Seán Canney (Galway East, Independent)

I welcome the opportunity to address the House on road haulage costs and how the Government is supporting this critical sector. I will share my time with the Ministers of State, Deputies Christopher O'Sullivan and Jerry Buttimer.

Geopolitical events over the past number of years and the storm damage to Holyhead at the end of last year have highlighted the importance of the road haulage sector and the contribution it makes to our economy, facilitating domestic and international trade. During this period of instability, the sector has demonstrated resilience and a willingness to work with policymakers to overcome challenges and promote careers, skills development and sustainable employment in the wider logistics and supply chain sector in Ireland.

While nobody would deny events such as Brexit, the Covid-19 pandemic and the invasion of Ukraine have driven up costs in what is already a sector with a tight profit margin, there are reasons to be positive about the trajectory and future growth of the sector. At the end of 2024, my Department reported that over 44,500 commercial goods vehicles exceeding 3.5 tonnes were taxed in Ireland. This was an increase of 4% from almost 42,800 in December 2023 and the second year in a row that the numbers increased. There were almost 4,000 licensed road haulage operators registered in Ireland in 2024, with 24,300 vehicles operating on these licences. Approximately 65 of those haulage operators are licensed to operate internationally, with the other 35% operating domestically. While there was a decline in road freight activity in 2020, all available measures, such as the number of laden journeys undertaken and tonnes carried, have increased year-on-year since 2021 and were above the 2019 levels by the end of last year.

I want to draw the attention of the House to the recently published Freight Transport Association Ireland manager's guide to distribution costs 2025 report. It is positive to note that this year's report shows a continued slowdown in the average rate of increase in business and transport overhead costs and that operating profit margins are increasing year-on-year. However, it is crucial that the Government continues to support the sector and I would like to provide Deputies with an overview of the strategies being implemented by officials in my Department aimed specifically at the sector.

In December 2022, the Government published Ireland's road haulage strategy 2022-31 following two phases of public consultation. The strategy highlights the importance of the haulage and rail freight sectors and identified 39 actions, split into short-term priorities expected to be completed within the next two to three-year timeframe and enablers for medium to long-term progress that will ensure the delivery of policy objectives over the full term of the strategy. Implementation of the short-term actions has progressed well since publication and two annual progress reports have been published to date.

A key action identified in the road haulage strategy was to establish a road freight forum with representatives from Departments, agencies, the haulage and freight industry and the logistics sector. The road freight forum held its first meeting in February 2023. It is chaired by my Department and its membership includes representatives of the National Transport Authority, NTA; the Road Safety Authority, RSA; Transport Infrastructure Ireland, TII; the Freight Transport Association Ireland, FTAI; and the Irish Road Haulage Association, IRHA. The forum formalises engagement between key stakeholders and builds on the work done in response to the international crises I mentioned earlier. It supports collaboration, which is key to identifying practical and effective solutions to support the sector to maintain Ireland's essential trade and strategic supply chains. The forum also monitors the implementation of the road haulage strategy and provides an opportunity for stakeholders to identify emerging challenges at the earliest opportunity.

The road haulage strategy provides a roadmap for how the sector can decarbonise to meet the targets set out in the climate action plan. Given that the Irish haulage sector is currently almost exclusively fuelled by diesel, I am sure Deputies will agree that decarbonisation will be a significant challenge for the sector in the medium term to 2030 and beyond. My Department has provided targeted supports to assist the sector on its journey to zero emissions. The zero-emission heavy-duty vehicle, ZEHDV, purchase grant scheme has a budget of €3.5 million in 2025. It supports the purchase of zero-emission vehicles and associated charging infrastructure. The fleet assessment audit offers businesses an assessment by an independent energy adviser, who will provide guidance on the transition to zero-emission vehicles. Two tax incentive schemes that allow operators to reduce their immediate tax bill against company profits when investing in zero-emission vehicles are in place. My Department is also looking at the charging infrastructure requirements for heavy-duty vehicles, HDVs, through the HDV electrification pathway working group. The group has been tasked to develop a strategy to set out a pathway for the electrification of the heavy-duty fleet in Ireland. I look forward to hearing the outcomes of this important work.

