Joint Committee on Housing, Local Government and Heritage debate -
Thursday, 28 Apr 2022

Energy Performance of Buildings Directive: Discussion

Chairman

The purpose of today's meeting is to discuss COM (2021) 802, a proposal for a directive of the European Parliament and of the Council on the energy performance of buildings, which is obviously a significant challenge for this country in terms of how we build and heat our buildings and how we retrofit the housing stock we have to bring it up to a high energy efficiency standard and make the running of those houses affordable. From the Department of Housing, Local Government and Heritage, we are joined by Mr. Seán Armstrong, senior adviser at the climate action policy unit; Ms Margaret Power, assistant principal; and Mr. Derek Rafferty, principal officer, governance and rental standards. From the Department of the Environment, Climate and Communications, we are joined by Mr. Robert Deegan, principal officer, residential energy efficiency division; and Mr. Tony Collins, principal officer, heat and business energy efficiency division. From Sustainable Energy Authority of Ireland, we are joined by Dr. Ciarán Byrne, director of national retrofit; programme managers Ms Dara Stewart and Ms Orla Coyle; and Mr. Chris Hughes, energy performance of buildings directive-building energy rating development.

Members have been provided with the opening statements and briefings. I remind members of the constitutional requirement that members must be physically present within the confines of the place where Parliament has chosen to sit, namely, Leinster House to participate in public meetings. Those attending remotely from within the Leinster House complex are protected by absolute privilege in respect of their contributions to today's meeting. This means they have an absolute defence against any defamation action they say at the meeting. There are some limitations on parliamentary privilege for witnesses who are attending remotely from outside Leinster House and, as such, they may not benefit from the same level of immunity from legal proceedings as a person physically present within the Leinster House complex. Members and witnesses are expected not to abuse the privilege they enjoy. It is my duty as Chair to ensure this privilege is not abused. Therefore, if their statements are potentially defamatory in respect of an identifiable person or entity, they will be directed to discontinue their remarks and it is imperative that they comply with such direction.

Members and witnesses are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

I invite Mr. Armstrong to make his opening statement on behalf of the Department of Housing, Local Government and Heritage.

Mr. Seán Armstrong

I thank the committee for the opportunity to address it on the topic of the energy performance of buildings directive, EPBD. I am joined by Mr. Derek Rafferty, head of the governance and rental standards unit, and Ms Margaret Power, assistant principal at the climate action policy unit.

Housing for All sets out a target of an average of 33,000 new dwellings per annum. The State plans to invest €20 billion in the next five years, which is the largest investment in the history of the State. Over its lifetime, Housing for All seeks to eradicate homelessness and promote social inclusion. The Department of Housing, Local Government and Heritage is implementing a range of ambitious decarbonisation actions for housing, planning, marine and natural heritage protection and analysis of Ireland's climate. In 2021, we worked with the Department of the Environment, Climate and Communications and a range of other Departments and agencies to publish the climate action plan.

Housing for All takes account of our climate action targets though the following policies: the implementation of nearly zero energy buildings through our building regulations, which will ensure that while we achieve more energy-efficient buildings, we also build healthy, sustainable and durable buildings suitable for the Irish climate, both today and into the future; and the Department's retrofitting programme for local authority housing, which is an essential measure to target climate justice. The Department plans to retrofit approximately 40% or 36,500 local authority dwellings not currently performing to a building energy rating, BER, of B2 to get them to B2 or cost optimal level by 2030 at an estimated cost of €1.2 billion.

The Department of Housing, Local Government and Heritage has lead responsibility for the EPBD in Ireland. However, overall policy responsibility is shared between that Department and the Department of the Environment, Climate and Communications and the Department of Transport. The Sustainable Energy Authority of Ireland, SEAI, also has a lead role in the implementation of the EPBD and supporting the development of regulations.

Since the first enactment of the EPBD in 2002, Ireland has implemented the building energy rating system for new buildings and existing buildings which are rented or sold since 2007. We introduced requirements for nearly zero energy buildings for buildings other than dwellings in 2017 and dwellings in 2019. We have set the building regulations performance requirement for major renovations where more than 25% of the surface area of the building is renovated to a BER of B2 or the cost optimal level. In 2021 we set a requirement that electric vehicle charging infrastructure be installed in new buildings or buildings undergoing major renovation which have more than ten parking spaces and in certain existing non-residential buildings from 2025.

Ireland is viewed internationally as an exemplar in the implementation of the EPBD with all new dwellings now requiring an A rating. Recent Central Statistics Office analysis shows that heat pumps are installed as the main heating system in 80% of new dwellings and oil boilers are being effectively phased out in new dwellings. The building energy rating system is also viewed as an international exemplar, with a centralised database and a robust quality assurance and auditing system. A total of 58% of all dwellings have received a building energy rating.

Ireland supports in principle the proposals for the 2022 review of the EPBD. These align with the Climate Action Plan 2021 and Housing for All. We are supportive of the proposals for zero emissions buildings, minimum energy performance standards for existing buildings, declarations of the global warming potential of new buildings and further requirements for electric vehicle recharging Infrastructure. Some of these proposals will require further assessment as they may impact on costs and the supply of housing to the market. The requirement for minimum energy performance standards for existing dwellings is in line with the Housing for All commitments to introduce, where feasible, minimum building energy ratings for rented properties from 2025. The Department proposes that the impact of minimum energy performance standards should also consider traditional buildings, which may have specific technical challenges.

The Department supports the requirement for declarations of global warming potential and proposes that it should be aligned with the timeline for the review of the construction products regulation. The certification of construction products, in accordance with the construction products regulation when reviewed, will ensure that environmental certification is in place throughout the EU Single Market to support global warming potential declarations for new buildings and drive the decarbonisation of construction supply chains. Further proposals on the provision of electric vehicle recharging infrastructure and bicycle parking are also welcome inclusions.

