Thursday, 10 November 2022
Nithe i dtosach suíonna - Commencement Matters
Renewable Energy Generation
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?
I thank the Senator for the opportunity to discuss this question on the role of direct air capture, DAC. Direct air capture of CO2 involves a system where air from the atmospheres flows over an absorbent material and selectively removes the CO2. The CO2 is then released in a concentrated stream for disposal or for reuse. The absorbent material is regenerated and the CO2-depleted air is returned to the atmosphere. DAC differs from carbon capture and storage, which seeks to capture CO2 from point sources such as flue gases from large industrial processes, and this is followed by transportation by pipeline and then injection into geologically secure storage.
DAC is still in its infancy and it is currently categorised as having a technology readiness level of six on a scale of one to nine, meaning it is still in the prototype phase and not yet ready for full commercial deployment. According to the International Energy Agency, there are 18 DAC plants operating worldwide and they are capturing almost .01 megatons of CO2 per year. A 1 megaton of CO2 per year capture plant is in advanced development in the United States. DAC plants are currently very expensive and they are energy intensive. A significant factor in their deployment will be a plentiful economic supply of renewable energy. Pioneering countries in DAC development are those with such resources and these will include countries like Iceland, which has abundant geothermal and hydro sources.
The next climate action plan, the climate action plan 2023, is currently under development. It will provide an update on the progress being made in meeting Ireland's national climate objectives and it will seek to identify any challenges or obstacles in regard to this progress. This plan will build on the actions from the 2021 climate action plan, such as commitments to increasing the proportion of renewable electricity, including increased targets for offshore wind energy, and to enable modal shifts, such as extra walking, cycling and public transport journeys per day by 2030 and supporting the take-up of electric vehicles to reach almost 1 million vehicles by 2030.It will increase our supply of skills and resource capacity to make retrofitting more affordable through the national retrofit plan. It will provide for faster uptake of carbon neutral heating and increased electrification of high-temperature heating in our enterprise sector, as well as the phasing out of high-level warming potential F-gases. It will reduce our emissions within the agriculture sector, while supporting world-class food production through an innovation- and science-based approach. This includes a reduction in chemical nitrogen and more targeted use of fertiliser, while maintaining our position as a global leader in grass growth through multispecies swards.
All these measures and more will be required by Ireland as it seeks to reduce its greenhouse gas emissions by 51% by 2030, relative to 2018 levels, and to achieve net zero emissions by 2050. Action 124 in the Climate Action Plan 2021 provides for the development of carbon capture and storage, CCS, as opposed to DAC by 2030. Its development is also challenging but it could remove further emissions from the system. We will therefore develop a policy framework and roadmap for the provision of CCS. In its current configuration, DAC does not feature as an option in the plan but, in due course, as we progress in reducing our emissions, increasing our supply of renewables, and DAC becomes cost competitive and technologically more advanced, it will become an option for inclusion.
That is excellent. The whole point I am bringing forward is to get the Government thinking about this technology. I am pleased to see it is willing to do that. The Minister of State has come to the House to say it is not accessible as of today but, as we progress along our climate action targets for the rest of the decade and beyond, it will become more feasible. It is very important, similar to our hydrogen strategy, that the Government starts planning for it now so that, when it becomes more financially viable, we can go for it. We should do the work now so that, when it becomes viable, we will have a plan in place and we will just have to roll it out. It can become one of the many tools the Government uses to reach our 2030 and 2050 targets. I am very pleased to hear the Government is certainly open to examining it. That is very useful. As I said, it has an important role to play. We see what is being done in the USA and the United Kingdom. It could be a very useful weapon in our arsenal to hit our targets in 2030. I am very pleased by the Minister of State's response. I thank him for that.
There are three key responses to the mitigation of climate change. There is the switch to renewable energies, such as wind power and solar power, to replace fossil fuels. We then have energy efficiency, for example, retrofitting homes and, finally, measures that remove carbon dioxide directly from the atmosphere. Those things all have different prices per tonne that we line up, but we do not just go with the one measure that has the best answer. We have to have an array of things. It is like a balanced diet. We need an approach with all those different measures taking place. On price, even if it is very expensive per tonne to use one of these technologies, we expect that will change over time. There will a requirement for the removal of CO2. We believe renewable energy and energy efficiency measures, such as insulation, will not be enough on their own. There are currently many technologies, which are not deployed or are cost prohibitive, that are very likely to be there. I visited a geothermal energy research centre in Technological University Dublin yesterday. That technology will also be a big part of the future for Ireland. We will not write off any of these technologies because they are too expensive right now. We will keep them under review. I expect there will be room for CCS and DAC in the future.