investment to stimulate the economy post Covid-19 and to make quicker progress on our emissions targets?

My time is running out and I cannot see whether my colleagues are here to take over.

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