In addition to the points I have outlined, there are proposals on the harmonisation of energy performance certificates, or building energy ratings as they are known in Ireland, carbon removals associated with carbon storage and the calculation of cost optimal levels of minimum energy performance requirements. We are happy to discuss all of these in more detail with the committee today.

We are working very hard to meet housing demand through new builds and the private rental sector. We have ambitious targets in terms of the quantity, type and location of homes to be delivered and we are also ambitious for climate action, including energy efficient housing. Through robust implementation of the EPBD and our building regulations we are ensuring the homes we are building for future generations continue to achieve the high standards we are setting for decarbonising our built environment. We are happy to address any question the committee may have.

Mr. Robert Deegan

I thank the committee for the invitation to address today’s meeting on the subject of the energy performance of buildings directive. I am joined by my colleague, Mr. Tony Collins, principal officer in the heat and business energy efficiency division.

An important aspect of the EPBD proposal is the development of a national building renovation plan to ensure the renovation of the national stock of residential and non-residential buildings. This builds on the requirement of the existing directive on the preparation of a long-term renovation strategy. The Department of the Environment, Climate and Communications published Ireland's current long-term renovation strategy in 2020. This plan sets out our long-term strategy for the renovation of buildings to ensure that Ireland’s building stock is highly energy efficient and decarbonised by 2050.

The Department has since published the national retrofit plan as part of the Climate Action Plan 2021. The retrofit plan sets out a detailed roadmap to achieving our targets of retrofitting the equivalent of 500,000 homes to a building energy rating of B2 and installing 400,000 heat pumps in existing homes by 2030. This will see approximately 30% of the housing stock being upgraded to warmer, healthier and more comfortable homes, with lower energy bills, lower emissions and enhanced asset values.

The plan is designed to address barriers to retrofit across four key areas. These are driving demand and activity, financing and affordability, supply chain, skills and standards, and structures and governance. For each of these areas, barriers were identified and time-bound policies, measures and actions were put in place to address them. Successful implementation of the plan depends on ensuring that effective policy action is taken, and balanced progress is made, under each pillar simultaneously.

Important proposals in the 2022 review of the EPBD, such as the requirement to support renovation through appropriate financial measures, prioritising people affected by energy poverty, providing technical assistance through one-stop-shops, designing financing schemes and addressing the split incentive, are all in line with commitments in the retrofit plan. Good progress has already been made on the implementation of initiatives in this regard. In February, a range of new and reformed SEAI grant schemes were launched to support homeowners to decarbonise their homes, making it easier and more affordable for homeowners to undertake home energy upgrades.

Budget allocations for schemes targeted at those in energy poverty have been significantly increased this year and enhanced supports for approved housing bodies and the private rental sector are also available. The new measures include a new national home energy upgrade scheme providing increased grant levels of up to 50% of the cost of a typical deep retrofit to a BER standard of B2. There is also the establishment of a network of registered one-stop shops to offer a start-to-finish project management service for home energy upgrades including access to financing.

There is a significant increase in the number of free energy upgrades provided to those at risk of energy poverty alongside changes to the operation of the warmer homes scheme. This includes ensuring the scheme prioritises those in the worst performing homes first and opening the scheme for homeowner revisits, thereby allowing them to apply for deeper energy upgrade measures now available under the scheme. A special enhanced grant rate, equivalent to 80% of the typical cost, for attic and cavity wall insulation has also been introduced for all households. This will help to reduce energy use urgently as part of the Government’s response to exceptionally high energy prices.

These new initiatives will be funded by the national development plan financial allocation for residential retrofit of €8 billion to 2030. By providing clarity on the annual allocations for the coming years as well as the total allocation to the end of the decade, the plan gives the retrofit sector the confidence to invest, plan for the long-term and expand. New and expanded upskilling, reskilling and apprenticeship supports will also help to ensure we have the skilled workforce available to deliver on our targets.

A total of €267 million has been allocated for SEAI residential and community retrofit schemes and the solar PV scheme in 2022. This is the highest ever allocation for the schemes. The investment this year will support almost 27,000 home energy upgrades, including more than 8,600 homes to a BER of B2. This is a near doubling of the number of homes delivered to B2 standard in 2021. In addition, as Mr. Armstrong mentioned, €85 million in funding has been provided by the Minister for Housing, Local Government and Heritage for the local authority energy efficiency retrofit programme. This means that of the total Government retrofit budget of €352 million, 58%, or €203 million, will be spent on dedicated energy poverty schemes and local authority retrofits.

The retrofit plan recognises that even with the enhanced grant rates available, many will need to access finance to fund their upgrade. For this reason, the Department is working with the Strategic Banking Corporation of Ireland, the Department of Finance, the SEAI, the European Investment Bank and financial institutions to design a new low-cost loan scheme for retrofit. This scheme will be introduced later this year and will help to address further the affordability issues related to retrofit. This again is in line with the directive proposals. We are working closely with colleagues in the SEAI, the Department of Housing, Local Government and Heritage and other relevant Departments to further build momentum and ensure the building stock is decarbonised in line with our 2050 net zero commitments. We are happy to address any question the committee may have.

Dr. Ciaran Byrne

I thank the committee for the invitation to attend the meeting today to discuss COM (2021) 802 a proposal for a directive of the European Parliament and of the Council on the energy performance of buildings. I am joined by my colleagues Ms Dara Stewart, programme manager for the energy performance of buildings directive and building energy regulations operations, Ms Orla Coyle, programme manager for project support, and Mr. Chris Hughes, energy performance of buildings directive and building energy regulations development.

