JOINT COMMITTEE ON COMMUNICATIONS, MARINE AND NATURAL RESOURCES debate -
Tuesday, 6 Jun 2006

Scrutiny of EU Proposals.

Chairman

Last week the committee agreed to scrutinise five EU legislative proposals. We will take the Green Paper on Energy Efficiency or Doing More With Less, COM (2005) 265, first, broadcasting second and fisheries third. I welcome Ms Sara White, assistant secretary, Department of Communications, Marine and Natural Resources, and Mr. Raphael Kelly, principal officer at the Department. Ms White will make a brief presentation, which will be followed by a question and answer session. I draw attention to the fact that while members of the committee have absolute privilege, this privilege does not apply to witnesses appearing before the committee which cannot guarantee any degree of privilege to witnesses. Members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

I invite Ms White to make her presentation.

Ms Sara White

I thank the committee for the invitation. I will make a Powerpoint presentation, which I will go through as quickly as possible, as I am mindful that members will have a number of questions. The Green Paper on Energy Efficiency was published in June 2005 with the declared aim of acting as a catalyst for renewed energy efficiency initiatives at all levels in the European Union. It also aims to kick-start an international effort to address climate change and the benefits for expanding and developing economies of energy efficiency strategies. The EU has been to the forefront of efforts to make energy efficiency a global priority. Since the Green Paper was published, we have experienced a new wider impetus on energy policy in Europe, including the Hampton Court Declaration under the UK Presidency, the wake up call on security of supply of gas in January, oil and gas prices increasing exponentially and the increased focus on oil peak. The Commission's Green Paper on energy policy was presented to the Council in March 2006 and, coupled with the conclusions of the spring European Council, they have launched the EU on the road to a cohesive energy strategy, of which a pivotal component will be energy efficiency. Similarly, the International Energy Agency, working in response to G8 and IEA Ministers, is focusing on energy efficiency technology and innovation. The UN Commission on Sustainable Development is also focusing on energy efficiency strategies.

Before the end of 2006 the European Commission will present its action plan on energy efficiency and the energy strategy overall will have a timetable of spring 2007 under the German Presidency. The energy efficiency and biomass action plans will be the hallmark priorities of the Finnish Presidency, which commences on 1 July. Energy efficiency was highlighted by Commissioner Piebalgs when he visited Ireland in March. He also appeared before the committee. He regards energy efficiency as the number one priority for the European Union and the world. He set the issue in the context of the three pillars of energy policy and indicated it was a measure which can address all three objectives of energy policy, namely, security of supply, competitiveness and environmental sustainability. According to the Commissioner, energy efficiency is a must rather than an option.

All aspects of energy policy are inter-related and inter-dependent. The European Union has been to the forefront of increasing energy efficiency and few, if any, other regions have placed demand reduction and the development of alternative renewable energy sources at the heart of energy policy. The delivery of cost-effective measures, which by definition energy efficiency should be, will contribute to the challenges of supply, competitiveness and environmental sustainability. This is a priority policy objective which Ireland, as an EU player and in our own direct interest, should fully support and must deliver.

As I indicated, the Green Paper sets the agenda and rationale for a sustained, all-embracing and ambitious drive for energy efficiency at all levels in the European Union. Better information is a key for all consumers, whether business, individual energy consumers, the public sector or transport. As regards investment decisions in the broadest sense, the Commission highlights disincentive problems and a lack of joined up budgeting in, for example, business. As regards true price signals, current pricing systems for energy products do not point consumers to patterns of consumption which offer a more economical and rational use of energy. Relative energy value of products, environmental impact and external costs, including social costs, need to be factored in.

With regard to improving Europe's competitiveness as a result of enhanced strategies, energy efficiency delivers a competitiveness, productivity and jobs and growth dividend. In 2005, the Green Paper calculated that the European Union could save up to 20% of energy consumption per annum, amounting to an equivalent of approximately €60 billion depending on price developments. This calculation was based on an assessment of an oil price of $30 per barrel. The price has increased significantly in the intervening 12 months.

To realise savings in energy net savings must be reinvested to create growth and jobs, a point emphasised by the Commission. The societal benefits are self-evident and include better living conditions and the potential for the creation of new high quality jobs. The Commission posits the potential for 1 million new jobs across Europe and highlights that energy efficiency provides an important trade opportunity in energy efficiency equipment, services, technology and expertise in a global sense.

I have referred to the three pillars of energy efficiency which form a crucial part of European energy strategy. It is necessary to highlight the role of energy efficiency as a fast, effective and efficient measure for reducing emissions and improving air quality and the environment generally. Mitigating environmental impacts of energy use is a key deliverable.

With regard to security of supply, economies in the European Union and across the globe acknowledge the importance of action in energy efficiency to reduce waste and cap or reduce energy demand. The Green Paper alludes to a number of self-evident areas to target. Buildings, appliances and, in particular, transport require specific focus. Consumer benefits will be realised through behavioural change and targeted information and protection of consumer strategy. This links in to the importance of choice, quality, transparency of pricing and energy mix for consumers.

The Green Paper also highlights the unique opportunity to radically improve fuel efficiency across EU generation capacity. Energy waste levels in generation run at 66%, a stark statistic. CCGT technology can deliver 50% to 60% efficiency and is identified as a key in this regard. It is also relevant to Irish considerations. The level of new generation capacity needed across Europe up to 2030 is estimated to be over 500 GW. There is a considerable multi-billion euro investment under way and it is important that individual member states promote, through CCGT, distributed generation — I refer to unused heat — and co-generation using increased renewable energy resources.

The prospect of white certificates, whereby suppliers and distributors are obliged to undertake energy efficient measures for final users, is referred to in the Green Paper. Mr. Raphael Kelly might speak on the EEES directive.

It is worth noting the example of the Netherlands in the context of voluntary agreements in the industry sector. The Netherlands has one of the best performing economies in the world in terms of energy efficiency. It must be debated whether such an approach can obviate the need for mandatory national measures right across the board. The Irish LIEN programme, under the auspices of Sustainable Energy Ireland, and the new energy agreements comprise good examples of ways in which to engage industry on energy efficiency.

On transport, regarding which the energy efficiency potential is self-evident given that we are all at a pretty low base, the EU transport sector must focus particularly on energy efficiency strategies for Europe. Regarding congestion management, pertaining to both aviation and land-based traffic, intermodal transport is to be encouraged, as it is under the MARCO POLO programme. The seventh framework programme is relevant regarding research into vehicle technology. Behavioural change and spatial strategies, both urban and rural, are also dimensions of the transport challenge.

The European Union has majored on the international global dimension and the Commission certainly intends to mainstream energy efficiency initiatives in international co-operation agendas. Tackling energy demand, climate change and prices, and, by definition, achieving energy efficiency by way of response, comprise a global challenge. I have instanced the G8, the International Energy Agency and United Nations Commission on Sustainable Development as actors on this stage.

Energy efficiency is a key issue for energy-producing and energy-importing countries. The level of waste in the production of oil and gas is startling according to the International Energy Agency. Energy efficiency must be integrated into global strategies for security of energy supply and climate change mitigation according to the Commission.

I have referred to the trade benefits to the European Union. The energy efficiency, manufacturing and technology sector is liable to accrue distinct competitive benefits and business opportunities.

The OECD and IEA have a key role in international co-operation. Aviation is obviously a quintessentially global industry and there will be global challenges to overcome. The role of the WTO in terms of tariff treatment for energy efficiency products is posited by the Commission as an area for exploration. It pointed to the prospects of renewed EU-US dialogue, noting that, from the US perspective, demand-side policies are being accorded far more robust treatment than was hitherto the case.

The coherence of EU energy policy in conjunction with EU development policy is a cornerstone in the Commission's eyes and it is underlined in its communication on policy coherence for development. We are in accord with this.

Energy efficiency is a critical imperative for developing countries. Economic and social development can, in many ways, hinge on improvements in this area. The role of international financial institutions to mainstream energy efficiency considerations in all major investment projects with third countries is addressed in the Green Paper.

Some of the key factors resulting in the bottlenecks with regard to ensuring energy efficiency are an absence of incentives and information and problematic financing. The Green Paper identifies options for concrete actions in respect of information and incentives. In this context, one should bear in mind the vital role of research, development and innovation in the European Union, including Ireland.

On the issue of opportunities under the seventh framework programme and the Intelligent Energy — Europe programme, we will be working very hard to ensure optimum benefits for Irish research and to ramp up very significantly Irish research and development in the energy area in the years ahead. According to the Commission, rigorous implementation of all existing measures — directives on energy performance in buildings and combined heat and power as well as the new EEES directive and further measures that will emerge in the action plan — can deliver the required savings. Slide 9 shows that the Commission refers to the case for national energy efficiency action plans and multi-annual energy efficiency plans built into the EEES directive.

The Commission discusses plans at national, regional and local level. We would add that sectoral plans should be examined. The underpinning metrics are key to all delivery of targets for energy efficiency. SEI is doing a lot of work at national level but there is an issue for the European Union in terms of measuring the base and the goals. Comparisons across member states are not always possible.

The Commission raised the question of state aids and the proportionality, justification and necessity for them. State aids in the area are subject to guidelines on state aids for environmental protection which expire at the end of 2007. A review is imminent and we support that as a key means of closely aligning state aid with efficiency gains.

Public sector procurement represents 16% of EU GDP. Actions by public authorities should be not just exemplary but concrete. They should deliver change through purchasing strategies, a crucial issue from our perspective. We would emphasise the ability of the public sector to be an exemplar in energy efficiency strategy. There is a need for synergy between the cohesion policy and the energy efficiencies the Commission outlines. That would have particular reference to the ten new member states where there is low base line.

In our own case, integration into regional development is instanced by the forthcoming national strategic reference framework on the co-funding dimension up to 2013. The Department is working with the two regional authorities to ensure energy efficiency programmes at regional and local level are built into that framework. The energy performance of buildings directive has clear potential gains if rigorously applied, according to the Commission.

The development of CARS 21 until now has seen voluntary agreement with industry but that is now under discussion. A risk we all recognise is the trend for larger vehicles, which must be addressed here and in Europe. The existing enactments have been referred to already — the energy performance building directive from 1 January 2007 and the new energy efficiency directive that must be transposed by May 2008, which seems a long way away.

The Green Paper on energy policy for Europe was presented at the March Energy Council and the Commission's own consultative process on the Green Paper on Energy Efficiency will be presented to the June Council later this week. The debate was a wide-ranging consultative process, with NGOs and a variety of groups contributing their views. The Commission will produce an impact assessment in July, an action plan on energy and efficiency later in the year and the overall package on energy, which will culminate at the spring Council 2007, will have energy efficiency as a key component.

Our current initiatives include the combined heat and power grants scheme that will be launched shortly, ongoing SEI programmes which include the large industry energy network, the recent innovation around energy agreements with industry and wide-ranging advice, technical support and grants for industry and others.

The Minister will shortly establish the new energy research council that will co-ordinate and oversee a new impetus behind energy research, development, technology and innovation, RDTI. The all-Ireland approach merits emphasis as one in which there is a series of shared objectives in energy efficiency and renewables, where we agree to work in close and increasing collaboration on energy efficiency, inter alia. A multi-annual national energy efficiency campaign will be launched in the autumn. This will be a heavyweight campaign — modelled on the race against waste campaign — that will not just be media oriented. The campaign will be linked to a communications strategy but will also provide modules that will encourage SMEs, industry, the public sector, local authorities, transport interests, etc. The Commission is also launching an energy efficiency campaign aimed at various individual consumers rather than industry.

Overall, Ireland agrees with the European Union's focus on energy efficiency and supports Commissioner Piebalgs in making energy efficiency one of his key priorities. This will deliver payback under the three pillars of energy policy and is relevant to proceeding with our RDTI agenda. The gains for the European Union will also be gains for Ireland if we can deliver a further reduction in energy demand and intensity, and demonstrate savings across the economy with social payback.

Chairman

I thank Ms White. Is she aware that our report is ready for publication on Thursday?

