Barry Cowen (Offaly, Fianna Fail)
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I raise this issue on foot of an ongoing review of the peat briquette production end of Bord na Móna's business. The review is clearly the result of a decline in sales of peat briquettes, although production continues by virtue of the need to stockpile. The review is centred on the operations in Littleton and Derrinlough.

Many Deputies are well aware of the history of Bord na Móna in the midlands region, particularly in my home county. The company is the lifeblood of the community and the bedrock of its economic life. It continues to contribute to education, culture and sport in the region. It is imperative that every effort is made to assist the company in its efforts to diversity and meet the demands of a changing energy and heating regime. These factors and cost of oil have affected the sale of briquettes.

Some time ago, I pointed out to the Minister that the previous Government had reintroduced and subsequently doubled the carbon tax on peat products. It did so against a backdrop of Bord na Móna's efforts to diversify into new products and methods which would enable it to thrive given that peat production and excavation is to be discontinued from 20130 onwards. Fianna Fáil sought to have a proportion of the proceeds of the carbon tax generated from Bord na Móna products held in an enterprise or innovation fund to assist with the development of alternative industry and employment in the sector.

Bord na Móna has diversified in the generations since the company commenced operations. Co-operation, negotiation and consultation were engaged in before agreement was reached between the company and the workforce. This shows the good will the workforce has shown in seeking to secure the company's future in the face of a number of challenges.

This morning, the Tánaiste stated the role of Government and Minister with responsibility for this area is one of oversight and policy making was not directly involved. Policy making played a role in the past when a Fianna Fáil-led Government saw fit to develop new power plants in Edenderry, Shannonbridge and Lough Ree that would have co-fuel potential. There is an onus and responsibility on elected representatives and the Government to ensure Bord na Móna, a semi-State company, receives State assistance in its efforts to diversify. I contend that it was a direct intervention by a previous Government, in introducing a carbon tax on peat products, that led us to the position in which the briquette factories face a live threat. More important, the Government failed to ring-fence the income generated from peat in an innovation and enterprise fund, which would have assisted the workforce and region and ensured alternative industries could emerge from this process and prosper.

While I do not wish to belittle the obligations imposed on us by carbon policy in general, if one Government saw fit to have a derogation for peat products, another Government should recognise that fact. Instead, it decided to reintroduce and double the tax without establishing an innovation fund to ensure a seamless transfer to alternative opportunities and industry. We have reached a red light and redeployment will be required between the two peat briquette plants, where possible. This is despite the fact that the ash content in the Derrinlough plant is such that production at the site is much more cost efficient than anywhere else. I ask the Government to seriously consider, even at this late stage, establishing an innovation fund using carbon tax revenue from peat industry.

Eoghan Murphy (Dublin Bay South, Fine Gael)
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3 o’clock

The introduction of a carbon tax was about sending a price signal that there is a cost associated with the combustion of fossil fuels to the detriment of the environment. Peat briquettes have among the highest carbon content of all fossil fuels. As a result, they are among the dirtiest fuels, and given the environmental impact, it is important that they are taxed.

Ireland is legally bound to reduce emissions by 20% on 2005 levels in 2020 and 30% on 2005 levels by 2030,as part of the European Commission's climate and energy package to tackle climate change. The carbon tax was introduced in 2010 as part of an overarching energy strategy and is a key tool to reduce emissions towards meeting these and other climate change commitments. While carbon tax was introduced in budget 2010, its application to solid fuels, including peat briquettes, was delayed to allow for the development of a robust mechanism to counter the large scale sourcing of coal from Northern Ireland where lower sulphur standards apply. Such a mechanism is in place since June 2011. The carbon tax was introduced to solid fuels on a phased basis, initially at €10 per tonne of CO2 emissions from 1 May 2013 and subsequently at €20 per tonne from 1 May 2014, thus bringing the carbon tax on solid fuels in line with that on all other fossil fuels at €20 per tonne of CO2 emissions.

While tax increases are unpopular, it makes sense to increase taxes in areas where some benefits can arise. In this instance, a carbon tax promotes energy efficiency, reduces emissions and reduces our dependence on imported fossil fuels. As a matter of principle the reliefs from the carbon tax are limited to ensure as wide an application as possible. Placing a carbon tax on solid fuels also offers an opportunity to develop cleaner more efficient and environmentally friendly alternative fuels. To complement the introduction of the carbon tax, especially for those at risk of fuel poverty, the Sustainable Energy Authority of Ireland provides a number of fiscal supports to energy users. The better energy homes programme provides grants - more than €200 million to date - to assist home owners improve the energy performance of their houses while the better energy warmer homes funds energy efficiency improvements in the homes of the elderly and vulnerable, making the homes more comfortable, healthier and more cost-effective to run.