In regard to the ongoing reliance on diesel, I remind Deputies that the diesel rebate scheme, DRS, has been in place since 2013 and remains available to licensed haulage operators in respect of vehicles over 7.5 tonnes. At diesel prices over €1.43, including VAT, a maximum rebate of 7.5 cent per litre is provided. While not all haulage operators qualify for the scheme, it should be noted that the total number of DRS claimants in 2023 represented only 46% of the total number of eligible road haulage operators in the State. All operators are encouraged to make the best use of all available Government grants for which they are eligible.

As we cannot afford to wait for electrification measures to have an impact, the use of renewable fuels in the interim must be encouraged. We need to increase the blend of biodiesel in the national fuel mix to deliver a level of emissions savings from the existing fleet. The renewable transport fuels obligation scheme requires suppliers of mineral oil to ensure a percentage of the motor fuel they place on the market in Ireland is produced from renewable sources. For diesel vehicles, the current fuel blend available at garage forecourts is approximately 7% biodiesel. My Department intends to raise this to 20% by 2030.

I am aware, as I am sure everybody in the House is, that the cost of renewable fuels is higher than the cost of diesel and that the haulage sector has called for the introduction of subsidies for alternative fuels. While the interaction between fuel prices, taxation and a wider shift away from fossil fuels is complex and a matter of tax policy for the Department of Finance, Deputies may find it helpful to know that biofuels are fully relieved from the carbon component of mineral oil tax. This means carbon tax does not apply to biofuels, such as hydrogenated vegetable oil or biomethane, used in road vehicles, whether private or commercial.

Ireland's carbon tax is an integral part of the Government's response to the need to address climate change and meet the legally binding commitments established in the Climate Action and Low Carbon Development (Amendment) Act 2021. As annual increases in the carbon tax are implemented, the differential in tax costs between biofuels and fossil fuels will continue to widen, further incentivising the uptake of biofuels. However, demand for renewable transport fuels is growing across many sectors and supplies are likely to remain constrained given current global production capacity.

My Department recently finalised a study on the use of hydrotreated vegetable oil, HVO, in the heavy-goods vehicle sector, including the likely future availability and price, the decarbonisation potential and potential transitional incentives. The conclusions of the study indicate that unless the renewable transport fuel obligation is also reformed, increasing the use of HVO in the HGV sector will simply shift biofuel use to HGVs and away from other road sectors, thereby leading to only modest reductions in overall emissions. In addition, the study also forecast that a subsidy to equalise the price of HVO with diesel by 2030 would cost the Exchequer €502 million. That is the single-year cost of this type of subsidy and, as I indicated, the overall reduction in emissions would be minimal.

Although the financial costs of implementing sustainability initiatives can be a significant barrier for the haulage sector, I am heartened to note in the FTAI 2025 report that more than three quarters of those surveyed have sustainability policies in place. We must continue to support this transition. I will outline the concrete measures that can be implemented right now at little or no cost. Eco-driving techniques can help drivers to reduce their fuel use and emissions, while enhancing road safety for all road users. A national standard for eco-driving courses has been established and a range of subsidised or fully funded eco-driving training courses are available to HGV drivers. The promotion of digital and operational efficiencies such as load sharing and logistics consolidation hubs are also being explored by my Department.

The logistics and supply chain skills group was established in 2019 to support the promotion of careers, skills development and sustainable employment in the logistics and supply chain sector. The group has been making great progress, with support from officials in my Department, to address systemic challenges. In 2023, the group organised Ireland's first ever logistics and supply chain skills week to promote careers in the sector and engage with supply chain executives on the new skills needed now and into the future. It has become an annual event, with a plan under way for 2026 to coincide with the 19th European Supply Chain Day. Skills week also includes a dedicated event for transition year students organised by my Department that highlights the potential careers in the sector. Next year's transition year event will take place on 23 April at the National Basketball Arena in Dublin.

New training and educational opportunities developed in recent years include the transport operations and commercial driver apprenticeship scheme, the logistics and distribution one-year traineeship and the seven-month professional HGV training programme. The logistics and supply chain skills group has been working collaboratively to address the immediate driver shortage. This has resulted in several positive actions, including the removal of the quota for employment permits for HGV drivers from outside the EU-EEA. Almost 1,400 work permits have been issued to HGV drivers by the Department of Enterprise, Tourism and Employment since 2023.

