John McGahon (Fine Gael) | Oireachtas source

I thank the Minister of State, Deputy Ossian Smyth, for taking this Commencement matter. I am sure we will all agree that the issue of our time is the energy transition necessary to balance climate change, sea level rise and the pace of change required to reach net zero by 2050. For political leaders who are continuing to legislate for these changes, we must maintain the support of the people at every stage and show them that this transition will mean jobs and opportunities with green tech, the green economy and so on. Direct air capture is an example of this.

Everything that has happened in Ukraine this year has shown us how harsh our world is and it has revealed many of our energy vulnerabilities. Our geographical position on the periphery of Europe and our wind resources mean that we can actually deliver where the European power market is failing. Europe is now a price taker for hydrocarbon fuels. It depends on parties outside the Union for energy security and that is going to remain the same for the foreseeable future. As we migrate to carbon neutrality, the future means CO2 will become the next globally traded commodity. We are ploughing into a future where this new commodity will significantly influence the price of our livestock, gasoline, transportation and electricity networks. This commodity is already included in the operating expenses of nearly all European businesses. The relative price of CO2 and its disposal could give nation states and their corporations a competitive age.

Europe, including Ireland, is lagging behind its main trading partners, which are the USA, the UK and Norway, in terms of the regulatory regimes to support industries that can benefit from carbon offsets. For example, the USA actively supports carbon capture and storage, direct air capture and carbon neutral fuels. These technologies are energy intensive. They need innovation and technology improvements and political buy-in to scale and reduce costs. These technologies could also allow Europe to control its carbon refining capacity. Carbon removal technology needs support through regulation and incentives to enable early investment. In the same way that it allowed our wind and solar energy to grow and reach a stage where Government support is no longer needed, carbon management could be one of the keys to securing our future and a much greener and more sustainable way of life.

I am here to ask what are our plans to capture this opportunity in Ireland, what is needed and what we need to do. I have three key asks, and I would be very interested to have the views of the Minister of State and thus the views of the Government. First, the only way to compensate for the use of fossil fuel is permanent disposal of CO2. Do we have an entire certification process that recognises and considers life-cycle analysis and permanent removal of CO2 technologies? Do we realise that not all CO2 is equal and that the only way to compensate for fossil fuel use is the permanent disposal of CO2?

Second, do we support first-of-a-kind facilities and technologies? Investors need certainty, scalability, administrative ease, distribution of costs and public acceptance to attractive investment. Business models must encourage investors to take on the risk of first-of-a-kind carbon removal technologies. Are there plans within Government for carbon price subsidies, such as the 45Q incentive in the United States, that create financeable revenue streams and derisk investor sentiment? That critical area requires integration into European Union and Irish climate policies.

Third, what is our policy for integrating carbon removal into compliance markets? Are carbon credits from carbon removal technologies able to operate competitively in Europe's regulatory and voluntary carbon markets today? For example, as it currently stands, the EU emissions trading scheme, ETS, does not incentivise greenhouse gas removal at all. Should the Government go to the European Union and say we should be looking at the ETS as an appropriate place for new and innovative technologies to trade their carbon credits?