The SEAI is Ireland's national sustainable energy authority. We work with householders, businesses, communities and Government to create a cleaner energy future. The SEAI is funded by the Government through its parent Department, the Department of the Environment, Climate and Communications, and the Department of Transport. In 2022, our budget allocation is more than €440 million. The SEAI provides expert advice to drive positive change through our analysis, modelling and support for policymaking. We enable direct action through our design and delivery of grant and incentive programmes, and through our capacity-building processes with citizens, communities and private and public sector organisations. In pursuit of our mandate, we collaborate closely with a wide range of stakeholders, including Departments and State agencies.

The energy performance of buildings directive, EPBD, was first published in 2002 and it is the main legislative instrument to promote building energy performance. The EPBD, which has gone through several iterations over the years, sets out requirements for a building energy calculation methodology, including minimum standards for new buildings and works to existing buildings, which are Part L of the building regulations; energy performance certificates, which are the building energy ratings, BERs; nearly zero energy buildings; and a registration and accreditation system for assessors. Together, these requirements have resulted in a positive change of trends in the energy performance of buildings, including a 70% improvement in the energy performance of new domestic buildings and a 60% improvement in the energy performance of new non-domestic buildings compared with 2005.

The concerted action EPBD is a joint initiative between EU member states and the European Commission to enhance the sharing of information and experiences from the national adoption and implementation of this important European legislation. It is organised around meetings between national teams and regularly brings together more than 120 participants from 29 countries. The SEAI is a member of the concerted action management team and is the central team manager responsible for work on nearly zero energy buildings. Ireland is a leader among its European peers in terms of its implementation of the EPBD, with the early introduction of the electronic building energy rating, BER, register and advertising guidelines replicated in other member states. The SEAI is also represented on the energy in buildings and communities programme of the International Energy Agency, IEA, which includes sitting on the building energy codes working group and the Horizon 2020 clean energy transition strategic energy technologies, SET, plan for energy-efficient buildings.

The SEAI administers the BER system in accordance with the European Union energy performance of buildings regulations 2012. The SEAI’s statutory functions include registering assessors to carry out assessments; issuing directions on how assessments are to be carried out by assessors and how certificates are to be issued; specifying the procedures, methodologies and software to be followed by assessors when carrying out assessments; and maintaining the national and assessors registers. As the issuing authority, the SEAI has delivered the systems and processes for administering the BER system, including registered assessors, published BERs and mandatory advertising guidelines for property dealings. The SEAI completed a significant update to the BER advisory report for dwellings, which became available in June 2021. The updated report provides a personalised roadmap for homeowners on how to upgrade their homes to a target of a B2 energy rating or better. This is a key instrument to help achieve the ambitious home energy upgrade targets in the climate action plan. The BER is a requirement for many of the SEAI’s grants schemes.

To support further the implementation of the EPBD, the SEAI has supported the Department of Housing, Local Government and Heritage in the roll-out of the building regulations for new and existing buildings, the development and publication of calculation methodology, and the development of cost-optimal studies; supported the Department of the Environment, Climate and Communications in the publication of the long-term renovation strategy; mobilised investment in renovation through our grant schemes, the introduction of packaged solutions, and the development of the recently launched one-stop shop programme; provided financial and technical support in the development of national standards, including the National Standards Authority of Ireland, NSAI, standards for energy retrofitting of dwellings and heat pumps and the Department of Housing, Local Government and Heritage's standards for energy efficiency in traditional buildings, based on lessons learned from our grant schemes; supported the Department of Housing, Local Government and Heritage in informing large building owners regarding the requirements for building automation and control systems and electric vehicles, EVs; and undertook future-proofing of the forthcoming recast directive through our research development and demonstration programme, which has supported projects in monitoring the performance of technologies in buildings, investigating operational performance of buildings, researching the embodied carbon of buildings, and piloting the building renovation passport.

Since its introduction in 2002, the directive has evolved, and changes to it have been effected at a national level through the EPBD implementation group, which is a collaboration between the SEAI, the Department of Housing, Local Government and Heritage and the Department of the Environment, Climate and Communications. The proposed EPBD revision, published in December 2021, has a twofold objective: to contribute to reducing the greenhouse gas emissions of buildings and final energy consumption by 2030, and to provide a long-term vision for buildings and ensure an adequate contribution to achieving climate neutrality in 2050. The European Commission target is that the community’s building stock will be emitting zero emissions by 2050.

The SEAI is working with our departmental colleagues in preparation for the proposed changes to the directive. These may include the following high-level requirements: all new buildings to be zero emissions from 2027 for public buildings and 2030 for all others; whole life cycle greenhouse gas emissions to be calculated for all new large buildings from 2030; minimum energy standards for all buildings; availability of building renovation passports and smart readiness indicators for buildings; and the reclassification of the BER system.

We thank our colleagues in the Department of the Environment, Climate and Communications and the Department of Housing, Local Government and Heritage for their continued support and close collaboration. I welcome this discussion with the committee and my colleagues and I are happy to answer any questions the members may wish to raise.

Chairman

I thank Dr. Byrne. By way of background for members and those who may be watching these proceedings, regarding this recast directive, on 15 December 2021 the European Commission adopted the latest proposal to revise and recast the energy performance of buildings directive. It is part of a broader overhaul of EU climate and energy legislation, which is referred to as the Fit for 55 package. The principal aim of this package is to deliver on the climate action goal of a minimum reduction of 55% in greenhouse gas emissions by 2030. The main objectives of the recast directive are to reduce substantially greenhouse gas emissions and final energy consumption in the building sector by 2030 and to set a long-term vision for an EU building sector that is climate neutral by 2050. In this respect, the recast directive aims to increase the rate and depth of renovations of energy-efficient buildings, improve information on the energy performance and sustainability of buildings, and guarantee that all new buildings in the EU meet ambitious zero emissions building standards. In that regard, the committee felt this proposal warranted further scrutiny and hence this meeting.