Ms White

Yes.

Chairman

I hope to see her or some of her officials at its launch.

Ms White

We will ensure that we are represented. We look forward to it.

Chairman

We hope the report will feed into the Department's policies and be helpful to it in developing them. Can I take it that there is joined-up thinking at European level in respect of European energy efficiencies? Does our Government have similar joined-up thinking?

Ms White

The Commission's clear intent is to deliver a cohesive joined-up approach to several key energy policies. Allowing for competence in certain member states in some areas, there is general consensus that a more cohesive approach across energy policy is not only desirable but necessary.

Member states vary in their ranking of energy efficiency. The Netherlands is a fine example of an energy efficiency strategy that works. The ambition to have more cohesive joined-up thinking across Europe is mirrored in Ireland where, given the nature of energy issues, joined-up thinking across the range of energy policies is critical. Bioenergy, for example, does not work if the key players, Departments and agencies, do not address the supply and demand sides. Other factors include, on the supply side, land use and energy crops and, on the demand side, transport. We must also ensure that we have a bioenergy strategy that will deliver across the board. All the various groups must sing from the same hymn sheet. We are working closely with the Departments of the Environment, Heritage and Local Government and Transport to create a greater sense of collegiality around these issues.

Chairman

The Minister informed me last week that he is meeting his EU counterparts at this stage. Ms White stated that the EU will begin a regulatory impact analysis by July. Will Ireland also carry out a regulatory impact analysis?

Ms White

We do not have one planned because the Green Paper is a discussion document. I am not sure what the Commission has in mind with its impact assessment. It would be more a case of when the actual energy efficiency action plan comes through from the Commission. Then the concrete proposals will have to be measured for impact.

Chairman

I ask Senator Kenneally to take the Chair for a short period.

Deputy Eamon Ryan

I welcome Ms White on her first attendance at the committee. I wish her the best of luck in her new appointment.

It was Deputy Fiona O'Malley — I supported her proposal — who asked that the committee discuss these EU proposals. The Sub-Committee on EU Scrutiny recommended that these documents only be noted. The committee, however, felt it was important to obtain more detail on the proposals.

Ms White claims that the real devil will be in the details of the action plan, which will come before the Council in September. Were most of the details already decided at the June Council meeting? I was unhappy because the Irish position on this directive was that it should not be mandatory in its aspirations. It means that the 20% increase in energy efficiency would be an advisory rather than a mandatory clause. Advisory directives in this area, such as that which relates to biofuels, do not provide any impetus for action. Where there are mandatory clauses, such as in the renewable energies area, real targets are set that must be achieved. Denmark, Slovenia and Cyprus, among others, called for the directive to be mandatory. The European Parliament was unanimous that this should be the case. It was at the Council of Ministers, however, that such a move was blocked. Why did Ireland not add its voice to those member states arguing that energy efficiency is of such importance that it merits a mandatory target?

By improving energy efficiency, how can we ensure that we are not increasing the demand for energy use at the same time? A question now being posed by academics is whether the promotion of energy efficiency leads not to a reduction but rather to an increase in energy use, thus making it more inefficient. How do we arrive at a position where we are reducing our energy usage and what are the measures to be taken in that regard? Given its importance, would one possible measure of our use of carbon — our carbon emissions as an indication of energy use — not perhaps be from some of our renewable resources but rather from the main fossil fuels? Does that provide a useful baseline in that we have the 1990 levels and that a great deal of detailed analysis has been carried out in respect of trying to confirm what exactly is our baseline? Do we plan real reductions in carbon emissions and, if so, how do we measure them?

Ms White

As I understand it, the Deputy's first question relates to the energy end-use efficiency directive, which was negotiated last year and which was signed off in March this year. There is much debate, not just on the energy efficiency area but also in respect of renewables, as to the merit of mandatory targets. Taking a philosophical position on whether they should be mandatory does not necessarily mean that one does not agree with the end objective. The Netherlands, for example, has questioned the imposition of mandatory targets but does many other things to achieve results. The point as regards this process is the result achieved and the mechanism for the achievement thereof can be debated. There is a school of thought which says that if it is not mandatory, it will not happen. Others believe, however, that there are ways to incentivise in the widest sense changes in behaviour. For example, as we do with the energy agreements, we can bring industry along to deliver the results. The result is important but the method for achieving it is always open to debate.

That is my understanding of the rationale. It is not blanket opposition to setting of mandatory targets. Indeed, the debate culminated in the directive setting indicative targets, a cumulative 1% per annum, which totals some 9% at the end of the period. In the context of the energy efficiency action plan — the Green Paper — the Commission posits a 20% reduction, the key debate in that regard will be on the optimum way of getting there. Whether it be in respect of mandatory targets or a host of other measures, that debate would be worth engaging in. There are somewhat philosophical views on that around Europe but it is not simply a matter that we basically fell at the fence. It is more a question of determining the right way of getting there.

There are a number of conundrums involved, one being that the risk of greater use of services could mean that more energy ends up being used. It is a complex area, as the committee and I have been discovering.

I return to the generation issue and the degree of wasted energy to which generation systems give rise and which is quite startling. That is a major issue. There are issues in respect of changing the behaviour of individual energy consumers, and, in some cases, transforming industry and public sector attitudes to energy use. Major issues also arise in the context of the transport sector. However, there are difficult and specific issues with which we must engage in a planned manner. One of the latter relates to the level of waste right across Europe. The Commission correctly makes a major point that the waste and inefficiency relating to energy generating capacity is a major issue in the context of security of supply and from an environmental perspective. That matter requires specific attention.

Deputy Eamon Ryan

Ms White's point in respect of big decisions and power generation is interesting. She suggested that there is a strong push within this for CCGT generation. At 50%, although I was not aware it was performing that strongly in efficiency terms, we are still throwing half the energy used up a chimney. To an extent, as Ms White states, the alternative is a more distributed grid system developing renewables. However, it is difficult to do both.

We face an energy shortfall. The ESB grid adequacy document suggests that the situation will be tight by 2009. We must do something. We constantly turn to CCGT as a solution to our problems. The document suggests that CCGT is energy efficient. From my perspective, however, the ability to choose CCGT lessens the pressure to choose the alternatives, which would be stronger CHP development, micro-generation, distributed biomass generation or some other generation system. We can claim that we will choose both but the reality is that always choosing CCGT has stymied our development of technologies that, while perhaps not economically sound at present, would be more efficient.

Ms White

I agree with the Deputy that CCGT was being discussed in that context by the Commission as a solution. It is not a panacea for all the issues. One of the major issues we face, for which we must strategically prepare, is increased flexibility in terms of plant, which is key to managing and ensuring that we achieve ambitious targets in respect of renewable energy connection. I fully accept the point. Nevertheless, in a reference scenario, if I can call it that, where gas is currently the significant fuel for generation, we need to reduce that dependence and the renewable energy strategy is obviously a key part of that. However, it is worth noting that CCGT has contributed to a more efficient, less polluting form of generation. This does not mean we stop there but it has been part of the solution.

In a European context, considering the extraordinary gigawattage capacity that must be built across Europe in the next decade or so, the reality is that gas will feature in some way. In the context of this debate on efficiency, I emphasise that we need to focus on energy efficiency as it applies to generation.

Deputy Eamon Ryan

Is carbon used as a measure? Should we choose reductions? With regard to setting annual programmes, Denmark has agreed real reductions in national energy use per annum. If these reductions are not achieved, the budget is changed the following year. Is that the way we should proceed? If so, how would the process be measured? Perhaps it could be measured in millions of tonnes of oil equivalent or, alternatively, carbon could be used as a base. Do we have an idea as to that reduction in energy use? What would we use as a base?

Ms White

Deputy Eamon Ryan may accuse me of kicking to touch but the metrics issue in this regard has not yet necessarily been solved. Much good work is being done at national level by SEI but in terms of developing energy efficiency strategies, we need to have more thorough debate and analysis on the metrics. Carbon is obviously one of the measures. Some aspects of measuring energy intensity reductions and energy demand reductions are highly problematic. Much excellent work is being done in the United States. The IEA needs to tap into that. For example, one issue that must be examined under this new impetus in respect of research, technology development and innovation is our ability to perform forecasting modelling and planning analysis in a cohesive and long-term manner. Hence, while I do not have an answer for the Deputy, the Department is aware of this issue. Although Sustainable Energy Ireland has done a fair amount of work in this respect, there is more to be done.

Deputy F. O’Malley

I welcome Ms White and thank her for attending. I wish to return to her earlier comments regarding joined-up thinking because while policy documents are well and good, what is important is how they will function. I have learned from those who try to operate and deliver services in energy efficiency, new renewable energies, bioenergy or whatever about the difficulties they face regarding the Government's joined-up approach. Frequently, such people reach agreement with, for example, the Departments of Agriculture and Food, Communications, Marine and Natural Resources or Finance, only to discover that other Departments do not know anything about it. They garner a folio full of letters to the effect that they have permission to do some things but not others and that they are not believed. This is a real problem for the roll-out of services which, as Ms White noted, is of ultimate importance.

The manner in which objectives are set and the question as to whether they are mandatory is one matter. Once a policy has been defined, however, the producer must be helped to deliver it and the difficulties encountered have been woeful. I am certain that Ms White is also familiar with this issue and that people continually contact her Department regarding the difficulties they face in operating its various schemes. Such difficulties arise because other Departments — such as the Departments of Agriculture and Food and Finance — the Revenue Commissioners or whoever give the producers grief because the former have insufficient knowledge of the scheme. I have highlighted this point because Ms White's first slide made reference to information and education. Often, the task is to inform and educate another Department. Much goodwill and energy is wasted in trying to deliver services because of this lack of joined-up government. While this is not necessarily the fault of either Ms White or her Department, it must be considered in respect of the roll out. I have taken the opportunity to make this point now because I may not have such an opportunity again.

When will the energy research council mentioned by Ms White come into operation? As time passes, the need for an august body that would be free to make deliberations or reflect on the country's needs over a longer timescale than that to which members might be accustomed becomes more critical. I stress that this is needed sooner rather than later.

I have another question regarding the state aids to which Ms White referred. She mentioned that they are due for review at the end of this month. My understanding is that such measures were announced in the Finance Act 2004 and again in the Finance Act 2005. Is 2004 the correct year or was it earlier? I refer to measures regarding bioenergy and biodiesel.

Ms White

The pilot scheme was announced in 2004. The full scheme was announced this year.

Deputy F. O’Malley

The fact that it was necessary to gain permission for further state aids surprised me and others. As it is widely available in other European countries, the fact has been established that such aid is permitted. Hence, I was surprised that we felt obliged to delay people who were ready to produce by seeking and receiving such permission, although it was known that such permission would probably be forthcoming. I was most surprised to discover that such permission was granted quite recently, particularly because I thought that people were about to produce such services.

Following further research into this, I realised it is a very limited tool for promoting energy efficiency. Perhaps I should discuss the matter with the Department of Finance rather than the Department of Communications, Marine and Natural Resources. The Department of Communications, Marine and Natural Resources is unable to put a producer of non-green energy, such as petrol or diesel, at a competitive disadvantage, compared to a producer of biofuel. This was essentially what we were trying to do because we were trying to change people's choices when they purchase fuel and to encourage them to purchase biofuel over diesel.

A fundamental review of state aids in this area is needed. The question of how we change people's choices does not simply relate to directives but also to fiscal incentives. It would be better if we were clear and efficient in how we could achieve this from European level down to the level of member states in order that a degree of flexibility within different countries' tax regimes can be achieved.

The carbon trading market, which was mentioned by Deputy Eamon Ryan, was regarded as the stick in a carrot-and-stick approach. I understand that the carbon market has apparently collapsed, although I have not examined it for two or three weeks, and is still very low. What is Ms White's opinion on this issue, which is a major problem? The price of carbon did not come down because people became more efficient. Rather, they overestimated what they needed. How does Ms White see this operating in a European context?