In the Finance Act (No. 2) 2013, the Minister for Finance legislated for the introduction of reliefs from carbon tax for solid fuels which contain a certain proportion of biomass. Last November, this relief was commenced, which exempts the biomass element of the solid fuel from carbon tax and I understand that Bord na Móna is currently in the process of developing such a fuel which should result in a cheaper more sustainable fuel which is better for the environment. As A Programme for a Partnership Government states, "climate change is the global challenge of our generation", and work is ongoing in all Departments towards developing and implementing Ireland's first national mitigation plan, which aims to deliver a pathway enabling transition to a low carbon, climate resilient and environmentally sustainable economy by 2050. The draft plan is open for public consultation and is published on the Department of Communications, Climate Action and Environment website with submissions invited from interested parties by 23 April. A key part of developing the plan has been the preparation of robust technical, environmental and economic analysis to evaluate the impacts of a range of different climate change mitigation options. The carbon tax is, and will continue to be, a fundamental pillar of the transition towards a decarbonised economy and society by 2050.

The carbon tax was introduced in 2010 and was reintroduced by the following Government. It was always going to increase over time on a phased basis, as was indicated, to bring in line with other fossil fuel taxes and as part of the strategy to move us away from dependence on them, for which we pay a significant amount to import. They are also detrimental to the environment when we burn them.

Barry Cowen (Offaly, Fianna Fail)
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I thank the Minister of State for his response. I had hoped the Minister for Communications, Climate Action and Environment who has an oversight role relating to Bord na Móna among other semi-States, would be present to deal with the matter but I take it his Department felt it was more appropriate for the Department of Finance to respond considering its responsibility for the implementation of the carbon tax. I acknowledge the will of the Government to move towards a decarbonised economy over time but, unfortunately, it has failed to recognise the value of peat production and the energy sector in the midlands and, in particular, Bord na Móna's role in that regard. The company has produced over time excellent fitters, mechanics, and electricians and through education thereafter, helped the economies of the towns and villages they built to prosper in the region and to expand the opportunities for the children of these staff which were not necessarily available to those who were at the forefront and put in place initially.

The Government has failed to recognise that this sector in its efforts to diversify and move to a different economy and in its efforts to move to having different driving forces within the local economy should be shown the respect it deserves in so far as a fund should have been put in place, which could have derived from the doubling of the carbon tax by the previous Government. It was an ideal opportunity to help and assist Bord na Móna and other companies within the region to ensure alternatives enterprises, industries and opportunities would ensue over time, considering the advancements that have been made in respect of infrastructure and connectivity to Dublin and other centres of population, education and so forth. That opportunity was lost. While I do not doubt the merit of the carbon tax, I implore the Minister of State to provide alternative opportunities in this region by ring-fencing the carbon tax yield from the products manufactured by companies in the region for reinvestment in the community. An innovation fund should be put in place as peat production is decimated, as evidenced by falling sales, notwithstanding the fact that the staff need to know about their future and their prospects for redeployment. Should they not be recognised and their future provided for by virtue of the fact that the ash content is at such a level that it is very productive for the Derrinlough factory to continue to produce briquettes? I implore the Government to reconsider ring-fencing the carbon tax on these products to find alternatives.

Eoghan Murphy (Dublin Bay South, Fine Gael)
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The carbon tax was always going to increase, as per the plan when it was introduced in 2010, to bring it line with the taxes on other solid fuels in the market. It was not, therefore, a question of the Government deciding to double the tax. The plan on its introduction in 2010 was to bring it in line with the tax on other fossil fuels and that has happened. The Government is well aware of its responsibilities in this regard and it is meeting them. A number of supports remain in place while these changes take place. The changes were well flagged and mitigation measures were taken.

The transfer to alternative opportunities has been happening. Bord na Móna staff has expertise and it is doing excellent work. The Government and the Deputy understand that the impact of the carbon tax will inevitably be evidenced in the sale of peat briquettes, which is what is happening, but it also provides an opportunity and an incentive to transition to cleaner and more suitable fuels in the future. The chief executive officer of Bord na Móna stated the company has been undergoing seismic change in the transition from its traditional peat-based activities towards more sustainable businesses. This also demonstrates that the carbon tax is having the desired effect with industry responding to the changing landscape and working towards delivering a cleaner, healthier future for all our citizens.