I go to the members now to ask their questions, three of whom are under time constraints to get to other meetings. If other members agree, I will call Deputies Flaherty and O’Donoghue and Senator Fitzpatrick. We will then revert to normal running. Is that agreed? Agreed.

Deputy Joe Flaherty

I thank the Chair and our colleagues for facilitating us and I thank the witnesses for the informative presentations. It is great to see a sea of work under way in this area. It is important and is a key pillar of our programme for Government. I will tee off with some key questions for each of the witnesses. Starting with Dr. Byrne, regarding the BER reclassification, this is being done to bring it in line with European standards. Is this going to be problematic in a context where members of the public are still getting used to the concept of BERs? I ask Dr. Byrne to expand on this point. When he refers to the reclassification of BER, what does he mean?

Dr. Ciaran Byrne

Yes, it is to bring the BER system into line with the recast EPBD directive. I agree with the Deputy regarding the point he made about the public. The BER has existed since 2006 and it is only now, with the climate crisis we are in, that people are really starting to sit up and pay attention to it. This change will have an impact. I ask Mr. Hughes to give a bit more detail about what this means in practical terms for the public.

Mr. Chris Hughes

Regarding the harmonisation of the energy ratings scale, different member states have adopted different approaches. In Ireland, for example, we have ratings of A1, A2 and A3, etc., and this scales down to a G rating in buildings with poor energy efficiency. At the higher end of the scale, buildings will have close to zero energy use. There is close banding in respect of differentiation between buildings. An A1-rated energy-efficient building today will still be energy-efficient in the new classification regarding its low-energy use and use of renewable energy. The recasting, and subsequently having ratings on a scale of A to G, will simplify things for consumers. It will also mean it will be easy to compare building ratings in respect of the classifications used by the different member states.

Deputy Joe Flaherty

What will be the percentages from A to G?

Mr. Chris Hughes

It will still be a scale from A to G, but it will not be differentiated into A1, A2 and A3, etc. Instead, an A rating will refer to zero-emissions buildings, while the poorest-rated buildings will be G. That G rating will include the poorest 15% of the building stock, as measured by energy use. The other bands will then be equally divided across the scale.

Deputy Joe Flaherty

Okay.

Mr. Chris Hughes

This is to make it easier to understand and to take the best lessons learned from each of the member states in applying the harmonisation. Therefore, an A-rated building today will still perform well in future, when the harmonisation is brought in from 2025 onwards.

Deputy Joe Flaherty

I will stick with Mr. Hughes to ask my next question as well. Taking percentages, how many of our homes are now BER rated?

Obviously, people who want to sell their house have to get a BER or if someone gets work done-----

Mr. Chris Hughes

I recall that close to 1 million homes had a BER at one point. Some have expired and the current number is that approximately 56% homes have active BERs. There is a full breakdown of that on the Central Statistics Office, CSO, website. We provide BER data on a regular, quarterly basis to the CSO. It combines those data with census data and scale that up to population. There is a full breakdown by heating system type, county, year of construction and fuel type on the CSO website under its climate and environment section.

Deputy Joe Flaherty

On the issue of assessors and other specialists in this field, there seems to be a major shortage of people in this area. I notice that since local authorities have moved into the area of retrofitting that many companies are specialising in that work to the detriment of the private sector, which are not doing this work. Has the SEAI made any recommendations to Government as to how we can get more people involved in training and apprenticeships? Does the authority have any role in that?

Dr. Ciaran Byrne

I thank the Deputy for the question, which had two parts. One is that there is a shortage in the retrofit construction sector generally and separate from that there is the issue of the BER assessor community.

We have been working closely with our colleagues on assessment needs. Late last year, we had the expert skills group on the future requirements of the green economy which identified that we needed in the region of 17,000 workers in the retrofit sector. We have approximately 6,000 workers in the sector at the moment. Five education training boards, ETBs, have been identified as centres of excellence for training up workers. The Department of Further and Higher Education, Research, Innovation and Science has allocated €17 million this year to double the number of apprentices coming out specialising in retrofit trades and the green economy.

On the BER assessor community, we have a significant number on the BER register at the moment. We have targets to achieve and year-on-year growth in the BER assessor community within the climate action plan. I will invite my colleague, Dara Stewart, who runs that part of the organisation to comment on the BER assessors.

Ms Dara Stewart

There are approximately 630 domestic assessors on the register at the moment. In 2021, we increased the domestic assessor registration by 89, which was an increase of 17%. In the first quarter of 2022, we increased that figure by 28 domestic assessors. We will continue to look at increasing the number of registered assessors over the coming year.

Deputy Joe Flaherty

My apologies for interrupting Ms Stewart. How many of those assessors are active? Are there any who have registered but are not operational or active?

Ms Dara Stewart

I do not have those data. Perhaps my colleague has the figures for that.

Mr. Chris Hughes

All of those assessors have met all of the registration criteria. They are published and available on our public register, comprising approximately 600 assessors. There will be a relatively small number - I estimate it is approximately 50 - who may publish a small number of assessments on an ongoing basis. That is their choice. We have sufficient capacity, however, to scale up quickly and add new assessors. It is a matter for each assessor to decide how much work they take on in meeting the registration requirements on an ongoing basis. We have sufficient capacity in the system.

Deputy Joe Flaherty

I am conscious of the time but I have two quick questions for Mr. Deegan on the one-stop shops. When will they be up and running?

Mr. Robert Deegan

There are five up and running so far and there is a pipeline of 20 or slightly more than that, which are to be done by the end of the year. We were kind of-----

Deputy Joe Flaherty

Will that target be met?

Mr. Robert Deegan

That is the expectation.