Ms White

I will address several of the points raised by the Deputy. In respect of issues in energy policy, such as bioenergy or energy efficiency, it is imperative the Departments concerned work very closely together in a cohesive and planned manner. It is not simply a question of people contacting each other by phone but of having structures in place. A number of the reports were completed by the bioenergy strategy group, which involved people from various Departments, including, for the first time, the Department of Finance. There have been instances, such as biofuel, which involve issues of supply and demand. This dovetails with the point the Deputy made about whether excise relief is the optimum way of delivering change. Such an approach represents a good start and has been recognised in Europe as a way of kickstarting the transition.

One could take the route of mandatory obligation or quota but one would need to balance the supply and demand sides and get all the issues right. It is not possible to do this if people are simply operating in isolation. Joined-up thinking is needed. Bioenergy is another area which involves the Department of Agriculture and Food, which attends to processors, and the Department of Enterprise, Trade and Employment. There are very few Departments which are not in the loop if one looks at the issue in terms of a considerable number of energy issues. I endorse the Deputy's comments in respect of this. The Minister has made it very clear, and both he and his Department strongly believe, many of these issues can only be progressed in a strategic way in the interests of consumers, service providers and businesspeople who are currently examining the kaleidoscope around who is doing what. These issues must be addressed in a cohesive way in the interests of customers in the broadest sense.

The Energy Research Council, which has its own paradigms around some of the other research councils operating in the wider research and development area, will be formally launched in the next few weeks. We hope it hits the ground running in terms of taking on what is an ambitious long-term agenda in terms of advising and examining research priorities for energy, taking a long-term view and optimising opportunities under the seventh framework programme, linkages with Science Foundation Ireland and capacity building, which is a significant issue for the energy community. It has a wealth of issues to address and it will deliver as planned.

I agree with the point made in respect of the state aid issue. At the March Council, Slovakia and Luxembourg complained to the competition directorate about how their biofuel excise schemes were being delayed. They asked whether we were in favour of these projects and what was happening. The directorate has acknowledged that there is a hoop to get through and we all have views on the reasons to do so. The reality is that state interventions require scrutiny, which is fairly light in this instance. It does not question the fundamentals of the schemes in operation around Europe. We have been working to minimise the work involved by ensuring action is being taken in parallel.

The merits or otherwise of excise relief as a means of delivering the required result is the first general step on biofuel strategies. During the next 12 months to two years, developments at European level will inform our consideration and obligation in this respect. Prices collapsed in the carbon trading market, the underlying reasons for which have been debated, and have not hardened in recent weeks. There is a risk of price fluctuations when one creates a traded commodity and I am unsure of how to mitigate it. We are at a moment of uncertainty in terms of the next round of national allocations and the plans that must be negotiated with the Commission. The price raises a number of issues that we could return to.

Deputy Durkan

I apologise for being late. I got stuck in one of those famous traffic jams. It was delightful.

Chairman

The Deputy does not need to say any more. I got stuck in one for an hour. I do not know why people do not want to move out of Dublin. I certainly do not want to be travelling into traffic.

Deputy Durkan

Getting out is fine, but getting in is difficult.

On co-ordinated thinking in Europe, not enough effort is being made despite the production of a Green Paper on energy and so forth. In the time since the paper was produced, including the previous year, a special effort could have been made to encourage people in, for example, the sugar industry. Incentives could have been provided to move the industry towards the production of ethanol without creating problems. The producers must be compensated, but this can only happen if producers cease all production, including the preliminary stages. An opportunity was lost. If this route had been taken, the European Commission could have appeased the farming community on the one hand and met the green energy policy targets on the other.

On the optimum mix, there has been much talk about how some of our European colleagues have done well in their moves away from fossil fuels towards renewables. Others are dependent on nuclear energy. As such, the mix will be important. To what extent can we encourage the Commission to offer more incentives to those countries that will forge ahead with renewable projects than to those countries that will not? The former category includes those who will not rely on nuclear energy.

Ms White

I am not in a position to comment on facets of agricultural policy, wherein lies the sugar beet debate. There are opportunities now and we are having discussions with the Department of Agriculture and Food and Teagasc on the degree of analysis and support being contemplated by the Department. It highlights the importance of us working with the supply side in agriculture to ensure that opportunities arising from EU or national policy decisions on energy crops are on the agenda.

Concerning the optimum mix, it is the prerogative of individual member states to decide on an energy mix. Every member of this committee would endorse this as a key prerogative for reasons that may be adduced. The Commission would not penalise or incentivise a particular energy mix.

I stress the importance of interconnection with regard to renewables. Interconnection is a key element of the ability of Denmark to deliver the degree of renewable energy and intermittent, namely wind, energy. It is also a key component for Ireland's strategy to deliver increased renewable energy sources for electricity generation. A number of factors must be in place before we can achieve our ambitious targets for renewable energy.

Deputy Durkan

Interconnection is simpler on the mainland of Europe than on an island.

Ms White

It is arguably simpler but can sometimes be quite complex. An interconnector across the Baltic Sea would be difficult. The engineering is not an insuperable challenge. It is worth examining the experience of Australia where interconnectors link Tasmania, a long distance away. I do not underestimate the challenge or the time required but it is not the most challenging matter of engineering. The major issues concern reinforcement of both sides and connection to a grid. As is the case with other energy islands such as the Baltic states, interconnection is a very important element of an energy mix with greater diversity.

Deputy Eamon Ryan

Ms White stated that it is possible under this directive for states to apply appropriate incentives for energy efficiency. Can she provide examples of new thinking with regard to this? Many gains in heating and power supply could be achieved through building regulations. What consultation takes place between the Departments of Communications, Marine and Natural Resources and the Environment, Heritage and Local Government concerning higher building regulations beyond those proposed by the EU buildings directive? Does the Department have a view on the initiatives taken by local authorities of setting more stringent building regulations? Is that a positive way of achieving efficiency gains? Is there any problem with local authorities setting higher standards than the national building regulations or setting requirements for a certain percentage of renewable heating or power generation supply in local area plans or development plans? Would this be included in the incentives mentioned in the directive?

Ms White

I will ask Mr. Raphael Kelly to speak on the second point concerning the interaction with the Department of the Environment, Heritage and Local Government. Concerning incentives, the Department will be allowed to provide grant aid such as that provided for combined heat and power, CHP, projects, in an enhanced version of the current scheme. I certainly have no difficulty with local authorities taking initiatives and a number of local authorities, including in Cork, have shown considerable get up and go regarding the use of biofuels in vehicles. I am not sure whether they are subject to constraints in operating different standards or building specifications. We could confirm that with the Department of the Environment, Heritage and Local Government.

Local authorities have a pivotal role to play in buildings and transport. They are critical to driving the alternative fuels agenda and energy efficiency. Any local authorities which show initiative are to be commended. We need leadership by example and exemplars. Mr. Raphael Kelly will speak briefly on the point regarding the environment and the buildings directive.

Mr. Raphael Kelly

To reinforce the point on higher standards, the house of tomorrow programme run by the FCI seeks 40% greater energy efficiency in the fabric of a building and how it is run than is required by building regulations. Builders fall over themselves to engage with the programme, which has resulted in a voluntary acceptance of standards much higher than mandatory within the building industry and that is spreading. At present, quite a small percentage of the building stock is formally involved in the house of tomorrow programme. However, other builders do it themselves, taking technical advice from the FCI.

A question was asked regarding co-operation between the Departments of Communication, Marine and Natural Resources and the Environment, Heritage and Local Government. A joint working group examined the implementation of the energy performance of buildings directives and produced a draft action plan, which will be launched by the Minister for the Environment, Heritage and Local Government shortly. The draft was provided for the Commission and resulted in Ireland receiving only one of three clean bills of health on the implementation of that directive. We laid out all of the legislative and advisory steps we will take, including establishing the advisory system and training and establishing the inspectorate required to run the system.

Deputy F. O’Malley

When was Ireland awarded that?

Mr. Kelly

In January.

Deputy Eamon Ryan

I am sure the house of tomorrow programme has played a useful role. However, events are now moving beyond it and people refer to it as the house of yesterday. Fingal County Council has cross-party agreement on local area plans having standards twice those of building regulations, with a 30% renewable contribution. They are achievable. We must push beyond that and councils are doing so. The house of tomorrow programme is increasingly becoming a low bar.

Recently, the Danish Government established an interesting initiative within the public sector, whereby investment in energy efficiency, including heat and electricity use, must be made in any local authority or Government building where it can be shown that investment has a pay back period of less than five years. Will we examine that type of initiative here?

Ms White

I was not aware of that initiative. We will certainly follow it up with interest. It underlines the importance of striking the balance between mandatory and incentive.

Chairman

Is it agreed that the clerk will prepare a report supporting COM (2005) 265? Agreed.

I thank Mr. Kelly for coming before the committee. I ask Mr. Peter O'Neill and his officials to come before the committee to discuss COM (2005) 646. As we have another proposal to consider, COM (2005) 472, I ask members to be brief. We will now consider COM (2005) 646, a proposal for a directive of the European Parliament amending Council Directive 89/552/EEC on the co-ordination of certain provisions laid down by law, regulation or administrative action in member states concerning the pursuit of television broadcasting activities.

I welcome Mr. Peter O'Neill, assistant secretary, Mr. Ciarán Ó hÓbáin and Mr. Paul Mulqueen. We will listen to a short presentation followed by a question and answer session. I draw attention to the fact that while members of the committee have absolute privilege, this privilege does not apply to witnesses appearing before the committee which cannot guarantee any level of privilege to witnesses appearing before it. Under the salient rulings of the Chair, members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

Mr. Peter O’Neill

The primary purpose of the television without frontiers directive is to ensure the effective operation of the internal market for television broadcasting services, by ensuring the free movement of broadcasting services throughout the EU. It achieves this by setting down a minimum set of rules that will apply to all television channels licensed in the EU and by then providing that, once a channel has been licensed in one member state, it may be broadcast in any other member state without being subject to any additional regulation.

The provisions of the existing directive cover various areas, such as jurisdiction and quotas for European works. For example, 50% of the output on each channel must be made up of recent European works, though news and sport are excluded from this calculation. They also cover quotas for independent production, where broadcasters must spend a minimum of 10% of their budget on independent productions, and rules on advertising, sponsorship and teleshopping. These are rules on when advertising may be inserted and the amount, together with rules controlling the nature of advertising, including a ban on tobacco advertising and controls on alcohol advertising. The provisions also relate to the designation of certain events as events of major importance to society that should be available on free to air television, to the protection of minors, protection against incitement of hatred and to the right of reply.

I will go through some of the reasons for the amendments to the directive. The principal reason for the Commission's proposal to amend the directive is to address the fact that advances in technology, and the manner in which the audio-visual sector has developed, have resulted in a regulatory environment where similar audio-visual services are not subject to similar regulation. Certain services that are the same in nature as traditional television services are available on non-traditional broadcasting networks and are not subject to broadcasting regulation. The audio-visual industry is undergoing significant change, driven by a number of issues, including the convergence of technologies and services such as traditional television, Internet TV, linear Internet TV and television on mobile phones and other mobile devices. It is also driven by the expansion of fixed broadband digital TV and 3G networks, by an increase in pay-per-view, by innovations in non-linear service deliveries such as video on demand, by peer to peer exchanges of audio-visual content, by interwoven linear and non-linear services and by changing viewer habits — more and more people nowadays want the audio-visual content to follow their time schedule, not the other way around. It is also driven by new advertising methods such as search-related advertisements on the Internet or SMS advertisements on mobile phones. The general thrust of the Commission's proposal is to put in place a new regulatory framework which takes account of these advances in technology and market developments.

I will now give a brief description of each of the key provisions, starting with the scope. The Commission has proposed two new definitions to describe the services which would be covered by the revised directive. The logic is the same regulation should apply to the same type of services, regardless of the type of technology used to deliver the service. The first of these relates to linear services, which would include those services which have the same characteristics as television broadcasting services and are available to all viewers at the same time. An example would be traditional broadcasting.