My Department is working to increase the number of licence exchange agreements with non-EEA countries. We currently have agreements with Australia, Georgia, Gibraltar, Guernsey, the Isle of Man, Japan, Jersey, Northern Ireland, the Republic of Korea, South Africa, Switzerland and the United Kingdom. Agreements with Moldova, North Macedonia and Bosnia and Herzegovina are at various stages of development. Ukrainian drivers who are resident in Ireland on a temporary basis under the temporary protection directive can exchange their licence and work in Ireland once they have completed driver certificate of professional competence, CPC, training.

We need to do more to make the process of recruitment from abroad easier to understand and as efficient as possible. Officials in my Department are working across Departments to identify areas for improvement and to eliminate duplication where possible. This year, the Department of Enterprise, Tourism and Employment has agreed to no longer verify driving licences as part of the work permit application. This is a welcome development that will reduce processing times. Work is ongoing to introduce a single permit application portal but this is a medium-term action as IT developments are required.

My Department is also engaging with the Road Safety Authority on driver CPC training. Professional drivers are required under law to maintain their driver CPC by completing 35 hours of training over a period of five years. The RSA recommends completing one module per year to meet the 35-hour requirement. There are six modules in total, with each module taking seven hours to complete. Bus and truck drivers are obliged to complete modules 1 to 4, plus either module 5 or module 6 if only a single licence is held.

If a driver holds both a bus and a truck licence, they must complete modules 5 and 6. It is critical that drivers maintain their CPC to ensure road safety. This is something we cannot compromise on. However, I have heard from stakeholders that the training material would benefit from review and updating. I am pleased to inform the House that an RSA-chaired review group reviews the CPC modules on an ongoing basis. Relevant stakeholders, including sector representatives, are invited to participate. The review of module 1 was recently completed and updated training material will be ready for roll-out to trainers in the coming weeks. A review of module 4 will begin early next year.

The RSA is also examining the legislation to see where comparable training can count towards CPC requirements. For example, if a driver has a valid ADR certificate for the carriage of dangerous goods and has previously completed one full cycle of CPC training, they do not need to resit module 2. Over 600 drivers have engaged with the RSA to avail of this exemption with approximately 150 exemptions granted and 50 applications being processed. Officials in the Department will continue to engage with the RSA to consider best practice examples in other countries and whether there is scope for additional enhancements to training. While acknowledging that there is room for improvement in the process, it is also important that we do not lose sight of the fact that driver CPC is working well in the main and meets the requirements of EU legislation. Over 46,500 training days were delivered between January and September this year. There are 92 training organisations with 475 active trainers providing training at 220 training centres throughout the country. Private companies and trade representative bodies can apply to be approved as a driver training organisation which would allow them to arrange training to suit their individual needs.

While recent years have been challenging for the haulage and road freight sector, the Department provided financial support to insulate operators from the sudden and severe spike in diesel prices following the outbreak of the war in Ukraine in February 2022 and associated ongoing cost pressures faced by hauliers. Some €15.6 million was paid out by the Department in 2022 and 2023 to 3,085 and 2,828 operators, respectively, representing approximately 81% and 74% of the overall road haulage operators licensed in the State. The support scheme operated under the EU temporary crisis framework on state aid was adopted to address the economic impacts, in particular on energy prices, of the war in Ukraine. In January this year the Department received a request for financial compensation from industry representatives to support Irish hauliers impacted by the Holyhead Port closure at the end of 2024. The Department engaged constructively with the request over the intervening months, working with industry representatives and outlining the additional information required to assess the financial impacts of the closure on hauliers and to consider whether financial support could be provided. While some information was provided to the Department, it did not provide the level of detail necessary to substantiate the evidence base for the request for support. Department officials are willing to engage further with representative bodies should they be in a position to submit the additional documentary evidence needed to assess the request for compensation.

Deputies are no doubt aware that new requirements in relation to the use of smart tachographs were introduced under EU law in recent years. This includes the need to retrofit such devices in older commercial vehicles if the vehicle is engaged in international commercial activity. The requirements have so far only applied to heavy goods vehicles and passenger vehicles but will apply to vehicles over 2.5 tonnes from July 2026. These requirements are necessary to ensure the highest level of safety on our roads and to allow authorities to monitor compliance with transport-related legislation and drivers rest periods. The shortage of commercial drivers is well known to everyone in this House. We must support our drivers by ensuring they are afforded proper protections including adequate breaks and rest times. Smart tachographs allow for rigorous monitoring and enforcement of these entitlements. I have received requests for financial assistance to support the initial cost outlay associated with the retrofit obligations. The retrofit obligation was adopted in 2020 and came into effect in stages from the end of 2024, providing reasonable time for businesses to plan for the associated costs.

