Garret Ahearn (Fine Gael)
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The Minister of State is very welcome to the Chamber. Ireland's whole-of-government circular economy strategy commits us to reducing waste, extending product lifespan and embedding reuse and recycling in every aspect of how we consume and do business. These are ambitious though necessary goals, but in reality our current system is being undermined by global e-commerce. Irish consumers now make more online purchases than almost any other nation in Europe, yet too many of those goods come in from distance sellers who fail to meet Irish recycling and take-back obligations. Compliant Irish retailers are left carrying the cost by paying for recycling and recovery schemes that overseas competitors are simply avoiding. This creates two major problems. The first is a deep competitive imbalance, as domestic retailers, especially small and medium enterprises, are shouldering the financial and administrative burden of compliance while global sellers escape equivalent obligations. The second problem is the risk to Ireland’s environmental targets. Our national recycling rate has stagnated at 41% for the past decade. This is well short of the EU’s 55% target for 2025. Without decisive action we risk missing those binding targets and exposing the State to significant EU penalties, while damaging consumer confidence in our recycling system.

There is strong public support for closing this compliance gap. A new nationally representative survey of 1,000 consumers commissioned by Digital Business Ireland and conducted by Amárach shows six in ten shoppers say they would be less likely to buy from an online retailer that does not contribute to Ireland’s environmental and circular economy targets. Some 80% of consumers expressed at least one concern regarding distance sellers. Cross-border e-commerce is widespread. Some 55% of consumers made at least one online purchase in the past month that required shipping from outside the State. These findings reinforce what Irish businesses have been saying, which is that the public want a level playing field where everyone who profits from the Irish market contributes fairly to its sustainability and where responsible Irish retailers are not subsidising free riders.

There is a straightforward, proven and fair solution, namely, the pay-on-behalf-of model. This approach, already implemented in France, Germany, Italy and Spain ensures online marketplaces take responsibility for registering, reporting and paying environmental compliance fees on behalf of distance sellers who fail to do so. In practice, this means any seller unable to provide an Irish registration number is automatically enrolled in the marketplace pay-on-behalf-of scheme. The marketplace then reports and pays the relevant compliance fees to Irish authorities. This model delivers fairness, simplicity, competitiveness and environmental progress. France’s experience shows such systems can be implemented smoothly. Amazon, for example, already integrates pay-on-behalf-of compliance services into its platform, which proves it is both practical and scalable. Is the Department actively assessing the feasibility of introducing a pay-on-behalf-of model or similar solution in Ireland and, if so, what timeframe is envisaged for the consultation on, design of and roll-out of such a system?

Colm Brophy (Dublin South West, Fine Gael)
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I thank the Senator. I am obviously taking this opportunity to reply on behalf of the Minister. Over the past two decades Ireland has made significant progress in moving away from disposal as our primary treatment option for waste. Ireland’s national waste action plan for a circular economy provides a roadmap to transition to a circular economy in the decade ahead. One of the key objectives in this action plan includes making producers environmentally accountable for the products they place on the market. Ireland uses the extended producer responsibility, EPR, model to deal with waste streams from electronic and electrical equipment and batteries. This model is based on the producer pays principle. In a circular economy, producers must be held to account for the sustainability of the products they place on the market and EPR schemes are an effective method to achieve this. The Irish compliance schemes for WEEE and batteries are WEEE Ireland and ERP Ireland. The schemes are funded by a combination of producer fees and visible environmental management costs charged on certain items of electrical and electronic equipment.

Producer responsibility legislation is designed to ensure producers of relevant goods contribute to the cost of collecting and recycling these goods when they are no longer in use. Ensuring all obligated producers pay their share is critical to the credibility and success of EPR schemes.Online retailers or distance sellers, by virtue of their number and location, present a particular challenge for EPR scheme compliance in Ireland and across the EU. This is a critical issue for EPR. Free-riding distance sellers enjoy a cost advantage over their counterparts who pay their EPR fees. Ensuring a level playing field across different business models is vital for fairness for EU producers. The Department is working with stakeholders and regulators to tackle this issue both systemically and at the level of individual operators.

In Ireland, the Environmental Protection Agency and local authorities have enforcement roles under the relevant legislation. Those bodies work together and with EPR organisations to ensure compliance in the Irish market and to contribute to the achievement of EU recycling targets. The EPA is responsible for enforcing certain obligations on both distance sellers and distributors under WEEE and batteries regulations and may take a prosecution for a summary offence for failure to comply with regulations.

Other approaches, such as a pay-on-behalf model led by a host online platform, also offer opportunities to promote compliance. This is where an online platform, as the Senator indicated, would provide simplified compliance on behalf of their sellers, who may be small producers and perceive the risk of non-compliance as outweighing the benefits of joining a producer responsibility scheme. Producers would collectively delegate EPR registration, reporting and payment obligations to a nominated authorised representative via their online marketplace platform, and would pay their compliance fees to the platform.

Furthermore, the European Commission is preparing a legislative proposal for a circular economy Act to be published next year. This represents an opportunity for the EU to strengthen enforcement around this issue and the Department will actively support measures proposed to promote fair competition in the EU market.

Garret Ahearn (Fine Gael)
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I thank the Minister of State for his response. As he said during his contribution, it is important he recognises there is unfairness within the marketplace at the moment. Is it is possible to get further detail from the Minister's office on the legislative proposal that will be published next year? It is important we work with our EU market. This is essentially about fairness. We are talking about small and medium-sized businesses in Ireland that have a competitive disadvantage in relation to other businesses across the world. Obviously, we are heading into the Christmas period. More people spend money during this time of year, whether it is online for Irish companies or abroad. That disadvantage is increasing year on year.

While it is welcome that something will be published next year and we will work with the EU, it is vital for businesses across our country, particularly small businesses, that fairness is put in place as quickly as possible. I ask the Minister of State and the Department to prioritise this. We had a budget a number of weeks ago that was, essentially, focused on retaining and supporting local businesses. This is another element where we can play our part to support them.

Colm Brophy (Dublin South West, Fine Gael)
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I will absolutely raise this matter with the Minister on the Senator's behalf. I know he has raised it directly with the Minister. The point he made is very valid. This is an unfairness to our local, small, indigenous businesses trying to survive and operate in a market where they are compliant and others have an advantage. It is important that it is looked at as a priority, as the Senator said. I will raise those concerns directly with the Minister.

Malcolm Noonan (Green Party)
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Táimid ag fanacht leis an Seanadóir O'Loughlin; níl sí anseo fós. Sin deireadh an chláir.