The second of these relates to the proposed introduction of a new definition for non-linear services, which are not delivered to all viewers at the same time. These include services such as video on demand. The Commission proposes that a basic tier of rules would apply in the case of non-linear services, including rules relating to the protection of minors and right of reply.

A second key provision relates to commercial communications. I will refer to advertising, and the Commission proposes that the revised directive should retain the maximum amount of advertising per hour at 12 minutes but should allow broadcasters almost complete flexibility with regard to when to insert advertising breaks. The existing directive has rules relating to the duration between advertising breaks, and where a programme is interrupted for an advertising break, there should be at least 20 minutes between each break.

The Commission proposes that with the exceptions of films, news and children's programmes, there should be no limits as to when an advertising break could be inserted in a programme. The Commission also proposes deleting the requirement that advertising can only be shown between programmes or during breaks in a programme. It proposes that split-screen advertising would be allowed. This is already permitted for sports events such as motor racing and cycling, where there is no natural break.

The present proposal and the directive deal with the issue of product placement. The Commission has been clear that product placement is currently allowed, provided that such product placement does not constitute surreptitious advertising. The Commission proposes to introduce specific regulations around product placement to safeguard viewers. For example, viewers may be alerted to where product placement is used and product placement excluded from news, current affairs and children's programmes. The Commission does not propose any new regulatory measures in the area of sponsorship.

Another key provision in the proposed directive is jurisdiction. Throughout the Commission's consultation in the past two years, Ireland and a number of other member states have consistently argued for a fundamental shift in the approach to determining which member state's national rule should apply to any given broadcasting service. We have argued that in the case of a television channel — a broadcasting service which primarily targets Ireland — Ireland's national measures should apply to that channel. The directive provides that all of the channels falling within the ownership of one company must be treated as falling within the jurisdiction of the member state in which that company is based.

The directive acknowledges that member states are free to introduce stricter measures for the broadcasters within their national jurisdiction. For all other channels, the only guaranteed regulation will be the provision of the directive. In Ireland's case, that applies to almost 50% of what Irish people watch currently.

This is a short summary of the proposals.

Chairman

I am reading between the lines. Mr. O'Neill is clearly referring to an outside broadcaster which would have a huge slice of the market in this country. We would have no control over that broadcaster.

Mr. O’Neill

Yes.

Chairman

I am not sure if we had it here, but there was a recent discussion on electronic programme guides, or EPG, which is very important, and the placement of programmes on Sky's platform. That seems to be a difficulty for some broadcasters in this country. What is the European view on the matter?

Mr. O’Neill

I would like to be clear on the question.

Chairman

Sky has an EPG where programming is listed. In the UK, the BBC might be listed first on the EPG, and here the list would run as RTE 1, RTE 2, TV3 and TG4. The next space is blank and Sky channels follow. Some other broadcasters in this country may be well down the list. One would not find them on the electronic programme guide, EPG. Has the Department a viewpoint on this issue? Will the Commission have control over broadcasters that send signals into other countries while at the same time carrying only programme content that they wish to?

Mr. O’Neill

The EPG counts as a channel, effectively, and is regulated, in the case of Sky, a British broadcaster, by Ofcom. If an Irish broadcaster has a problem with where they are placed on the EPG it is up to them to take the issue up with Ofcom. The Irish position is that programmes broadcast here, EPG or otherwise, should be subject to regulation by the Irish regulator and that the Irish regulator should be decisive in programme content.

Chairman

It is interesting that Mr. O'Neill should mention Ofcom because I recently met that organisation on behalf of this committee and it has no control whatsoever over the EPG platform for Ireland. In the UK it has directed that Sky should put the national and public service broadcasters, such as BBC 1 which is number 101, on its EPG. It has a different EPG for Ireland and I understood it had no control over what Sky does in another member country.

Mr. Ciaran O’hObain

The EPG is a service provided by a broadcaster and is, as such, subject to the regulations of the appropriate regulator. Ofcom has, I understand, the same jurisdiction over what is effectively the Irish EPG as it does over the UK EPG. If Ireland, and the other member states that are arguing for a change in the position and jurisdiction, were successful, the result of that change would be that an EPG, or broadcasting service only available in Ireland would be subject to Irish rules. That is the position that we seek to achieve. I question how Ofcom can claim to regulate one of two EPGs provided by a broadcaster falling under its jurisdiction, but not the other.

Chairman

Is Ireland arguing the case that you have just made?

Mr. O’hObain

The issue of the EPG follows from the argument that is being made regarding television channels.

Deputy Eamon Ryan

This is a subject of great interest and was raised in questions to the Minister last week. Our inability to regulate half of our broadcasting is remarkable. The Minister suggested that the Council of Ministers is split, roughly 50-50. Around 13 member states support the Commissioner's position which is to leave the market deregulated in international broadcasting. Ireland was one of 12 countries that saw a need for regulation of satellite broadcasting.

Is there a fall back position for Ireland, in this regard, in at least seeking regulation on the advertising inserted by satellite broadcasters transmitting into the State? It is clear why we want control over programming, the EPG is essentially a programme server. If we cannot get agreement in the Council on the control of programming, should we not at least seek the power of regulation over advertising that is specifically inserted for and is only broadcast to the Irish market? This would at least give us some broad regulatory control over the advertising content. Is it possible to adopt such a fall-back position?

I assume the 13 member states that support the Commissioner's position are motivated by the profitable interests of the broadcasters in question. I understand, for example, why the British Government under Prime Minister Tony Blair might be interested in looking after Mr. Rupert Murdoch; it has a long history of doing so. Is it the case that all 13 countries are arguing for the status quo based on this type of self-interest? Do they have any other arguments for an unregulated position which allows transnational broadcasters such freedom? What points are being presented to counter the arguments we are making? It seems unquestionably reasonable that member states should seek to regulate programming specifically directed at their own country. I find it difficult to understand the motives of those countries supporting the Commissioner other than as a means of supporting local broadcasters.

Chairman

Before Mr. O'hObain answers, I wish to clarify for Mr. O'Neill that Ofcom made clear at its meeting with the committee on 19 May that it has no responsibility for the Irish EPG. The Irish regulator, ComReg, shares members' concerns on this issue. The company I spoke about is Channel 6, the new broadcaster, which I understand is included in the adult content section on the Sky platform and, therefore, has little hope of being accessed. That is why I expressed concern as to whether the Department is proactive in considering the issue of the EPG.

Mr. O’Neill

We will look into this issue further and attempt to get to the bottom of it.

I will ask Mr. O'hObain to answer some of Deputy Ryan's questions because he has been leading the negotiations at the EU working group. I will clarify a minor point by bringing to members' attention that Ireland is in a group of 13 rather than 12. Mr. O'hObain will deal with Deputy Ryan's questions regarding a fall-back position on satellite advertising and the arguments put forward by those member states that oppose any regulation.

Mr. O’hObain

In terms of a fall-back position in regard to advertising, it is certainly a valid position to conclude that we may not be able to achieve the overall ambition, which is regulation of the entire service. Of the programming watched by Irish audiences, the 50% that is not regulable here is programming that is watched by larger audiences in other countries and that would not be subject to Irish law in any event. With digital television, however, it is likely that what we see happening with, for example, Sky News, where there is break-out in both programming and advertising, will increase.

It is to be anticipated that in the future we will have many more Irish or part-Irish services. It is worth arguing, therefore, for regulation of the entire service. The advertising component is also likely to increase with any channel that captures a market here. Control over satellite advertising is a potential fall-back position but it may be difficult to find common cause among all 13 member states because we all have different positions on this issue. It is logical for Ireland to go after both programming and the advertising that pays for it.

In regard to motivation, it is fair to say that any analysis will show that the 13 member states are those most affected by targeted services. The other 12 do not fall into one category. For a small number of member states, there are advantages in having broadcasters based in their jurisdiction. It is interesting that many of the larger member states are supportive of the Commission's current position. Given that 90% of what viewers in these states watch is indigenous broadcasting it is understandable they would take that position. In the case of several of the 12 member states who support the current position, their stance simply reflects that they have other priorities in regard to the revision of the directive and that the status quo does not affect them negatively.

Deputy Broughan

Does the directive encompass the debate on linear and non-linear services? What position did Ireland take on this? Are we in favour of controls only in regard to linear delivery or do we also have a view on non-linear delivery? Many people may be watching television on their mobile phones in the next several years. The technology is already available but there is not a reasonable service. Has Ireland taken a strong view on this?

Mr. O’Neill

The directive deals with both linear and non-linear services. The Commission proposes a two-tier approach with new definitions of linear and non-linear delivery. We are at an early stage in the deliberations on this directive — it has only had one short outing at Council — and the debate will continue for some time. Ireland broadly supports the two-tier approach but we believe there is a need for greater clarification of the nature of the new services covered by the directive. We will seek a far greater level of clarification from the Commission on the issue of linear and non-linear delivery.

Deputy Broughan

Will the directive ensure that non-linear services remain effectively unregulated in terms of content? There are, few, if any, controls in regard to web-based advertising but recent research indicates it is beginning to overtake daily newspaper advertising and is becoming extremely significant. As we move on to 3G+ platforms and other new technologies are developed, will the spirit of the directive persist?

Mr. O’Neill

Our position is that we accept there will be a lower level of regulation of non-linear services. Our main concern in regard to the latter relates to the protection of minors.

Deputy Durkan

How does Mr. O'Neill predict the proposed regime will affect advertising standards in Ireland? He mentioned a proposal to limit advertising of certain products such as tobacco and alcohol. I have observed recently that several programmes on independent television stations, particularly broadcasts from the United Kingdom, carry sponsorship. This sponsorship probably goes a good way towards funding these broadcasters' programmes. Does Mr. O'Neill see sponsorship taking a new role under the proposed regime? To what extent does he see it affecting the quality or type of programme? Mr. Rupert Murdoch was mentioned; I am sure he has some degree of influence on the content of programmes that are sponsored.

What is proposed in regard to the protection of minors? Several years ago everybody depended on television to view films. Now, however, very few people throughout the EU watch films on free-to-air television as videos and DVDs have taken over. This is likely to be replaced in the future by the downloading of films and material from the Internet to play back later, and the question is how we propose to control it.

I have put down numerous questions to the Minister on this subject but these have been passed to the Department of Justice, Equality and Law Reform. However, in Europe this is not regarded as a justice issue. The Commission believes it to be more an issue that technology can regulate at the outset. In respect of the broadcasting sector, whether in the form of transmission via the Internet or otherwise, the degree to which control can take place needs to be examined if we are serious about doing that. There is not much sense in deciding to inform the police. That will not achieve anything if something has already happened. There is big money in pornography. There must be as otherwise there would not be so many investing in it, and there are quite enough seedy investors willing to do that.

Mr. O’Neill

The Commission is not proposing any change in the area of sponsorship. Sponsorship is not allowed to influence the content of a programme and no change is envisaged in the proposed new directive.

In the context of regulating what is known as "video on demand", which is a non-linear programme, our bottom line is the protection of minors and we will be seeking very strong protection. I understand the point regarding the Department of Justice, Equality and Law Reform, but much of what goes on is criminal activity and that is a matter for that Department. There is a technology element, in that technology is used to transmit this material, on which we work with the Department of Justice, Equality and Law Reform. That Department and the Garda Síochána are very much up to speed on the latest technological developments.

Deputy Durkan

Has the Commission not taken the line that there is a technical area that needs to be dealt with, separate from the home affairs or justice areas? I read last week that the Commission issued a statement to the effect that it proposed to put particular emphasis on how the technology is used and accessed and how broadcasting by one means or another is allowed. Once material is on the Internet it can be downloaded. Something has been happening in the European Commission in the past couple of weeks.

Mr. O’Neill

I am not aware of anything in the context of this directive.

Deputy Durkan

No. It is separate from the directive. However, the fact that the Commission has issued a statement indicates it is conscious of a void that needs to be dealt with.