Deputy Joe Flaherty

That is grand. My final question, for Mr. Armstrong, is on the local authority retrofit programme. I am aware that local authorities had a concern that there were cost overruns which were not being addressed when the authorities went back to the Department. I do not know if Mr. Paul Benson is with the Department group today but I believe the Department has issued a directive indicating that the amounts allocated for each future piece of retrofit work have been increased but that local authorities will not be reimbursed retrospectively for work that has been done. Does Mr. Armstrong have any update on that issue?

Mr. Seán Armstrong

I can confirm that the grant amount in the most recent circular has been increased from €30,000 to €35,000. With regard to retrospective works, my understanding is that these would have been covered by the previous circular. I can check that and get back to the Deputy on it.

Deputy Joe Flaherty

My understanding is that there is a cost overrun of between €5,000 and €7,000 per house and there is no provision to cover that. In some local authorities we are looking at an overrun in the order of approximately €700,000. Local authority staff and officials will quickly lose the appetite for a scheme if they have to find money for to cover things like that.

Mr. Seán Armstrong

I believe the current circular addresses the retrospective-----

Deputy Joe Flaherty

I would appreciate if Mr. Armstrong could come back to me on that point, just to give me peace of mind.

Chairman

Can the committee get a copy of that circular?

Mr. Seán Armstrong

Yes.

Deputy Richard O'Donoghue

I thank all of the witnesses for coming in and I thank the Chairman for allowing me to make my contribution early. I appreciate what the witnesses are trying to do to address climate change.

I have been in the construction trade all of my life. When this policy on the SEAI grants was launched by the Minister, Deputy Ryan, the figures were prepared in October and based on the retrofit of a house costing €50,000. At that time, a grant of €23,500 was available. Since then there has been a 38% increase in the cost of materials and labour, which means the value of the grant has fallen to €2,500 based on the €50,000 cost when the grants were launched. In other words, the grant has been absorbed by the increase in the cost of materials and labour. The cost then goes back to the home owner again.

Most of the retrofits have been done on a city rather than county basis. This comes down to labour, numbers and business. If I can get ten houses in a row, it will be viable for me to do those houses and it becomes a business. People are entitled to do that. That becomes a problem, however, when it is a one-off retrofit because there are transport and labour costs and the cost of getting labour to the site. It is more costly to retrofit a house in the countryside.

Existing planning permissions allow only one heat energy source, for example, solar panels or a heat pump, to be installed. I am aware that this is changing.

I want people to change to better heated homes but I also want to make it affordable for them. At the moment, speaking as a person in construction, the workforce is not available.

I asked the Minister for Education, Deputy Foley, to introduce a provision for early leavers, those who would like to leave school early. I asked that students in fifth year or transition year doing the leaving certificate applied could doe one base year of an apprenticeship in fifth or sixth year. This would allow them to get on the ladder before they leave school. It would encourage students to stay in school and get a basic education, while giving them the skills they will need when they leave school because they will have already started an apprenticeship. It would also help with the retrofitting of houses into the future.

If I want to have my windows or insulation upgraded, there is a preliminary cost when one goes through the SEAI. Some contractors are coming out and putting in the preliminary costs on each item that they price. It is not based on the whole house. If someone tells a contractor they want external insulation, there will be a preliminary cost involved in that work, which is a base cost on SEAI. If that person comes back to the contractor and says they want the attic done as well, a preliminary cost will also be raised for that work. There should be just one preliminary cost for the whole house. Otherwise, all of the funding goes into preliminary costs.

We need to sell a package. If we can sell a package with one preliminary cost, it will mean we can have the work done cheaper because the preliminary start-up costs on any building cover insurance, scaffolding or whatever else is needed. If we can give a package where people can do the whole retrofit with one preliminary cost, it would mean one part of the house would be done at a cost that would otherwise be eaten up in fees. That is what we need to look at.

There are companies doing one thing at a time. They are telling people to do one thing now and this will help them on their way. Getting as much done as possible with one preliminary cost should be encouraged. That is one issue I want addressed because I have seen this practice everywhere.

I know the companies have been given a rate so they can train up people on BER, which is a good way of doing it and it helps to upskill people, especially younger people who have come out of college and want to do this. It is a good way forward.

The main thing we want is to get people to upgrade the energy in their houses. At the moment, there are still grants available for oil burners through SEAI grants, which I welcome. If someone has an old burner that is not burning efficiently, until they can get their house retrofitted, at least they have something to bring down the emissions within the house.

From the point of view of total tonnes of CO2-equivalent emissions per dwelling over ten years, kerosene is 68 tonnes, air source heat pump is 53 tonnes, wood pellets is 15 tonnes, bioliquid blend is 52 tonnes, bioliquid blend B50K is 40 tonnes and pure bioliquid is 10 tonnes. These are figures on energy ratings that point us to what we can do to improve houses even if they are on different systems.

Outside of the city areas, we have a big problem with ESB because we get knocked out maybe two or three times a year. If people do not have ESB and are completely reliant on heat pumps or solar, how do they heat their house? Something has to run the pumps so how do we address that going forward?

Chairman

There are just 28 seconds left in the slot, which is not sufficient time to answer those questions. The Deputy raises some very pertinent observations about the costs of one-off housing and the impact this can have on infrastructure, transport and so on. We might get to answer those questions if anybody wishes to comment briefly. In fact, I do not think we are going to have time.

Deputy Richard O'Donoghue

I am sorry, Chairman, you let Deputy Flaherty go over by two minutes. I would appreciate it if I could have one minute.

Chairman

I point out to members that if they speak for six and a half minutes, they are only going to leave 30 seconds for the answers. We need to be fair on the witnesses.

Deputy Richard O'Donoghue

I will not be here for the second slot so that saves time.

Chairman

It is the Independents' second slot, not the Deputy’s second slot.

