Dee Ryan (Fianna Fail)
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Before we proceed to the next speakers, I welcome Senator McCarthy and his guest Deeksha Agarwalto to the Visitors Gallery. They are very welcome, and I thank them for joining us. Senators Kyne, Byrne and Conway are sharing time.

Seán Kyne (Fine Gael)
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I thank the Cathaoirleach's office for choosing this Commencement matter. I welcome the Minister of State. There are three of us here who wish to raise this matter. It is an important issue.

The former Minister, Deputy Ryan, in October 2024 on behalf of his Department and perhaps on behalf of the Government - I am not sure and maybe the Minister of State can clarify that - wrote to the President of the European Commission regarding the greening of our corporate fleets. It is a good idea. With An Post, the ministerial car fleet and various other fleets, it would make sense that they would move towards greening, electric vehicles, EVs, and decarbonisation. That all makes sense. However, there is an issue in relation to the car rental fleet. For example, there are people coming over from the United States and elsewhere who arrive at Shannon Airport, Dublin Airport or elsewhere and are looking to hire a car. If they are not driving an electric car at home, they are unlikely to want to drive an electric car in a foreign country where they have to drive on the other side of the road and have concerns about range with recharging and all of that. The concern is that this is putting an undue pressure on the car rental sector. It could have negative consequences for the car rental sector and tourism as a result. It is something that there needs to be a pause on in relation to that particular sector. What engagement has the Minister of State had? Will he reflect on that?

Maria Byrne (Fine Gael)
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I thank the Minister of State very much for coming to the House. As Senator Kyne said, it is putting pressure on car rental companies and especially for people coming into the country. It is not about people who are here; it is about tourists who are coming in. Many of them find that they are going to the west of Ireland and different places in the car and it is not always feasible to charge the car. That is one of the biggest issues. Car rental companies should be exempt from this rule if it is to go ahead because we want to encourage tourists to come here. It is putting pressure on the car rental companies in terms of the number of people who do not want to take a car that they have to charge. While I understand the significance of green cars and how we should all be moving in that direction, I also understand what is impeding tourists and the car rental sector.

Martin Conway (Fine Gael)
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I agree with my colleagues. The Minister of State is very welcome to the House. The greening of the corporate fleet is a good idea; there is no point in saying otherwise. However, elements of that which do not make sense should not happen. The car rental business is going to be decimated if this directive is introduced and if we are required to green all of our car rental industry. Car rental is particularly important in counties that the Senators raising this matter and Senator Kennelly are from, such as Kerry, Clare, Galway and Limerick. County Cork benefits as well. If that industry is decimated, it is going to have a negative effect on tourism in this country because people who rent a car tend to spend more money.They tend to go to places where the tours do not generally go. They tend to be out and about. They tend to go into villages and towns and, ultimately, create a better spread of the tourism spend. If we have a situation where that is no longer feasible, then we have a problem. When something does not make sense, it should not happen. I would encourage the Minister of State to engage in this and to clarify, as my colleague, Senator Kyne, said, whether this was a Government decision or a decision of a Minister on a solo run. Either way, it has to be reversed and clarity needs to be brought to it.

Jerry Buttimer (Cork South-Central, Fine Gael)
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I thank Senators Kyne, Conway and Byrne for their contributions on this very important matter. They raised very pertinent points regarding the localities where they are from and, indeed, about the tourist market. The greening corporate fleets initiative originates from the European Commission's sustainable and smart mobility strategy from 2020, which committed to a comprehensive policy of actions to boost the uptake of zero-emission vehicles in corporate and urban fleets. In October of last year, Ireland joined a small group of like-minded member states in writing, as Senator Kyne said, to President von der Leyen at ministerial level urging the Commission to take action on corporate fleets. Having set out the pathway for a transition towards zero-emission vehicles with the CO2 emission standards and having set binding targets for public charging under the alternative fuels infrastructure regulation, AFIR, it is increasingly clear that we need to consider action on the demand side in order to push zero-emission vehicles. Corporate fleets are the EU's most important market segment, representing most new vehicle registrations.