The costs of retrofitting tachographs are not unique to Ireland and will be similarly experienced by transport operators across the EU and the UK including Northern Ireland. I assure the House that the retrofit requirement does not apply to passenger vehicles if their only international commercial activity involves journeys to the United Kingdom, including Northern Ireland. Officials in the Department, in agreement with the European Commission, have also agreed that the retrofit obligation will not be enforced for freight vehicles that simply pass through Northern Ireland as part of a journey, provided certain conditions are met. The journey through Northern Ireland must be undertaken because it is the most efficient route from a starting point in Ireland to a destination in Ireland and goods cannot be dropped off or collected when passing through Northern Ireland. If goods are to be dropped off in Northern Ireland, regardless of whether this will happen as part of a journey through Northern Ireland or as a separate journey, the retrofit obligations apply. A similar situation arises for UK vehicles moving from or to Northern Ireland through Ireland; for example, goods arriving on a ferry to Dublin Port using the M1 to deliver the goods to Belfast. This arrangement will be in place until the end of June 2026. Officials will continue to engage with the EU in an effort to formalise this agreement with the UK before the temporary arrangement expires.

Earlier this year, I was asked to consider engaging with UK officials in relation to the HGV road user levy. This levy was introduced in 2014 and applies to all HGVs driven on all UK roads, including in Northern Ireland. Prior to its introduction, the Irish Government engaged with UK authorities seeking to exempt Northern Ireland from the charge because of the potential impact on cross-Border trade. The UK ultimately decided to maintain the levy with only very minor exemptions for Northern Ireland. The levy was suspended in August 2020 to support the haulage sector during the Covid-19 pandemic but was subsequently reinstated from 1 August 2023 with amendments to align the levy with the environmental performance of a vehicle in support of decarbonisation goals. Zero-emission HGVs are exempted from the charge. While I appreciate that the levy imposes additional costs on HGV operators, including Irish hauliers, its application is a matter for the UK authorities.

I will provide an update in relation to toll discounts, which were raised with me by road haulage representatives earlier this year. It is important to point out that the operation and management of individual national roads is a matter for TII in conjunction with the local authorities concerned. This includes day-to-day operations regarding national roads including toll roads and the establishment of a system of tolls. Officials in the Department have engaged with TII to consider whether the applicable discounts can be applied in a user-friendly manner, similar to how the discount is applied on the M50. I understand that the current system is cumbersome for hauliers and that an integrated system is preferable. An attempt was made in 2016 to implement an integrated system but it was unsuccessful. Ultimately, it is not within the remit of the Department or TII to introduce such a system, nor can the operators be obliged to change their practices. It is important to point out that toll revenues received by TII contribute to the funding of essential services on national primary and secondary roads as a whole. This includes general day-to day maintenance and operation of the network such as pavement repair and renewal, incident and emergency responses, winter gritting, safety barrier repair and renewal, energy supply and maintenance of route lighting. These essential services are necessary to ensure the national road network is managed and maintained. TII relies upon tolling revenue along with funding from the Exchequer to fund this work. It is important to point out that if tolling revenue did not exist, it would be necessary to use additional Exchequer funding to ensure that the national road network is maintained.

Everyone in this House appreciates the challenges posed to the haulage sector in recent years. I acknowledge the resilience demonstrated by the sector and thank it for its contribution to the wider economy. While ongoing challenges such as driver shortages and decarbonisation cannot be resolved immediately, I am confident the strategies being implemented by the Department will have the desired effect in the medium to long term. Officials and I are actively engaging with the representative bodies. I urge them to continue to work constructively and collaboratively with officials over the lifetime of the road haulage strategy.

This morning, I met the working group chaired by Minister Ken Skates in Wales in relation to Holyhead. A working group was set up which finalised its business this morning. Out of that, there will be a continuation of the work bilaterally between the UK, Wales and ourselves. We will continue to work to find more efficiencies and resilience on the Irish Sea between Ireland and the UK going forward.

That is a plus that has come out of the disaster that happened in Holyhead last year.

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