Noel Grealish (Galway West, Independent)
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2. To ask the Minister for Enterprise, Trade and Employment the measures he is planning to introduce to address the impact of rising energy prices on businesses; and if he will make a statement on the matter. [18813/22]

Catherine Connolly (Galway West, Independent)
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Deputy Naughten will be introducing this question.

Denis Naughten (Roscommon-Galway, Independent)
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I thank the Leas-Cheann Comhairle for facilitating me. Focus has rightly been on families struggling with rising energy costs, which are causing serious financial hardship, but these costs are also putting great financial pressure on many businesses with regard to operational costs, transport costs and wage pressures. What active and immediate actions is the Government going to take to ease the energy cost pressures facing businesses?

Leo Varadkar (Dublin West, Fine Gael)
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The invasion of Ukraine has exacerbated the inflationary pressures that Ireland and other economies were already experiencing in the wake of the supply chain disruptions brought about as a result of the pandemic. The war and the necessary introduction of sanctions against Russia is also disrupting supply chains and leading to large rises in international prices for energy, food and other commodities. The Government recognises the additional challenge these rising prices represent for households and businesses as many are still trying to recover from the effects of the Covid-19 pandemic. Ireland imports over 70% of the energy we use and the Government cannot fully insulate individuals and businesses from developments in international energy markets that are outside of our control. However, the Government has already implemented several measures to help to reduce the impact of energy price rises on enterprises and households. These include temporary reductions in excise duties charged of 20 cent per litre of petrol and 15 cent per litre of diesel. This has been of significant benefit to businesses as well as householders. We have also introduced a 2 cent per litre reduction in the excise duty levied on marked gas oil or green diesel. The estimated cost of these measures to benefit households, businesses and farmers is approximately €320 million. For hauliers, a temporary grant scheme will provide a payment of €100 per week to help mitigate the impacts of the rising price of fuel. This scheme will operate for a period of eight weeks and is valued at €18 million. There has also been a temporary targeted intervention package for the tillage sector to the value of €12.2 million in response to the impact on the agrifood sector.

My Department is working with the Department of the Environment, Climate and Communications in leading consultations with industry to learn about the specific impacts of higher costs on Irish businesses and to hear their concerns and perspectives on the appropriate and most effective tools for policy action. This follows on from a recent meeting of the enterprise forum that I convened to hear at first hand how the war in Ukraine is affecting businesses in Ireland. The three main issues raised at that meeting were the difficulties in supply chains in Europe and around the world, recent increases in the cost of raw materials and foodstuffs, and energy security and prices.

Denis Naughten (Roscommon-Galway, Independent)
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The Tánaiste will recall that we had very detailed conversation and debates on these specific issues back in 2017 and 2018. At the time, I pointed out that energy costs have a far higher impact on inflation in Ireland than anywhere else in the EU. This is partly a result of the subsidies to the cost of green electricity, grid connections and back-up supplies provided to existing and speculatively planned data centres, which result in no substantial employment dividend here in Ireland. As the Tánaiste will know, the Government took a decision in 2018 to stop this practice of subsidising speculative developers in respect of the electricity going into data centres. When is that going to be implemented by the Government?

Leo Varadkar (Dublin West, Fine Gael)
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It is true that energy costs have greater impacts on business in Ireland. That is partly as a result of our geography. We are an island on the edge of Europe and things have to be brought here by boat and by plane before being put on trucks and trains to be transported further. It is also partly down to the way our population is distributed. Responsibility for the area of data centres falls to the Minister, Deputy Eamon Ryan. I could be wrong but my understanding is that the decision in question has been implemented. A number of months ago, the Commission for Regulation for Utilities, CRU, heavily restricted the connection of new data centres, particularly in the Dublin area but also in all other parts of the country. I might not be 100% fully up to date on that. I am not sure that measure will have a significant impact on energy prices in itself. Data centres use approximately 10% of our electricity. From some of the commentary, you would think it was more. However, we believed the share they were using was increasing too fast and that is why those restrictions were brought in.

Denis Naughten (Roscommon-Galway, Independent)
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The responsibility lies with the Tánaiste's Department. It was his Department that published the report back in 2018. The reality is that we are subsidising the cost of electricity for a sector that will account for 50% of all demand by 2030.

With regard to the public service obligation, PSO, levy, the Government announced earlier this week with some fanfare that, next October, the PSO levy will be reduced to zero or that people will actually get a rebate on it. The Government has given the impression that this is something new and positive but, in fact, it is not. This measure adheres to the rules for the PSO levy because the levy was set last summer based on projected electricity costs for the following 12 months. Rather than this sleight of hand and the suggestion that this announcement represents something new and innovative, will the Tánaiste pause the PSO levy today and stop additional charges being accrued until people start getting rebates next September and October?

Leo Varadkar (Dublin West, Fine Gael)
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My understanding of the operation of the PSO levy is that it is there to subsidise renewable energy and energy produced from peat. Given that the price of producing energy is now so high, it is no longer necessary. That is why it will be got rid of or become a negative levy towards the end of the year. I do not know how the timing of that works. I would have to talk to the Minister, Deputy Eamon Ryan, about that.

With regard to the data centre report, the Deputy is absolutely correct. I stand corrected on that. We are reviewing the role of data centres in enterprise policy. That review will be complete by the end of this quarter. We have engaged with EirGrid, the ESB, the CRU and the data centre sector as well as the Industrial Development Authority and Enterprise Ireland. A working group met on this issue on 21 March. The group produced a draft template guide for the revised policy and set out a work programme under which the group will draft the final revised policy statement.