Ireland is strongly in favour of the EU-level intervention that helps us to reach our 2030 EV targets in the first instance and those targets beyond 2030, and is advocating for timely, targeted legislation that can be agreed quickly and have the necessary impact. Ireland’s focus is on light duty vehicles, cars and small vans and the measures that can be implemented quickly and complement existing national measures, which in this case typically include a mixture of tax and grant benefits. The corporate fleet sector is diverse, consisting of large and small companies ranging from additional car company executive fleets to large shipping and freight companies, last mile delivery fleets, increasing companies and short-term rental companies. Each of these subsectors has unique conditions that would make a one-size-fits-all approach ineffective. We will be ensuring that any targets reflect this diversity and do not create any unachievable burden.

Officials from the Department of Transport have engaged with the car rental sector to discuss concerns about the forthcoming proposal, and I will bring the concerns of the three Members this morning back to the Department. At ministerial level, a meeting was recently held between the Minister of State, Deputy Canney, and the Car Rental Council of Ireland, and further engagement has taken place through our permanent representation in Brussels. The Commission's legislative proposal is expected by the end of this year. Once the proposal is published, my Department will work to assess how the proposal will affect Irish businesses in terms of the number and types of company within the scope of the proposal. We will also give consideration in due course to whether our existing supports for EV take-up need to be adjusted to better complement any EU regulation.

Seán Kyne (Fine Gael)
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Given that the Minister of State is in that Department, has he any views on this matter in relation to the severity and impact? He has three colleagues who have raised this. It is a serious matter. Will the Minister of State be taking up with the Minister the concerns expressed by Members here? As I said, this could have serious impacts in relation to the car rental sector. While it does make sense in other sectors, I do not see it making sense and nor should it proceed in the present fashion in terms of the car rental fleet.

Maria Byrne (Fine Gael)
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I agree with Senator Kyne. Certainly, any pressure the Minister of State can put on at all would be welcome. As he mentioned in his speech, there is a one-size-fits-all approach, but it does not fit all, particularly in this case.

Martin Conway (Fine Gael)
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I am in unison with my two colleagues on this. I believe we need to withdraw our support for this directive, specifically when it comes to the car rental fleet. We need to make it abundantly clear to President von der Leyen and her team that this is not acceptable, it is not going to happen, and we are not supportive of it. We cannot turn around and decimate the car rental fleet and, by extension, have a serious impact on certain important elements of our tourism industry.

Jerry Buttimer (Cork South-Central, Fine Gael)
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I am glad the three members are in unison on this matter. I will certainly reflect their concerns and the views they have articulated back to the Minister. Senator Conway, it is fair to say that nobody from our side of the House wants to decimate the car rental market and the fleet relating thereto, which is a very important part of our offering to tourists coming in and to people who need to rent cars.

The Government remains firmly committed to accelerating the electrification of private and corporate vehicles as part of its broader climate objectives. As Members will know, under the Climate Action Plan 2023, Ireland has an ambitious target of having 30% of our private fleet being electric. The transition to EVs is a key lever in reducing emissions and remains a priority for Ireland and for the Government. The electrification of the fleet would provide the most significant share of emission abatement in the short and medium term.

The comments posed by the Members are very important. As they will know, in the third quarter this year, Ireland exceeded its 2025 target of 195,000 EVs by the year end. While trajectory thus far this year shows a steady increase of month-on-month EV registrations, we need to continue that momentum. To sustain progress and meet our targets, demand-side interventions will be critical. EU measures such as the proposed recommendation on the corporate fleets, which would create clear obligations for corporate fleets to transition to zero-emission vehicles, is continuing.

I will take the Senators' views back to the Department and the Minister. I look forward to working with them further on this matter, but I will ask the Minister of State, Deputy Canney, to engage with them. I thank the Senators for making their comments, particularly as this is an important issue. I take their views seriously and will relay them back to the Government and the Minister.