Eamon Gilmore (Dún Laoghaire, Labour)
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Question 134: To ask the Minister for Enterprise, Trade and Employment the changes to enterprise policy he will undertake in order for Ireland to meet its commitments under the Kyoto Protocol and EU Environment agreements relating to the emission of greenhouse gases; when these policy changes will take effect; the reason he has failed to adequately address the environmental impact of business and assist businesses in reducing their carbon outputs; and if he will make a statement on the matter. [2549/07]

Micheál Martin (Cork South Central, Fianna Fail)
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Enterprise policy over the past number of years has been very successful in achieving a decoupling of growth in emissions from economic growth. The review of the National Climate Change Strategy which was published by my colleague, the Minister for Environment, Heritage and Local Government last July, shows that emissions per unit of GDP in 2004 were 48% of what they were in 1990. In fact, while GDP grew by 155% between 1990 and 2004, emissions in the industry, commercial and services sector grew by only 13%. This achievement in curbing emissions growth in the industry sector is quite impressive when we take into account the fact that industrial production increased by 330% over the same period. Moreover, the growth in emissions in the industry, commercial and services sector, at 13%, is significantly lower than the national growth in emissions of 23% over the same period.

However, despite the success which has been achieved in curbing emissions in the enterprise sector, my Department is fully conscious of the need to continually engage in initiatives to ensure that the enterprise sector will be able to meet its Kyoto commitments. In this regard, my Department published a Sustainable Development Strategy in 2003, one of the four key goals of which was aimed at ensuring that appropriate mechanisms were established to assist the enterprise sector in meeting its obligations under the National Climate Change Strategy. It has transpired that the most important mechanism which has been developed in this regard is the EU Emissions Trading Scheme.

The EU Emissions Trading Scheme is now regarded as one of the key measures in Ireland's strategy to meet its Kyoto target. It is also regarded as a flagship policy at EU level to combat the threat of climate change. The Scheme has been operating on a three year pilot basis since 2005. The second phase of the Scheme will cover the Kyoto commitment period of 2008-2012. It operates on a "cap and trade" basis, whereby emission caps are set for each of the installations covered by the Scheme. If an installation exceeds its cap, it must buy allowances. Similarly, if an installation manages to reduce its emissions to a level below its cap, it can sell allowances. The Scheme thus provides a strong financial incentive for firms to reduce their emissions by investing in more efficient technology or changing their processes.

The Emissions Trading Scheme applies to more than 100 installations in the Energy and Industry sectors in Ireland, encompassing the most significant emitters of CO2. Its importance as a mechanism for reducing emissions in the industry sector arises from the fact that 100% of process emissions and approximately 80% of combustion related emissions from manufacturing industry come within its scope. The level of CO2 that each installation is permitted to emit is set out in a National Allocation Plan which must be approved by the European Commission. As already stated, if any installation exceeds that cap, that installation will have to buy allowances. Consequently, a very effective mechanism is now in place to ensure that the industry and energy sectors of the economy will make a very significant contribution towards meeting Ireland's Kyoto commitment.

Apart from the Emissions Trading arrangements, Enterprise Ireland offers a set of dedicated supports to companies aimed at increasing awareness of, and promoting, eco efficiency in their operations.