Deputy Broughan

Are there any figures in Europe as to the number of people watching television through the web? Has there been any research on non-linear programmes looking forward to a world where there is infinite choice of stations because of that?

Mr. O’hObain

I am unaware of any research. Our understanding is that IPTV has low penetration at present but we are conscious that regulation must address it on the basis that it will increase quickly.

Chairman

Is it agreed that the draft report on COM (2005) 646 be brought forward by the clerk, that the joint committee has concerns regarding the EPG and that this should be addressed in the directive? Agreed. I thank Mr. O'Neill and his officials for attending. We will now deal with COM (2005) 472 re establishing measures for the recovery of the stock of European eel. I welcome Mr. Martin Brennan, assistant secretary. Mr. Brennan is accompanied by Ms Rebecca Minch from the Seafood Policy and Development Division and Dr. Terry McMahon from the Marine Institute.

Dr. Cecil Beamish

: There is a subsequent proposal on alien species in aquaculture systems with which the committee is dealing. Ms Minch and Dr. McMahon will deal with that issue.

Deputy Eamon Ryan

Are we taking the regulation relating to community producer prices for certain fishery products such as eels, haddock and oysters?

Chairman

We will deal with that later. I will call Mr. Brennan first. Before I do, I advise everyone that we have received a very short presentation to be followed by a question and answer session. I draw attention to the fact that while members of the committee have absolute privilege, this privilege does not apply to witnesses appearing before the committee which cannot guarantee privilege to witnesses. Further, under the salient rulings of the Chair, members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

Mr. Martin Brennan

I will start with the reason for this regulation. The entire European stock of eel is seriously depleted, so much so that the Commission is proposing to introduce a regulation designed to assist in stock recovery. This will essentially require the preparation of management plans to be adopted in each member state in accordance with the river basin directive. The proposal includes emergency measures to be applied as soon as it is adopted, which currently include at least a 50% reduction in exploitation. The original proposal was to shorten fishing to 15 days per month. That is changing in negotiation to a two month season rather than a four-month season.

The scientific advice indicates that the eel stock is highly depleted, not only in Ireland but worldwide. The fishery in Ireland is quite small with reported catch of approximately 120 tonnes per annum. To put this in context, the wild salmon fishery is approximately 400 tonnes per annum. The quality and timeliness of information is still relatively poor, but the Irish catch is estimated at between 1% and 1.5% of the European total. The life cycle of the eel is interesting in the sense that all the eels spawn in the Saragossa Sea and migrate to many places. They are not genetically programmed to go back to their own river as salmon are. The ones destined for Ireland arrive in the period from November to March. They arrive off the coast as a glass eel and many subsequently migrate into fresh water between May and September as elver or slightly older bootlace eel.

Fishing for glass eel and elver is carried out only under special authorisation. The catch is used largely for stocking open waters and in the past has been used also as seed for aquaculture. Brown eel are caught mainly in lakes either by fyke net or by long-line with additional fisheries in rivers and tidal waters. Silver eel capture takes place during the downstream migration in autumn and winter at fixed stations or weirs. The life cycle of the eel is such that stock recovery will take several years.

The objective of the regulation is to achieve the recovery of the stock to former high levels. Due to a variety of habitats and fisheries affecting the eel populations in different river basins, eels cannot be managed using a one-size-fits-all approach. The proposal aims to take diversity into account by providing for each member state to adopt a national plan suited to local conditions. The EU regulation will require the preparation of management plans for the recovery in river-basin districts as defined under the framework water directive. This implies the agreed management of the fishery in two trans-boundary river-basin districts.

It is interesting to note that the most significant eel fishery on the island is in Lough Neagh. It will require very close co-ordination in the management of our plans in the Republic if the Northern Ireland authorities are to convince the Commission that the Lough Neagh fishery can continue on a sustainable basis. Close co-operation between North and South will be required generally because we have two common catchments with Northern Ireland.

The key objective of each national plan is to allow a minimum of 40% escapement of adult eel from rivers to the sea to allow for spawning. The plan will set out the mechanisms by which this objective will be achieved and the methods to be employed to monitor their implementation. The Commission has proposed that plans should be submitted by the end of 2006 and operational, subject to approval in the scientific, technical and economic committee for fisheries, in July 2007. It is now clear that there will be some slippage in this timetable and that it may even be considerable. I am told that while the EU Parliament opinion is in place, the earliest the regulation will be adopted will be towards the end of year. Adoption could easily be delayed until next year, which means the deadlines may have to be revisited. Additionally, the Commission proposes a prohibition on fishing for eel to reduce exploitation by 50%. This will be achieved by reducing the length of the season. The methods of application and extent of the prohibition continue to be the subject of debate among member states. Once national plans are established, approved and implemented, it will be possible to lift or vary the prohibition subject to the conditions set out in the approval.

The significant obligations which will apply to the operators of hydro-electric schemes will have associated cost implications which will be of concern not just to the ESB but to all hydro-electric power generators in Europe. According to the current proposals, member states' eel management plans will include immediate measures to reduce eel mortality from fixed installations in rivers and estuaries, with specific reference to hydro-electric turbines and pumps. It is also proposed that member states reduce as a priority turbine mortality in the lower reaches of river systems. Each plan is to include further measures to reduce this mortality by 50% compared with 2006 as soon as possible.

Approximately 150 to 200 part-time licensed fishermen are involved in the eel trade and the value of the reported catch in 2002, the latest year for which figures are available, was approximately €500,000. The figures were outlined in a 2003 task force report. That new figures are unavailable underlines the fact that the species is not one on which there is a great deal of information. There are always allegations of illegal fishing over and above reported catches. The nature of this kind of fishing makes it difficult to police but the market is served by a limited number of licensed dealers who transport the eel live by tanker truck, largely for export. Some element of policing is possible by watching these movements.

A working group is being established in the Department which will include management, scientists and other stakeholders to develop the national eel management plan. Membership of the group will extend to some of the regional fisheries board managers who will function as the line of communication to the industry. There has been an expectation among fishermen that serious measures will be taken. The matter has been on the agenda for a number of years and they are aware that a debate is taking place at European level. There have been suggestions that the fact that the gate is closing has led to increased fishing efforts by licensed fishermen in the past year or two, a common phenomenon in such circumstances. The working group will work closely with the relevant Northern Ireland authorities to prepare management plans for the trans-boundary river basin districts. The North Western Fisheries Board and Neagh-Bann scientists and managers have a very close working relationship.

The regulation will include eel in the Common Fisheries Policy for the first time. The data collection regulation will impact on traditional eel fisheries and pose challenges for fisheries management, scientific structures and other users of water resources, especially hydro-electric power generators. The options for implementation of the regulation continue to be the subject of consideration. Given the reduced scale of fishing which can be allowed, complete closure will be among the options to be considered.

Deputy Broughan

Which countries will be most affected?

Chairman

Please allow Mr. Brennan to finish. He has almost concluded his presentation.

Mr. Brennan

There are eels to be found in any country which has rivers. The figures are available in the Department and can be supplied to the Deputy. The capture and release of young eels will continue for management purposes. In discussions on measures necessary to conserve European stocks there have been references to compensation payable to affected commercial fishermen. The European Fisheries Fund would accommodate schemes aimed at retraining and conversion to other activities, if relevant, given the scale of operations here. Funding should be provided on the basis that the eel species requires conservation rather than on the premise that commercial fisheries can be developed further. The programme is a long term one.

Senator Kenneally

I welcome the officials. I was concerned about a point made towards the end of Mr. Brennan's presentation that complete closure would be among the options considered. It appears smaller scale fishermen are being hit at every turn. We saw the same thing happen in the case of salmon fishing. Many of those who have had their quotas reduced considerably this year are small-scale operators who merely supplement their incomes through the fisheries. They are finding it hard enough to make a living as it is. While the fishermen to whom I have spoken have no problem with the 40% escapement rate, I am sure the Department is aware that during the season, owing to their tidal nature, rivers can be fished for only 15 days each month. The season runs from June to September. Up to four years ago it was possible to fish until Christmas. In my area fishermen catch brown rather than silver eel. Owing to the nature of demand in the export market they supply in Holland, eel must be over 14 inches in length. If they catch eel which do not meet this criterion, they are released. Every effort is being made to allow eel to survive and fishermen have been given no indication that stocks have been depleted. Perhaps that is not the case in other areas but I can only speak for mine.

Mr. Brennan has said the European Union requires the adoption of management plans. If pressure has been building for a number of years, why have we not put an eel management plan in place before now? Mr. Brennan mentioned a 50% reduction. How will that be achieved? Will it be based on the number of licences in each district? This suggests that once the management plan is in place, whatever is imposed will be reduced. I presume the plan will come into effect during 2006 and will no longer be in operation by 2007. Any slippage in that regard would result in fishermen being penalised for two years. If that happens, will fishermen receive compensation similar to that agreed in the setaside regime for salmon management?

Mr. Brennan referred to a national plan suitable for local conditions. Perhaps he will expand on that a little further in terms of how it will work. Will fishermen be represented on the new working group?

Mr. Brennan

On the question of complete closure, there is no doubting the evidence of the decline in eel numbers. The facts are on the record. Complete closure is an option. The reason it is on the agenda relates to cost and difficulty of enforcement where only a small catch is permitted. It is merely an issue for consideration, no decision has yet been taken. Where only a zero catch is permitted, enforcement is easy because nobody should move eels around in tanks on one's territory. Once one permits a catch the enforcement burden is expensive.

Senator Kenneally asked how a 50% reduction will be achieved. The original proposal was to reduce the fishery period from the first to the 15th day of each month. Following negotiations by the council working group it is now likely the season will be shortened to two months. There is a growing consensus in that regard. The Senator also asked why there was not a national plan before now. Eel is an international species. There is no such thing as an Irish eel. Addressing this issue required a European scale effort. In 2002 the Department established a working group which reported in 2003 on eel issues in Ireland. A similar analysis a couple of years ago — I do not have the exact date — by ISIS and others lead to a call on the Commission, at Council level, to examine the issue and bring forth proposals on it. We now have that proposal. That is the order of events.

On the reduction in effort, it is difficult to curtail licences or to implement only half the number required. On compensation, we are awaiting the outcome of the working group on salmon issues which will potentially set the headline in this regard. We must learn from our experiences. I do not make the rules in terms of who is compensated. I hope I have addressed all the Senator's questions.

Senator Kenneally

I have a few brief supplementaries based on Mr. Brennan's reply. Who will make the decision on closure or non-closure? Will it be made by the Council of Ministers or locally by the Minister? My next question relates to the reduction of the fishery season to two months. This ties in with an earlier question which Mr. Brennan did not answer on the management plan for different areas. I come from the south east where fishing is done on tidal waters. Mr. Brennan stated most fishing is done in lakes, which would not be tidal. The effect of the reduction would be that those who fish on lakes would be able to do so for the entire two months whereas those who fish on rivers, because they are tidal, could have their fishing time reduced to one month. If those who fish on rivers are to be treated fairly they must be permitted to fish for four months though they would effectively be only fishing for two months. Will the plans for different areas take such issues into account?

Mr. Brennan

The Senator asked if fishermen would be represented on the working group. In accordance with current thinking, the group as tentatively set up includes officials from the Department and regional fisheries managers with some scientific input. We have not yet settled on or thought through who comes under the heading "relevant stakeholders" and are open to suggestions in that regard. In general, the more vested interests one includes in a group, the less likely it is consensus will be achieved.

Chairman

That would depend on who are the vested interests.

Mr. Brennan

Yes, it would.

Chairman

The committee would like if Mr. Brennan could ensure stakeholders are included. I am sure he would agree it would make for better regulation and so on.

Senator Kenneally

Mr. Brennan did not respond to my question on the local management plan.

Mr. Brennan

What I am trying to get across is that problems differ from area to area and as such the regulation allows for different plans for each area. There is much implementation analysis yet to be done. The working group has been set up to consider what type of plan best suits Ireland. I do not have a specific answer to the Senator's question. However, the regulation provides that plans may be devised for each area.