Deputy Richard O'Donoghue

Both of them are mine, actually.

Chairman

Thank you. I will allow a minute.

Mr. Robert Deegan

The Deputy made some very interesting points. I will go through a few of them rapid-fire and we can go through them again at another time, if he likes.

With regard to the grants no longer matching the cost of heating systems, one of the very important initiatives that was introduced in the range of measures that was brought in back in February was about closing the gap between the oil boiler and the heat pump to try to not have people able to use that as an excuse, as much as anything else. We want to be able to convince them that this is the right technology for them but also to make it affordable for them. In terms of the partial grants, that gap has been narrowed.

With regard to the workforce and training, that is going to be a huge challenge and the Deputy has put forward quite a creative solution in terms of the school leavers. I know this is a very important issue for the Minister, Deputy Harris, at the moment in terms of giving school leavers and people later on in their career the options. It is not all about college. One of the important initiatives is that when people go to the CAO website now, it lets them know about the types of options in terms of apprenticeships.

To give specific numbers on the training places that our colleagues in the Department of Further and Higher Education, Research, Innovation and Science are putting on this year, as Mr. Byrne mentioned earlier, there is €17 million under the green skills action programme and that will double the places in upskilling and reskilling to 4,500. There was some very positive news on apprenticeships as well last year.

Deputy Richard O'Donoghue

I would appreciate it if Mr. Deegan could touch on the preliminary costs.

Mr. Robert Deegan

Doing it as a whole-house upgrade is something we are really pushing and that is the whole idea of the one-stop shop scheme. That will stop that kind of recurring preliminary cost-type issue but, at the same time, we want to make sure that people who could not do it all in one go have the option to do it in a step-by-step manner. It is obviously more cost-effective to do it all in one go but the affordability issue that has been mentioned by Deputy Flaherty will be an impediment to some people doing it all in one go. One of the principles of the national retrofit plan is universality. We want to have a solution for every consumer cohort and homeowner type. For that reason, we are still allowing both, but there absolutely is an option for a one-stop shop to come in and do the whole house all in one go, project managed from end to end to ensure quality and take people through the grant and administration process.

Chairman

I thank Mr. Deegan. I will have to interrupt him there. I call Senator Fitzpatrick.

Senator Mary Fitzpatrick

I thank all of the witnesses for attending the committee today. The updating of the directive is something we are all supportive of and renovating existing housing stock is probably the most sustainable way to increase our housing stock. Combined with the €20 billion Housing for All and €8 billion for retrofitting, there is clearly a very strong commitment from the Government to do everything that can be done to increase the energy efficiency of our built environment. That is for all of the obvious reasons, such as warmer homes and more affordable homes, as well as local employment and the environmental benefits. I say all of that just to reinforce how important is the work that the Department and SEAI are doing and how it important it is for our country and society generally. I welcome and support that.

Unfortunately, I will have to leave the meeting as I have another meeting that I have to go to, so no disrespect is intended and I apologise in advance.

I am based in Dublin Central. The social housing retrofitting that has been done by Dublin City Council has made a huge impact in terms of the quality of life of people living in my constituency. The retrofitting of homes in Cabra and other parts of the constituency has changed the quality of people's lives, so it is very welcome. The new developments that are being delivered under Housing for All at Dominick Street, Seán Foster Place, St. Bricins and the net-zero housing are fantastic and are really changing how people are living in the city.

I have two questions, although they are not so much questions for the witnesses but simply to put them on the radar. With the local authorities - Dublin City Council is mine but this would go for the others too - it is very important that while there are issues and we all know there are massive challenges in terms of meeting our housing need and in terms of renovations and our environmental targets, we need to continue to encourage and support them to be ambitious about tackling the existing built housing stock. I am thinking of flats in Dublin Central like those at Henrietta House, Greek Street flats, St. Michan’s and Constitution Hill. They are there and they are built, but far too many of them are not up to standard and they need to be brought up to standard. I would encourage the Department and the SEAI, with the local authorities, and Dublin City Council in particular, to push that agenda and encourage them to be ambitious about it.

Over the last ten years, Dublin City Council did have a bit of a false start. I presume Deputy Flaherty was referring to Longford when he said the local authority there feels it has cost overruns and so it is going to draw back. We cannot allow that to happen with our local authorities. We hope to work with local authorities to ensure they continue to be ambitious. The changes and the improvements that can be delivered are enormous in terms of people's real daily lives but also in a broader sense.

The other issue I want to bring up is private homes. The SEAI is doing great work and I commend it on supporting a number of groups in the city, with citizen activation, citizens taking ownership and educating themselves and sharing their experience, and all of that is very important. It was said there are five one-stop shops operating already, which is great. How long do the witnesses think it is going to take to get to a full complement of one-stop shops? I appreciate our challenges but they might give us some indication.

In terms of the low interest rate loans, how will they work, how will people access them and, most critically, how soon do the witnesses think people will be able to access them? I would appreciate answers to those questions.

Chairman

Is that question to the SEAI?

Senator Mary Fitzpatrick

I think it is.

Dr. Ciaran Byrne

I will answer the question on the one-stop shop and I might pass the other questions to Mr. Deegan. I thank the Senator for her positive comments, which I very much appreciate. I would share her view that it is a very positive thing that we are doing.

In terms of the question asking the full complement of the one-stop shops, we have five registered, we have 15 more in the process and we have a target this year of 20. To give a kind of a non-answer, we do not have a full complement because there is no upper limit. What we want to do is attract as many companies as the market can sustain not just in Dublin but in regionally-based parts of the country as well. We have relatively strict criteria to get in to ensure that we have the quality piece and a company is capable of doing this work. Importantly, although there are five one-stop shops they all work directly with the contractor community. People have the idea that there are only five companies that do this but they all feed into various contractors around the country so all have a national presence. While they might not exactly have direct employees in Cork they will work with contractors who are based in Cork and things like that. From that perspective, the actual number may be unclear.

