Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I move:

That Dáil Eireann approves the terms of the Annual Emission Allocation Units Purchase Agreement for target compliance purposes under Decision No. 406/2009/EC, signed on 14 February 2023, a copy of which was laid before Dáil Eireann on 13 March 2023.

Thank you, a Cheann Comhairle, for the opportunity to speak on this important matter. As a member of the EU, Ireland has annual legally binding emissions reduction targets to meet. These targets are set out in EU legislation and compliance checks are carried out to ensure member states meet their obligations.

For the second commitment period of the Kyoto Protocol, which covers the period 2013 to 2020, Ireland, and all EU member states, contributed collectively through an EU burden-sharing agreement, known as the EU effort sharing decision. This covers sectors that do not fall under the EU emissions trading system. They include transport, agriculture, buildings, and light industry.

A major feature of the Kyoto Protocol was the establishment of flexible market mechanisms to allow for cost-effective trading in the marketplace. This is reflected in the legislative framework of the EU effort sharing decision, which provides for several compliance options beyond direct emissions reductions that enable member states to achieve their targets as efficiently and effectively as possible. This includes options to bank, borrow, purchase and trade carbon credits, also referred to as annual emission allocation, AEA, units.

The deadline for demonstrating compliance with 2020 - in other words, the final year covered by the EU effort sharing decision was 17 February 2023. Ireland's final emissions for 2020 exceeded our target by approximately 7 Mt CO₂eq. Failure to comply would result in a multiple of the deficit being deducted from Ireland's allowance for 2021, and it could lead to a formal EU infringement procedure being launched against the State, which would be reputationally damaging. To make up the shortfall to our 2020 target, 3 million international carbon credits that had been purchased in earlier years were carried forward to use. With one carbon credit representing one tonne of CO₂equivalent emissions, this left a gap of 4.15 Mt CO₂eq still to be addressed.

In July 2022, the Minister for the Environment, Climate and Communications, Deputy Ryan, brought a memorandum to Government advising that all available options for compliance should be considered, including that of trading with other EU member states. Following analysis of available compliance options and bilateral engagement with member states, the Government agreed to the option that maximised cost efficiency and secured the best possible value for the Irish taxpayer, which was to enter into an agreement with Slovakia for the purchase of 4.15 million AEA units at a total cost of €2.9 million, which comes to 70 cent per AEA unit. The agreement also specifies that proceeds from the transfer are to be used exclusively for climate change activities in the Slovak Republic. On 14 February 2023, following Government approval, the Minister, Deputy Ryan, signed the agreement with Slovakia, which allowed for the immediate transfer of the required 4.15 million AEA units to Ireland's account on the Union registry. This enabled Ireland to be in full compliance with the EU effort sharing decision by the European Commission deadline.

Following the advice of the Attorney General, this motion is now being brought before the House to seek approval of the terms of the agreement, which would then become binding on the State. This would close out compliance for 2020 and mean that Ireland has been fully compliant with its obligations under the EU effort sharing decision. As a whole, the EU has outperformed its collective emissions reduction target over the 2013 to 2020 period.

The EU effort sharing decision is succeeded by the effort sharing regulation for the period 2021 to 2030, which brings a considerable step up in ambition as the EU moves towards a 55% reduction in overall greenhouse gas emissions by 2030. Under the recently revised effort sharing regulation, as part of the EU's Fit for 55 Package, Ireland's target is to achieve a 42% reduction in emissions by 2030 relative to 2005 levels. Ireland has supported the increased ambition. It is fully in line with our national climate objectives, as legislated for in the 2021 climate Act. While it will be a great challenge, we have put the framework in place to enable the State to fully achieve its targets. Under the effort sharing regulation, the compliance options available to states are reduced. For example, it is no longer possible to use international allowances for compliance. The cost price of purchasing AEA units for the period to 2030 is projected to be far in excess of what we have been able to negotiate for 2020. It is therefore essential that domestic policy and investment are focused on significantly reducing direct emissions out to 2030.

The "final warning" provided last week, by the latest synthesis report from the Intergovernmental Panel on Climate Change, IPCC, must focus all our minds on the urgency of taking immediate and meaningful action to accelerate emissions reductions. It is important that we continue to demonstrate our commitment to meeting our targets, in support of the wider aspirations of the Paris Agreement and of the European Green Deal. Achieving a 42% reduction over the next decade will be a major challenge, one which will require concerted action across all of government and society. The Climate Action Plan 2023 sets out the necessary additional policies and measures that Ireland must take to meet these more ambitious emissions reductions targets. It is essential that we maintain a high level of climate ambition and accelerate full implementation of these policies and measures and that we continue to demonstrate our commitment to meeting our emissions reduction targets, in support of the wider aspirations of the European Green Deal. I look forward to hearing the contributions from all Members on this important issue.

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