Deputy Kelly

I welcome the delegation. I am sure they will do their best for everybody concerned. I am sure they are aware that nothing is impossible. I have heard many people state particular things could not be done but where there is a will, there is a way.

Deputy Broughan

Deputy Kelly should be Taoiseach.

Deputy Kelly

One never knows, I may be some day. The Deputy might even have the pleasure of casting a vote for me.

Deputy Broughan

He is just what his party needs.

Deputy Kelly

I almost fell off the chair when I heard Mr. Brennan refer to complete closure. I speak on behalf of eel fishermen in my constituency of Longford-Westmeath to whom I sold a great deal of eel cotton and eel hooks at one time. They are decent, hard-working, respectable people who are part of a community which has had a tough hazardous life while earning its living catching eels. These people are the salt of the earth. While they may represent only a small part of the industry, they must be considered.

Prohibition was also mentioned. Many places in America were closed during prohibition yet there was more booze flowing then than prior to prohibition. I agree with the Chairman that eel fishermen, though stakeholders, must be represented on the working group. They should not be ruled out and should be consulted at all times. We have come a long way during the past couple of years but let us hope we have not come too far. Let us not forget about our people whom I believe should come first in everything.

I note Mr. Brennan stated he did not mean to suggest there would be complete closure and that he was only stating it is an option.

Deputy Durkan

Mr. Brennan was winding up Deputy Kelly.

Deputy Kelly

He succeeded in winding me up but he is a nice man and I know he did not mean it that way. He is doing the best he can.

This must not become a fait accompli where we hear one morning that all the eel fishermen have been put out of business. There are not many eel fishermen on Lough Ree and the River Shannon — it is a minority activity, but out of little acorns grow big oaks. We must consider the needs of those engaged in minority occupations by asking ourselves what action we would take if we were in their shoes. When representatives of the Department go to Brussels, they must keep the eel fisherman and fisherwoman in mind and try to come to some arrangement that will accommodate their needs.

In regard to the prospect of complete closure, it seems the people in Brussels must steady themselves somewhat. To talk about complete closure of anything these days is stretching matters too much. I can see from the way Mr. Brennan is nodding that he agrees with everything I say. I am confident he will bring our views and concerns to the table and that the Department and the Government will seriously consider including one eel fishermen spokesperson in the process before it gets out of hand.

Deputy Broughan

I welcome the delegation. We are talking about a remarkable and interesting species whose life cycle seems to be the reverse of the salmon. It is probably past time that we recognised it is a distressed species and perhaps now the EU will do something dramatic about it. I have seen plenty of eel for sale in Germany and parts of France. Are there other countries and catchment areas where significant numbers of eel are caught? It is clear we do not play a central role in this species' life cycle as we do with salmon. I accept what my colleague, Deputy Kelly, said in regard to protecting those hard-pressed people who earn a part-time living through eel fishing but it is important to preserve what seems to be a severely threatened species. We must move forward in co-operation with our European colleagues, particularly those member states that have the greatest responsibility for the survival of the species. I welcome the proposal.

Deputy Durkan

I only ever caught one eel but I had to deal with several before and since. I am all in favour of conservation — if the stock is down we must do something about it — but we should not be the only ones taking action in this regard. Given that we have only 1% of the total market, it is not desirable that, while we make serious efforts to conserve the stocks, our friends in Europe do otherwise. This issue has arisen in the past in discussions on fisheries generally. It is not my portfolio but I will set out my view.

I presume it is difficult to count the eel but have we an accurate method for doing so? If the stock is down to the extent purported, how has that been gauged? Did somebody in Brussels decide stocks were down throughout Europe? Is it gauged on the basis of catches or some other basis? We know from reading about them in newspapers that Lough Ree is one of the major eel fisheries in the State and that Lough Neagh is the largest on the island. Where are the rest of the eel fisheries located? Any curtailment will necessitate some degree of compensation. It may take a significant period to bring the stocks back up, perhaps more than five years. Is that correct?

Mr. Brennan

Yes.

Deputy Durkan

Where have stocks diminished most seriously throughout Europe?

Deputy Eamon Ryan

German fish are arriving here and fish of no nationality, Zaragoza eel in particular. Is there a scientific indication that the reduction in eel stocks is primarily due to over-catching, or is it a consequence of environmental factors? I have heard stories of eels being mushed up in ESB turbines. What can we do to reduce this loss? Are we certain procedures are in place in Ardnacrusha to allow eel back down the Shannon, the problem being mainly with the descent?

Mr. Brennan

I will do my best to answer all members' questions. The counting of eels is done largely through catchings and landings, under the auspices of the International Council for the Exploration of the Sea. The graph I have circulated shows that the reduction in the average landing from 1980 to 2005 is dramatic.

There is no question of acting alone on this. The proposal is required because the nature of the species means nobody can act alone to protect it. We like to believe we are a listening Department and I assure Deputy Kelly I will inform the Minister of the points raised by members. It is unthinkable that we would make a move like this without consultation, but representation is a matter to be determined by the Minister.

The landing statistics for catches in the Netherlands, France, Italy, Spain and Britain show there are significant eel fisheries in these member states. In Ireland, the silver eel is predominantly a Shannon catchment issue. Brown eels are found mainly in the Shannon river and the eastern and north-western regions but are also found in significant numbers — perhaps half as many — in the southern and western regions.

I sense a significant amount of special pleading on the part of the ESB and other hydro-generators throughout Europe in trying to get this regulation shaped in their favour. I too have heard that some turbines are allowing eels to pass, or are "mincing" eels. I intend to investigate this further in consultation with the ESB. This is mainly about catching above the dam and releasing below the dam because turbines cannot be turned off for long periods. Eels are bottom swimmers and so are unlikely to swim over the dam because they do not get up that high. I am new to this job and I am learning as I go along but I am aware there are significant issues that warrant further examination in terms of what the electricity industry is doing to eel stocks.

Chairman

Is it agreed that the clerk will prepare a report on COM (2005) 472 indicating that the joint committee has concerns that stakeholder representatives should be included in discussions and that complete closure may be too draconian?

Deputy Eamon Ryan

If you leave out the last comment, there will be no problem.

Chairman

Have I not captured what the Deputy is saying?

Senator Kenneally

Will Mr. Brennan tell the committee whether the Department will have to obtain approval from the Council of Ministers or the Commission in Brussels for the local management plans or can they be prepared domestically?

Mr. Brennan

Approval will have to be obtained from the scientific committee of the Commission, not the Council.

Chairman

There is the question of whether I have captured the committee's intention.

Deputy Broughan

There is no need to include the last comment.

Chairman

In that case, we will confine it to stakeholders.

Sitting suspended at 5.20 p.m. and resumed at 5.30 p.m.

Chairman

The next presentation concerns COM (2005) 575 and COM (2005) 617. COM (2005) 575 is a proposal for a Council regulation fixing for 2006 the guide prices and Community producer prices for certain fishery products pursuant to Regulation (EC) No. 104/2000. COM (2005) 617 is a proposal for a Council regulation fixing for 2006 the opportunities and associated conditions for certain fish stocks applicable in Community waters and Community vessels in waters where catch limitations are required.

I welcome Dr. Cecil Beamish, assistant secretary, Department of Communications, Marine and Natural Resources, and his officials. We will hear a short presentation which will be followed by a brief question and answer session. I draw the attention of those in attendance to the fact that while members of the committee enjoy absolute privilege, the same level of privilege does not extend to witnesses appearing before the committee which cannot guarantee any level of privilege to witnesses. Under the salient rulings of the Chair, members should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.

Dr. Beamish

I am joined by my colleagues, Dr. Terry McMahon of the Marine Institute's marine environment and food safety service, MsJosephine Kelly, a principal officer in the seafood policy division in the Department, Ms Rebecca Minch of the aquaculture development division in the Department and Mr. Seamus O'Reilly from the seafood policy division. The Department was given notice of three proposals, including the two mentioned by the Chairman. The third was COM (2006) 154, a Council regulation concerning the use of alien and locally absent species in aquaculture. I have prepared a presentation on all three which I can discuss with the committee.

Chairman

We were too late in seeking to include the third regulation in the agenda for members. We have only just received notification from the sub-committee. However, Mr. Beamish may proceed to discuss all three.

Dr. Beamish

COM (2006) 154 is a proposal on the use of alien and locally absent species in aquaculture. It has been the subject of consultation with the fishing and aquaculture industries. COM (2005) 575 is a Council regulation fixing for 2006 the guide prices and Community producer prices for certain fishery products. The regulation was adopted in November 2005. COM (2005) 617 is a Council regulation fixing for 2006 the fishing opportunities and associated conditions for certain fish stocks and groups of stocks adopted at the Fisheries Council in December 2005. It has since been the subject of two amendments.

COM (2006) 154 has been brought forward as part of the Commission's strategy for the sustainable development of aquaculture. The objective of the proposal is to establish a new framework to govern aquacultural practices and the introduction and production of alien and locally absent species. Currently, we have fish health legislation governing this area which only covers the health status of fish being imported, other than where a species is being placed in a special area of conservation. In the case of placement in a conservation area, there is a requirement to assess the impact on the local ecology. The objective of the proposal is to support the economic growth of the aquaculture industry and assist its diversification into new species, while anticipating and preventing any detrimental impact on indigenous populations. The industry is currently worth €100 million a year and has great potential to develop further.

Members will be aware of instances where alien species have been introduced in Ireland. The zebra mussel and others were accidentally introduced, though not through aquaculture activity. They came in on boats or in ballast water. This deals purely with the risks for species being introduced for aquaculture purposes.

The basic principles are that operators wishing to introduce these species must apply for permits for movement of alien or locally absent species and a specialist advisory committee must be established to assess whether the movements are to be classified as routine or non-routine. The procedures that would then apply would depend on the assessment.

Deputy Broughan

What is the difference? Would non-routine movement be where one is growing the species?

Dr. Beamish

The issue raised by the Deputy is dealt with later in the submission. For almost 30 years we have been growing certain alien non-indigenous species such as Pacific oysters and have not experienced any problems in that regard. This also applies to the abalone species, which we now grow in the west. The assessment would be based on whether something is novel, whether there are risks attaching to it or if it is, at this point, routine practice. Where such is deemed to be non-routine movement, an environmental impact assessment is required, followed by a risk assessment by the expert group. The proposal leaves to the discretion of each member state the decision as to who should undertake the environmental impact assessment. However, the risk assessment must be undertaken by the expert group.

Following issue of permits and release of species, monitoring arrangements are required to be in place for at least two years. It could also be required, depending on the level of risk, that the species only be released into a closed system in the first instance. All documentation in regard to this process must be made publicly available by the competent authority.

Under the proposal, Ireland would be required to designate a competent authority to ensure compliance with the regulation. The competent authority would then appoint an advisory committee of scientific and technical experts to assess applications for permits to introduce alien or locally absent species. As this is a new task, there will be an increase in the resource requirements of the competent authority and increased obligations for the industry.

A number of what are defined under this proposal as alien species have been introduced and successfully farmed in Ireland for many years, namely, Pacific oysters and rainbow trout. Overall, these species, which we prefer to call traditional, non-indigenous, are generating approximately €15 million at first sale of aquaculture product. As these species attract a low risk status and are well established, we do not believe that they should be subject to detailed assessment processes, a position which we intend to present in respect of this proposal.

Where species are being moved, as regularly happens when shellfish are harvested and relaid, the risks are low and we are seeking clarification that this regulation will not apply in such cases. One of the benefits of the proposal, apart from protecting the environment and other species, relates to our export of species such as Pacific oysters to a receiving country that may argue against taking in the species because it is not indigenous. Under this proposal, such countries would have to undertake a risk assessment and provide justification for not doing so. This proposal could result in a trade benefit for Ireland.

Deputy Durkan

May we ask questions on the first proposal?

Chairman

Yes.