Senator Mary Fitzpatrick

The number is unrepresentative of the scale of their scope.

Dr. Ciaran Byrne

Exactly. There is no upper limit. We will take as many as we can get in. My colleague, Mr. Deegan, will respond to the question about the loan guarantee scheme.

Mr. Robert Deegan

In terms of when the loan guarantee scheme will become available and what it is about, the Government is working with the Department of Finance, the European Investment Bank, EIB, and the Strategic Banking Corporation of Ireland, SBCI, to put in place a loan guarantee scheme that will reduce the risk for financial institutions to give out loans for retrofit projects which will, in turn, reduce the interest rate that homeowners must pay and make retrofitting more affordable. The scheme is under development and meetings are ongoing. In fact, an EIB delegation came here to attend meetings yesterday and today.

In the coming weeks we will reach the very important milestone of a pre-qualification call whereby financial institutions express an interest in it, give a high-level overview of it and narrow the field a little in terms of the number of financial institutions so we will know how many people are interested, and we can get data from them that will inform the loan guarantee model.

When will the scheme be available on the market? We are aiming for quarter 3 of this year. We think it is going to be a very important initiative for the people who draw down partial grants. We fully accept that the grant schemes are very generous by international standards but if one is doing a very deep retrofit there is still a big financial impediment and an upfront cost barrier. We believe that in future people will supplement a partial grant with some of their savings, and for those who need extra from the loans then they will be available through financial institutions like banks and credit unions.

Senator Mary Fitzpatrick

I thank the witnesses.

Chairman

I will revert to the committee rota, which is Sinn Féin, the Green Party and then the Social Democrats. I invite Deputy Ó Broin from the Sinn Féin Party to commence.

Deputy Eoin Ó Broin

I thank all the witnesses for their presentations. In the first round I will stick to the recast issue and I have specific questions for Mr. Armstrong on his Department's observations from last December. I will ask more general questions if there is a second round of questions.

One of my concerns about the observations made by the Department of Housing, Local Government and Heritage is that throughout the Department supports the intentions of the review. The Department then seeks a whole series of exemptions or exceptionalities which, if they are accepted at an EU level, undermine some of the intentions. I am keen to give Mr. Armstrong an opportunity to clarify the logic, rationale and, in some cases, the criteria against which the Department seeks some of these flexibilities. I have five observations and I will go trough them quickly to give him as much time as possible to respond.

I refer to the observation on Article 2(2)(O), emissions buildings. Again, the Department says it supports the objective but states "where technically feasible" at the end of the section. Please outline what "where technically feasible" means. In practical terms who determines or against what criteria would technical feasibility be decided? I ask so that we can fully understand the matter.

On Article 2(19), deep renovation, the Department is not just looking for "where technically feasible" but also "economically and functionally feasible", which is an even broader potential set of opt-outs for a very important provision. Please outline what is meant by "economically and functionally feasible" and the criteria used? When determining whether something is economically feasible is an assessment done on the economic feasibility of not doing it or the longer term economic cost, and is one married against the other?

With respect to Article 2(23), there is a series of suggested exemptions with respect to whole-of-lifecycle emissions. My reading of the comment, and I could have misinterpreted it, is that it gives more priority to the operational emissions rather than the embodied emissions because the operational ones are a larger component. The problem as we know, given what Mr. Armstrong outlined at the start about the increase in residential building, is embodied carbon will become a much larger feature of our overall carbon emissions and at present it is 10% across all categories. Have I misinterpreted or has he given greater privilege to the operational over the embodied? If so, why? If not, and I have misunderstood, will he please clarify?

In terms of observations on Article 7(12), there is a series of exemption requests on dates, so on 2027 and 2030, where buildings are already designed or commencements have started. Is there a concern that if one does not try, even at that late stage, to apply some of the higher standards that they will have to be done anyway? I ask as it is more expensive to retrofit them after the fact in five, ten or 15 years time than introduce at least some level of inconvenience for builders and developers at that point.

I am greatly concerned about Article 9(1) in respect of minimum energy performance standards. There is a general request made for additional flexibility for the private rental sector. We know that in many cases the energy efficiency of the private rental sector is very low. We know that is where we have a heavy concentration of lower-income families with higher levels of energy poverty. Therefore, should we be encouraging too much flexibility in the private rental sector? Clearly, we do not want to do anything that further disrupts supply but if the trade-off is poor energy efficiency and, therefore, more negative impacts over the longer term on fuel poverty then that is not a good trade-off. Is there not a better way to deal with the challenge?

Mr. Seán Armstrong

The Department is very supportive of the EPBD. Ireland has been exemplary in its implementation of the EPBD over the last 20 years. We have a lot of experience in transposing the legislation, writing the technical guidance and setting performance standards that work.

This is a draft EPBD. When we review the articles we will examine them so that we can implement them in the most effective way to achieve the greatest level of ambition possible. There is absolutely no intent to undermine or detract from the ambition of the EPBD. Any observations are totally about implementing it in the most effective way. I reiterate that this is a draft directive. The Commission has asked member states for their feedback and we give our feedback in the spirit of effective implementation.

With regard to the specific issues that have been raised, the first concerned Article 2(2) and zero-emission buildings. There is a provision in Article 2(2) that a renewable energy community scheme will meet the renewables requirement for on-site electricity. We are very supportive of renewable energy community schemes. From the point of view of implementing that at a building level, when one applies the calculation methodology it is impossible to know whether the electricity used in the building has come from a renewable energy community scheme or a fossil-fuel generated scheme.

