Seanad debates

Tuesday, 15 May 2018

Commencement Matters

Renewable Energy Projects

2:30 pm

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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I welcome the Minister, Deputy Naughten.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Fianna Fail)
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I welcome the Minister to the House. Last year I raised the European Commission's proposal to revise the renewable energy directive. I pointed out that the proposals to phase out biofuels made from EU-produced sugar beet, field corn and rapeseed would remove an income stream worth €5 billion to €6 billion per year to EU farmers, devastate rural economies, close the best immediate option for decarbonising transport and destroy investor interest in the biofuel industry.

I pointed out that by chopping and changing EU biofuel policy the European Commission has had a devastating impact on existing investments in sustainable EU biofuel production. Plants have been closed or mothballed. Investment proposals have been shelved. Jobs have been lost and thousands of farmers have lost the market for their products. In the UK alone investors have seen hundreds of millions of euro wiped off their investments.One of Spain's largest companies went to the wall. A survey of investors carried out by German industry body VDB found that 81% of those surveyed believed the Commission policy will cause a reduction in investor confidence.

The destruction of investor confidence by the Commission will have a negative impact on the efforts that have been under way to attract private investment to restart Ireland's sugar industry through joint sugar and ethanol investment. The European Commission's policy shift lacks any hard scientific evidence to back it up. The Commission has been shown to have made fundamental errors from the outset. It has literally got its sums wrong in calculating the relationship between world commodity prices and biofuel outset. I am sure the Minister is aware that the Commission's impact assessment was queried from within the Commission itself. The Commission's proposals are completely out of line with biofuel policies being followed by governments around the world. As I pointed out on the last occasion on which I raised this matter in the House, Europe's farmers, in partnership with producers of EU sustainable bioethanol, could do the following: boost farm incomes; create investment that supports rural communities; bring jobs to areas that need work; cut Europe's need to import animal foodstuffs, many of which come from GMO grains and are contaminated with antibiotics; help cut Europe's dependence on imported fossil fuels; help Europe cut greenhouse gas emissions; and reduce the pollution from road transport for so many of Europe's cities which threatens the lives and well-being of so many EU citizens.

I welcome the fact that the Minister, Deputy Naughten, recently announced that it is his intention to increase the obligation to blend crop-based biofuels into road transport fuels. I had hoped the Minister would announce he was moving in this direction when I raised this issue in my previous contribution in this regard on Commencement matters, which was perhaps last year, but it is better late than never. I ask that the Minister give the House an undertaking that Irish officials will actively support conventional biofuels in the discussions which are ongoing in Brussels between the Commission, the Council and the European Parliament, support the line taken by the member states that are resisting the attempt to phase out sustainable "first generation" biofuels, and, most importantly, commit Ireland to pressing for an amendment to the current proposals which will ensure that all biofuels produced and marketed in the EU comply fully with the sustainability provisions contained in the 2016 Paris Agreement.

I ask that the Minister make available to the House the details of the line Ireland is following in the trilogue discussions. It is so important we know what line the Government is taking on this. I thank the Minister for coming before the House.

Photo of Denis NaughtenDenis Naughten (Roscommon-Galway, Independent)
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I thank the Senator for raising this important matter. The 2009 renewable energy directive established a common framework for the promotion of energy from renewable sources. It set Ireland a target of 16% of all energy consumption to be from renewable sources by 2020, with a target of 10% for the transport sector. Ireland aims to meet the 10% transport target through the increased use of sustainable biofuels, with electric vehicles also making a contribution. The deployment of biofuels through the biofuels obligation scheme will be the primary mechanism to ensure that Ireland's renewable energy target of 10% for transport will be met. Provisional figures for 2017 indicate that approximately 7% of our energy needs in the transport sector were met from renewable sources, mainly through biofuels.