Deputy Durkan

Dr. Beamish stated that species are often accidentally rather than deliberately introduced. To what extent are species accidentally introduced? Have any species been found to be detrimental to other fish stocks? For example, I recall watching a marine programme in which a Pacific snapper ate an Atlantic snapper for breakfast. Obviously, the situation is being monitored. Will the regulation have a detrimental affect in Ireland?

Deputy Broughan

Who will be the competent authority? Dr. Beamish mentioned abalone and our success abroad with shrimp. The issue of sea lice has been widely debated. Is there such a concept as routine or non-routine movement? It may be that in the past the system was invigilated better and that some of the problems were not encountered in the development of aquaculture.

Dr. Beamish

I will address some of the points made and then ask my colleague, Dr. McMahon, to respond to the questions on the species which have been introduced accidentally.

The regulation does not deal with all risks in the context of alien species. It relates to those making proposals for aquaculture installations and who wish to introduce a new species for the purposes of farming. It will also regulate that environment. Species which are accidentally introduced on, say, the hulls of boats, in ballast water or through pet shops are not dealt with in the regulation. Those risks are encountered in other spheres.

The main non-indigenous species we are currently farming are the Pacific oyster, rainbow trout, Manila clam and abalone. By and large, they have been successful introductions, with no major impacts. The regulation provides that we will have to take a much more structured approach in decision-making in the introduction of other species. In food production terms the aquaculture industry is very young and likely to grow rapidly during the next ten to 15 years. Many species are being tested and the subject of trials around the world. If Ireland wants a piece of the action, it has to be open to diversification. The future does not lie in salmon or oyster production. While there are risks, there are also benefits. The regulation provides a framework for dealing with those risks. People are interested in introducing barramundi and Pacific white shrimp. If we want to maintain economic activity in our coastal communities, we must be open to diversification and the extension of aquaculture activity.

Deputy Broughan asked about the negative aspects of the regulation. Obviously, it provides a regulatory framework which will impose on us some obligations. However, on balance, it will be to our benefit in avoiding ecological or other impacts which may be detected by use of the framework and allow us to export species in a structured way.

Deputy Broughan

Will the authority be established under the 1996 Act?

Dr. Beamish

We are only dealing with a proposal at this stage. Dr. McMahon is a member of the aquaculture advisory committee. We anticipate that the expert committee established under the regulation will operate within that framework. It may be a sub-committee within that structure. We also envisage that the Marine Institute, BIM and the national parks and wildlife service will be represented on the committee. It may also be necessary to include someone who can offer expert zoological advice. There is already in place a structure dealing with the licensing of aquaculture activity and it is proposed that this committee will fit within that structure.

Dr. Terry McMahon

The question was asked as to whether there had been any detrimental effects in the accidental or deliberate introduction of aquaculture species. To date there have been no such effects. So far as we can determine, none of the species introduced has had a significant ecological impact. However, two issues arise. Countries such as New Zealand which have introduced the Pacific oyster have noted that it is out-performing the native oyster. We must also consider the possible introduction of non-target species, namely, species of shellfish dredged in an area outside Ireland. While the target species may not have had any significant impact, an attached seaweed, pest or parasite could be accidentally introduced during its introduction. One of the aims of the regulation is to assess the risks associated with the introduction of non-target species with target aquaculture species.

Chairman

We will now proceed to the next proposal.

Dr. Beamish

The next item is COM (2005) 575, a proposal for a Council regulation fixing for the 2006 fishing year guide prices and Community producer prices for certain fishery products. This is part of an annual structure under the Common Fisheries Policy regarding a legislative framework for price setting. Prices are based on submissions from member states on data for the previous three years. The proposal covers a range of species, including mackerel, monkfish, cod and whiting, and feeds into the system of intervention operating under the Common Fisheries Policy. The intervention system used in the past to withdraw or destroy fish products for which there was no market is increasingly used for storing, processing and returning them to the market when the price improves. Fish is in short supply and as market prices increase, the intervention system is decreasing in importance.

Deputy Broughan

What species are covered?

Dr. Beamish

A range of species is covered by the regulation. However, much depends on price and whether there is a glut in the market. Currently, there is a large high pressure zone across western Europe and everybody is fishing simultaneously. The market for fresh products tends to be fixed. Everybody will land following two weeks of very good fishing and supply will be great. The danger is that prices will collapse and everybody will suffer. This situation would have been alleviated in the past by the setting of a minimum price which ensured fishermen were paid and fish withdrawn when prices fell below it. This is of less significance now as the appetite for fish has increased. Ireland spends approximately €2 million per annum on intervention. Approximately €18 million per annum is spent on the scheme across Europe. Approximately 1% to 2% of European production of pelagic fish is placed in intervention. The figure for whitefish is less than 1% and falling. Given the overall situation, it is very much a marginal scheme.

While the price for whitefish species such as cod and haddock has increased by between 1% and 1.5%, the price for other whitefish species has decreased by the same amount. While the price for the main pelagic species such as herring, mackerel and anchovies has increased by between 2% and 3%, the price for some of the southern pelagic species has decreased. In general, the price setting mechanism does not impact on the market. Market prices tend to be higher than guide prices. As such, guide prices do not relate to what is happening in the market. Generally, for most fish products demand is stronger than supply.

Deputy Broughan

It would never be possible to reform the Common Fisheries Policy in the way the Common Agricultural Policy has been reformed because of the nature of production.

Dr. Beamish

I am not sure which part of the CAP the Deputy has in mind.

Deputy Broughan

The abandonment of the intervention system.

Dr. Beamish

We are moving away from intervention. Events have made the system less necessary and less attractive. The current level of intervention is low.

Senator Kenneally

I did not realise the intervention system was still in place, given the strong demand for and supply of fish. However, I accept there are times when it must be used such as when there is a glut of fish in the market. Dr. Beamish has stated very little is spent on intervention and that the system is only in place to provide stability in the market. Where are fish stored? Are they ever destroyed, or are they simply stored and reintroduced to the market when prices improve?

Ms Josephine Kelly

Generally, fish are withdrawn from the market, processed and stored in factories. They are then reintroduced and sold at a higher price when prices improve.

Senator Kenneally

Are fish processed and stored in Ireland?

Ms Kelly

Yes, fish landed in Ireland which do not meet the market price are stored here. The Senator asked how many fish are destroyed. Very little is destroyed nowadays. This would only happen where a low volume is landed and it would not make economic sense to transport the fish caught to a factory for processing and freezing while awaiting reintroduction to the market. These days the intervention system is only used in a small number of cases.

Senator Kenneally

In the situation outlined by Ms Kelly could the fish not be given, as happened some years ago in the case of meat placed in intervention, to, say, the Society of the St. Vincent de Paul and others for distribution? Has such a possibility been considered?

Ms Kelly

It has been considered more than once. However, as fish products only have a short shelf life, it is not a commodity that can be easily distributed in such an environment. The product which is "destroyed" is transported to a fishmeal factory for use by the industry. As such, we do gain an economic return from it.

Dr. Beamish

The third item is a proposal for a Council regulation fixing for 2006 the fishing opportunities and associated conditions for certain fish stocks. This regulation is colloquially known as the TAC and quota regulation for the Common Fisheries Policy. It is a product of the December Fisheries Council with which, I am sure, members are familiar. It was previously used to set total allowable catches and national quotas for fish species. However, it has been growing year on year for the past five to seven years and now deals with implementation of management plans for fisheries, recovery plans for fish stocks, effort limitations on fishermen, the number of days at sea, a variety of control measures, the weighing of fish and closed areas. It is a multi-head instrument which deals with everything flowing from the scientific advice received in the autumn. All of the management measures developed within the Common Fisheries Policy tend to be included in it.

The December 2005 proposal provides for reductions of 15% to 20% in total allowable catches and 15% in fishing effort — the number of days fishermen may spend at sea. It also introduces a variety of other technical measures such as a ban on the use of deepwater gill nets and restrictions on deepwater effort. The process involves the formulation of a proposal by the Commission on receipt of scientific advice which tends to be made available in late September, October or early November, depending on the species involved, and works its way through the scientific peer groups. The Commission brings forward its proposal in late November. It has started to produce a paper which will indicate the elements which will be included in the proposal. This year saw, for the first time, the involvement of the new regional advisory councils which provided for the direct involvement of the industry in the decision-making process. Nationally, we engaged in detailed discussions with the industry, as we had done in previous years, in the run-up to the December Fisheries Council on all matters of national interest. The regulation was agreed at the Council on 22 December. Ireland sought a number of changes to the Commission's proposal which were based on scientific advice, experience of area closures or recommendations from the regional advisory councils. Ireland supported the proposal in respect of a deepwater gill net ban and argued for smaller reductions in the numbers of days at sea in the case of the Irish Sea and north-west areas. It was of the view that the proposal was being driven by what the Commission wanted to do in the North Sea.

Irish fishermen have a quota of 200,000 tonnes this year and the situation is relatively stable. The demersal or whitefish quota is approximately 34,000 tonnes, which represents a variation of1%. There are 30 whitefish stock quotas of interest to Ireland, four of which were increased, 22 decreased, while four remained unchanged. The pelagic fish quota is 122,453 tonnes. It also remains relatively static. The mackerel quota increased by 4%, while the horse mackerel quota decreased by 15%. The mixed consumption fisheries which include argentines and blue whiting are largely used for the production of fishmeal and fish oil, although not exclusively owing to an increase in human consumption. The quota is 43,300 tonnes.

The Hague preferences are discussed every year at the Council as an element dating from the foundation of the CFP which applies to Ireland and the United Kingdom. We were able to have the preferences applied to six whitefish stocks and obtained an additional quota of 1,463 tonnes.

Chairman

What is the tonnage in the context of quota swaps with regard to the Hague preferences?

Dr. Beamish

The Hague preferences represent a system whereby when certain stocks fall through agreed floors, the figure is halved and removed from other member states in favour of Ireland and the United Kingdom. The Hague preferences were applied in the case of six whitefish stocks this year and the gain for Ireland was 1,463 tonnes.

The deepwater gill net ban resulted from growing concern over a number of years and work done by BIM and other EU agencies on the impact of the use of very long gill nets in deep water, especially in monkfish fisheries. The report on the matter was finalised last year and, with Ireland pushing hard, the Commission imposed the ban. It was imposed because nets were being left in the water for far too long, leading to the waste of a great deal of stock. Nets are sometimes abandoned. The ban applies in all relevant fishing areas around Ireland where there is deep water and the application of nets beyond the 200 metre depth line.

Deputy Broughan

In a sense, we are discussing ancient history. The figures are for taxes and quotas for this year, rather like the Estimates debate which takes place halfway through the year. Do we have any way to assess the impact of the gill net ban to determine whether it has been successful? Have many been arrested for gill net fishing?

Dr. Beamish

There have been further developments since agreement was reached in December. The picture is evolving. One is unlikely to see an impact over a timescale of four to five months. Given biological life cycles, it will be three or four years before an impact is observable.

Deputy Broughan

How can we establish that gill nets are no longer being used? We constantly heard reports on what was happening across hundreds of miles of our territory.

Dr. Beamish

Gill nets are not banned. Their use is restricted in certain circumstances or areas but this is only one of a number of initiatives which have been taken. A new Commission regulation has been introduced which Ireland long sought to improve the marking of gill nets to allow the Naval Service to find and check them at sea to ensure compliance in terms of length and ownership. As there will probably be further questions on this issue, I will run through some other matters and revert back to this one.

Other measures included in the regulation include a reduction of 10% in the deepwater effort, now down to 80% of the level it was at in 2003. This is the result of concerns about the state of deepwater stocks. The regulation provides for the closure for two months of certain boxes in the Celtic Sea to protect Celtic Sea cod. There are also dated reductions of up to 15% in respect of various species. Adaptations were made in May following a management committee decision. The amendment has become an annual event after the end of the year when minor breaches of quotas or notifications of failure to meet them are dealt with by adjustments to annual quotas. This process is covered by what is termed the "flexibility regulation". In Ireland 23 quotas were increased and two reduced, which means there has been an adjustment in the figures since December. The statistic with which people will be most familiar is the reduction of 6,500 tonnes in the mackerel quota owing to undeclared landings in Scotland in 2005.

Deputy Broughan

My colleague Deputy Perry seems to think there is still no legal basis for the Minister to concede this point. The legal question is far from settled. There may well be political reasons the Minister ceded a significant part of the quota without being required to do so.

Dr. Beamish

The CFP states very clearly in Article 23.4 that when the Commission establishes that a member state has exceeded the fishing opportunities allocated to it, it shall apply deductions to the future fishing opportunities of the member state concerned.

Deputy Broughan

Was it confirmed that we had exceeded the quota?

Dr. Beamish

There are variations in dozens of quotas within the CFP. They are not unusual. In this case landings in Scotland were reported by the United Kingdom to the Commission which made the appropriate reductions in the 2005 allowable catch, as it did in respect of all other reported cases. While this item received a great deal of attention, it is just another in a long list of quotas in respect of which reductions have been made.

Deputy Broughan

It is a huge reduction. In terms of the mackerel quota it is a very significant percentage of the total.

Dr. Beamish

The relevant reduction for the UK quota is 28,000 tonnes. No member state voted against this regulation. It is a normal regulation which was set up within the Common Fisheries Policy.

Regulation No. 51/2006 was published on 27 March this year. It is a relatively small issue. It deals with blue whiting and herring. It follows negotiations with the Faroe Islands and allows for mutual access in respect of EU and Faroe Islands zones. Under this regulation Ireland was allocated two licences to fish for herring in the Faroese zone. The amendment which is proposed to the regulation takes forward the issue of the deep water gillnet ban. A deepwater report was done last year. The Commission proposed emergency measures on foot of it. The TAC and quota regulation overtook the emergency measures and put a gillnet ban on all fisheries outside 200 metres. The North Western Waters Regional Advisory Council, which is the relevant fishing industry advisory group on which our industry participated, met on 28 February in the Hague and recommended that the gillnet ban be relaxed in the case of the gillnet hake fishery. The primary concern in the DEEPNET report was in regard to monkfish and deepwater sharks. After consultation with the industry the Commission brought forward a proposal to remove the ban on the use of 120 millimetre mesh gillnets in the hake fishery but is retaining the ban in regard to the monkfish fishery. In that way it seeks to avoid a recurrence of the practices identified in the DEEPNET report.

Deputy Broughan

If the Navy came across even a clearly marked gillnet, how would our authorities have a clue what fishery it was?

Dr. Beamish

There is a specified mesh size, depending on the target species. For hake it is 120 millimetres, for monkfish is 220 millimetres. There is a very sizeable difference in mesh size. It is illegal to fish for monkfish with a 120 millimetre gillnet. Nets have to be marked and identified. There is a new regulation governing that. It should be possible to distinguish the hake fisheries from the monkfish fisheries. That is the evolution on that at the moment.

Deputy Broughan

In the debate on the fisheries Bill, now an Act, the Minister mentioned that the protection agency is to be set up in Clonakilty but nothing seems to have changed since the passing of the Act in regard to the deficiencies we clearly became aware of during that debate. That is why it was such a traumatic political discussion, especially for the Government Deputies. The Community Fisheries Control Agency in Vigo does not seem to be up and running. We seem to exist in a world where things are what one says they are rather than in a world where there is any kind of measurement. I know this is hunter-gathering but when one talks to people in the industry — I was in Killybegs last week — one realises there are many people, particularly the workers in the processing plants, who are really suffering at present because of this regulation.

What, if anything, has changed in regard to the invigilation of the Common Fisheries Policy, particularly in regard to the non-Irish fleets, since our discussion? Has the Department any strategy for 2007. Has it, for example, worked out the kind of tonnage it is seeking or that it should get in pelagic and demersal fisheries and so on? Has it been examined in the context of scientific advice?

What is the purpose of scheduling discussions from September onwards? It is bizarre that decisions on TACs and quotas always seem to be made on Christmas Eve when the House is not sitting to invigilate. The Deputy who said the Common Fisheries Policy was corrupt is not present but many agree with that view. When I was addressing a public meeting in Killybegs last weekend, I received an unsigned document in which it is was stated the Common Fisheries Policy had been operated very much to the detriment of this country and needed a full frontal assault. This was from a person who had praised the Whitaker report and the two from Padraic White, asking why nobody was taking notice of Mr. Whitaker or Padraic White.

During the debate on the fisheries Bill there was much excitement among certain journalists presenting a view of the Department but we have heard nothing since about fisheries, even though they continue to operate. What has changed? We need a real and transparent discussion on sustainability at this committee or in the Dáil but not on 23 and 24 December. The only people who submit plans on 23 and 24 December are developers who do not want politicians and local communities to know what they are up to. The issue is crying out to heaven for possibly serious reform. While there is nothing we can do about COM (2005) 617 which is under discussion, is it not time the Department took a much more muscular and proactive role in these matters?

Deputy Durkan

When fish stocks are falling, we must all make a contribution to bringing them back up. However, I am sceptical about some of what I hear, given the activities of some large operators from other countries which I will not name. I acknowledge that we ourselves have one or two big operators of vessels. However, the critical issue is the extent to which this regulation is likely to impact on the fishing industry here, coming as it does on top of previous reductions in quota and TAC.

Senator Kenneally

To some extent, I am on the same tack as Deputy Broughan. This is rushed every year. It is introduced and suddenly the Minister is off to Brussels. There is a rush to get it out of the way before Christmas. It is not Ireland's fault this happens. The matter should be examined in a European context.

While I am aware we cannot rewrite history, Ireland has been treated unfairly. It seems it is always making sacrifices, some of which are listed. Our deepwater effort is down to 80% of the 2003 level. There is closure for two months in the Celtic Sea. There is a reduction of 15% in the number of days at sea for cod vessels. In the overall context of the European fishery Ireland is relatively small but at all times it seems to be carrying too large a burden. I wonder whether the other member states are taking the same hit. It appears they are not.

Dr. Beamish

I will not answer for every aspect of the Common Fisheries Policy which we have inherited and must work with. It has been in place for 30 years and been the subject of two reviews — one every ten years. According to the timescale, the next one is due to be held in 2012. We must work within the confines of the outcome of the 2002 review.

To take up the points made by Senator Kenneally, my comments about the 80% reduction, etc., apply equally to any fleet in the fishery. It is a common measure which does not apply only to Ireland. Where there are reductions in the total allowable catch, they apply across the board to all fleets operating in the fishery.

Senator Kenneally mentioned the two-month closure in the Celtic Sea. Those involved in the fishing industry in the south east were anxious that there be a closure because they saw it as a valuable conservation measure and it would avoid other approaches to conservation which they considered less attractive.

Senator Kenneally

If I remember correctly, the Belgians were not happy with this at the time. We seem to be making the effort to conserve. I am wondering whether we should be bothered if the rest of them do not.

Dr. Beamish

This is an example the State and the industry working closely together — we often hear the opposite — and successfully in the national interest. We both followed a strategy over two years. This year it is applicable in all relevant months.

The Belgians were primarily interested in the effect on flat fish fisheries. They were not as worried about cod. As we are, there is a different balance of interests.

Deputy Durkan asked about the extent to which the regulation was likely to impact on the industry. It is part of the annual cycle. As I stated, the measure has been growing and evolving while fish stocks have been declining. Management has become more sophisticated in conserving stocks. Therefore, the regulation will impact on the industry but in a sense this is not new. It expects this, given the environment in which it has been operating for many years. There is considerable dialogue with it up to the point where the regulation is agreed. There is also much dialogue with it on how we manage what we have. The Department works closely with it, as has been evident during the years at this committee where we discuss regulations as they arise.

We all are aware that there are many issues to be resolved in fisheries. There are large and small operators and the application of the rules is obviously an issue for everybody. The general principle is that, whatever is appropriate and intended to apply, we must find a way of making conservation measures work.

Deputy Broughan stated nothing had changed since the debate on the Sea-Fisheries and Maritime Jurisdiction Bill which was only enacted in April. He also stated the Community Fisheries Control Agency in Vigo was not up and running. Next week there will be a meeting in Vigo of the administrative board of the new control agency which should appoint the chief executive officer and establish orders.

Deputy Broughan

When will it be up and running?

Dr. Beamish

I will know better after the meeting. The Commission is saying the agency should be up and running by the end of the year.

Deputy Broughan

Which means it will be probably another two or three years before it is operational.

Dr. Beamish

I can only say what the Commission has stated.

It is not so much a case, as Deputy Broughan put it, of having a strategy for how much fish one wants to catch by the end of the year as we must be guided by what science is telling us. If it is telling us that stocks are seriously depleted——

Deputy Broughan

My point is that this was a snap shot last December. I am asking what the Department's strategy for this year is. Given what we know of the science involved, what is the Department's strategy for the next six months as we move towards the negotiations?

I realise the Department operates in the way others do. We have had a similar debate about the Estimates. When we examined the Estimates for the Department a few weeks ago, for example, we were talking about moneys that had been voted upon on 1 December last for 2006. It is my party's contention, which many other Deputies would share, that we should be talking about the funding that will be required in 2007, rather than funding which is in the process of being spent. In a sense, we are discussing a regulation which is history, although it has six months left to run.

Dr. Beamish

Senator Kenneally spoke of it in terms of the December Council being a rushed affair. For all European countries it is a rushed affair. As officials, we spend many weeks on the road in the months of November and December and then many nights working and negotiating in the week before Christmas. We like it as much as members or anyone else.

Deputy Broughan

If the Fisheries Council was to be held next week, would the Department be in a position to outline the country's maximum demands? That is my point.

Dr. Beamish

That is not how it operates because one must know the state the stock is in and the scientific requirements. One must also know what mix of fishing opportunities is likely to be available to the fishing industry the following year. One must work out the extent to which a balance can be struck between the requirements of the industry for viable fishing opportunities and the state of individual stocks. This information will not be available until the latter part of the year.

We have been participating in discussions with other member states and the Commission on front-loading this process and breaking up the December Council scenario because everybody has the same view. We are trying to move to a situation where the position on deepwater and, I hope, pelagic species will be decided at Council in April, or perhaps later when we have the science but certainly in the first half of the year, and we will then deal with the demersal species in the second half of the year. That is not yet certain but the discussions are ongoing. The Commission has been dealing with the international scientific community and trying to demand that it provide the science much earlier in the year but it also depends on biology. If the science for certain species can be provided earlier in the year, the intention is that the decision-making process for those species will be initiated earlier in the year.

Deputy Broughan

The Minister realises the major party in government is in serious trouble among the fishing community and fishery workers. Is the strategy, in which I presume BIM will play a leading role, formulated around the idea that there will be a three or five-year term, in other words, to the end of the period of the current Common Fisheries Policy?

Dr. Beamish

The Deputy is now speaking about something else. This is the national strategy, the terms of reference for which have been sent to the committee, which Ministers indicated at a meeting with the fishing industry and during the debate on the Sea-Fisheries and Maritime Jurisdiction Bill that they would be bringing forward for the period 2007 to 2013, as is being done in other sectors.

The situation is that the European Fisheries Fund has still not been agreed at European level. As the last Fisheries Council failed to reach agreement on the issue, it will be September before we can come back to it. In the context of the emerging national development plan and the normal Structural Funds round, there is a requirement to set out a development strategy for the sector. The terms of reference have been discussed with the fishing industry and the process is underway. In this instance we are talking about the level of resources which can be made available in a given year. This depends on the science provided, the need to rebuild stocks, etc. The development strategy is the subject of a wider exercise.

Chairman

I thank Dr. Beamish and his officials for attending today. I also thank members for turning up. The clerk to the committee will bring forward reports on these proposals for consideration by the committee.

I remind members that on Thursday the committee will discuss the energy report which we will publish at noon. I, therefore, ask them to be present at 10 a.m.

The joint committee adjourned at 6.25 p.m. until 10 a.m. on Thursday, 8 June 2006.