The European Commission published the Clean Energy for All Europeans package in November 2016. The focus of this package of eight legislative proposals, which includes an amendment to the renewable energy directive, is on the period post-2020. The provisions of the proposed renewable energy directive build on the existing directive to provide a framework for the development of renewable energy out to 2030. Currently, the share of biofuels produced from crops grown on agricultural land that can be counted towards the 2020 renewable energy targets is capped at 7%. The level of these biofuels in Ireland is currently about 1%. The proposal put forward by the European Commission for the revised renewable energy directive is that the 7% limit would be reduced to 3.8% by 2030. The negotiating position agreed by the European Parliament is that the cap would be set at the level reached by member states in 2017, subject to a maximum of 7%.The general approach agreed by Ireland and other member states at the European Council in December 2017 is that member states may maintain the 7% limit to 2030. Along with a number of member states, Ireland supports the maintenance of the 7% cap for crop-based biofuels as set out in the Council's general approach. The trilogue negotiations on the proposed renewable energy directive are currently under way. Agreement has yet to be reached on a number of issues, including the cap for crop-based biofuels and targets for advanced biofuels.

Ireland's biofuels obligation scheme is a crucial policy measure that increases the use of renewable energy and decreases emissions in the transport sector. It was introduced in 2010 and requires fuel suppliers to ensure that biofuels make up a certain proportion of the fuel used in the road transport sector. Biofuels must meet strict sustainability criteria to qualify under the scheme. We discussed this issue at length at the joint Oireachtas committee. Progressive increases in the obligation rate, which is currently set at 8%, have led to the increased use of biofuels.

In December 2017, my Department held a public consultation seeking views on the implementation of increases in the biofuel obligation rate in 2019 and 2020 and on how the scheme will be developed into the future. A key theme of the responses received was the need to provide certainly to industry and stakeholders to allow longer term planning. Taking this into consideration, last month, I published a policy statement setting out the proposed future development of the biofuels obligation scheme in this country. The statement set out the following six actions: continue the biofuels obligation scheme until at least 2030 with progressive increases in the level of obligation and to develop the scheme in line with EU energy policy; increase the biofuel obligation rate to 10% by volume from 1 January 2019; increase the biofuel obligation rate to 11% by volume from 1 January 2020; reduce the carryover of biofuel certificates from 25% to 15% from 1 January 2020; work with industry and stakeholders to further increase the use of biofuels post-2020; and carry out public consultations on future obligation rate increases every two years post-2020. The scheme currently contributes an estimated 450,000 tonnes in carbon emission reductions each year towards our national targets. The changes I announced last month will increase this contribution to over 600,000 tonnes annually.

The policy statement will provide clarity for stakeholders and facilitate the longer term planning required to increase the use of biofuels. Similarly, the general approach agreed by Council to maintain the existing 7% cap on crop-based biofuels, which Ireland continues to support, will provide certainty for the industry and other stakeholders.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Fianna Fail)
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I thank the Minister for the reply. We all know the issue here is funding. Despite many commitments to funding, we have seen little of it.

I welcome and note that the Minister has made waves on this proposal but we need to hear from him on a regular basis what line Ireland is following in this area. We also need to ensure that all biofuels comply with the sustainability provisions contained in the 2016 Paris Agreement.

I note the Minister is working on this matter. This is very important, particularly for my own area of Carlow, where it is hoped to revive the sugar factory. There are many farmers and other people interested in this happening. Carlow is the ideal location for a sugar factory and, going forward, I will be working to make this happen.

Photo of Denis NaughtenDenis Naughten (Roscommon-Galway, Independent)
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I have clearly set out Ireland's position at Council and in the trilogue process. Over the next ten years, we will spend €22 billion on climate-related activities, which is €1 in every €5 being spent under the national development plan and is not an insignificant amount. I defy anyone in this House or the other House to reference the sugar industry with me. I was the one who stood up at the public meetings and who took the abuse in this House and the other House for trying to defend the sugar industry. I recall being browbeaten by the Government and many farmers when I tried to defend the retention and development of a sugar industry in this country.Shame on all of the organisations at the time. I was, sadly, proven right and now we are in a situation where we are trying to re-establish an industry because of the shortsightedness of the Government and the sugar industry at time. They preferred to take the quick shilling from the European Commission rather than look at the long-term future needs of this country.

Photo of Gerry HorkanGerry Horkan (Fianna Fail)
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That concludes this Commencement matter.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Fianna Fail)
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I was not part of that Government. I assure the Minister that I will be fighting hard for a sugar factory. We should have our sugar factory back.