In terms of a solution, the following was introduced a little over 15 years ago in the UK whereby renewable energy community schemes would be recognised. The only way that it was physically possible to know that the electricity came from a renewable energy scheme was to put in separate lines direct from the renewable energy community scheme to the building. We are supportive and want that to happen. As we are not sure how this can physically happen we have suggested the insertion of the phrase "where technically feasible" in order to provide for it but not to require it from member states because we would have no way to implement it if it was implemented in the form that has been proposed.

With regard to deep retrofit, as the Deputy will be very well aware, the housing stock is complex and diverse and has been there for hundreds of years. We have traditional buildings, buildings of architectural value, buildings that were built prior to regulations and different methods of construction. The building physics that apply the operation of those buildings varies depending on when they were constructed. Where we have traditional buildings that were built before the 1940s, and some built after that period, the transfer of moisture is important. The walls of those buildings need to be allowed to breathe. If we set performance requirements that require people to place modern insulation on the external or internal surface of those buildings, that can prevent the walls from breathing which can result in condensation, mould growth and health damage to the people who occupy those buildings. The directive has not been nuanced enough to take account of that.

The term "where technically functional and economically feasible" came from the 2010 directive. It is a term we took from the 2010 directive and used in the past with regard to major renovations. We suggested to the Commission that because there are technical risks in traditional buildings, when deep retrofits are being carried out we need to ensure they are technical, economically and functionally feasible. The Commission produces recommendations on what constitutes technically, economically and functionally feasible and we refer to those guidelines. In the 2010 directive, we found they were not detailed enough and we have had to go further and provide more detailed definitions in the technical guidance documents. Alternatively, we will carry out an assessment as part of the development of the technical guidance documents, determine what is and is not a safe level for a building and provide that in the technical guidance document. That is how we work with the directive to aid its implementation. The objective is to achieve the most effective implementation of the requirements and bring all of the dwellings to the most ambitious, safe and practical level they can achieve.

Chairman

We have spent nearly ten minutes on this. We can come back to answer the question on the PRS section as well.

Mr. Seán Armstrong

It is a similar argument. There is a technical reason behind each of the recommendations. We are happy to go through those again.

Deputy Brian Leddin

It seems like it was only a couple of weeks ago that Dr. Byrne and I spoke at a meeting of the Committee on Environment and Climate Action. The SEAI was thorough in its response to questions on the retrofitting grant. Dr. Byrne instilled a lot of confidence in members that it is being rolled out very well. It is important we have that confidence.

I do not know whether the witnesses watched or read the reports on our meeting earlier this week with the Irish Green Building Council and Dr. Kinnane from UCD, who I understand the SEAI has commissioned to do some research. Ms Josefina Lindblom of the Commission spoke to the committee on Tuesday. It was a very interesting three-hour session of good back and forth on a subject that was quite new to many of us. The reporting of it was quite unfair. I would not say what was reported was misreported, but the reports were perhaps incomplete and somewhat unbalanced. It would leave people with the impression the retrofit plan was not going well and there was not good auditing when in fact there is. The very reason Dr. Kinnane made these points was he had been commissioned by the SEAI in a very appropriate way to find out where the gaps are and to continuously improve the system.

Deputy Ó Broin referred to a big piece of the EPBD that is coming down the tracks, namely the life cycle cost analysis and the assess and report aspect. I understand 2030 is the year it will be introduced. I have a view that is something we should try to get ahead of and not wait. As Mr. Armstrong said, Ireland is an exemplar in the roll-out and implementation of the original EPBD and should get ahead of the recasting of the EPBD as soon as possible. Other countries are doing that.

In a committee meeting, there was frequent mention of the value of existing buildings, the importance of renovations and understanding the embodied carbon in existing buildings, some of which are 30 years old while others are 200 years old. There is a vast stock of buildings that have embodied carbon in them. Everybody here would agree we should do everything we can to address that. However, there seems to be a gap in our regulatory regime. It is perhaps easy to demolish buildings and build new ones on greenfield sites. It is a planning question. Is the Department considering regulatory steps to reduce the number of demolitions and building from scratch in the country? It is something we can address sooner rather than later. We do not need to wait to find out what the embodied carbon in all of these buildings is. We know this is the right thing to do. I ask Mr. Armstrong to be as brief as he can. I have one other question.

Mr. Seán Armstrong

It is broader than just embodied carbon. It is about the reuse of town centres and compact urban growth. As the committee will be aware, compact urban growth is a key objective of Housing for All and the national planning framework. The Department has specific actions in Housing for All to address vacant housing. There is a new local authority led programme to help local authorities buy or purchase vacant homes that can then be sold and ensure homes do not lie vacant. The Croí Cónaithe towns initiative will be delivered by local authorities for the provision of 2,000 serviced sites attract people to build-----

Deputy Brian Leddin

Time is limited. When somebody applies to a local authority for planning and states they want to knock down a building and build a new one, that is a problem. If we are not valuing the embodied carbon that is in those buildings, it will be easy for a local authority to allow a building to be knocked down and the construction of a new building to proceed. Are we considering that? We should begin to value the embodied carbon in existing buildings. There are all kinds of good reasons to do so, including heritage as well as climate. Is the Department considering any steps to introduce regulations to prevent unnecessary demolition?

Mr. Seán Armstrong

With regard to embodied carbon, the embodied carbon calculation methodologies are the main initiative with regard to addressing embodied carbon. There are working groups working on that and a series of actions in the climate action plan to address embodied carbon in buildings and put in place frameworks to calculate embodied carbon. Initially, these frameworks normally target new buildings, but they can equally be applied to existing buildings. That would have to be developed as part of those frameworks and methodologies. It would be a matter of capturing it in the proposed framework for embodied carbon.

Deputy Brian Leddin

I have a question on confidence in the system, which we always need to be on top of. I refer to quality control on the BER and assessment side and the renovation and deep retrofitting side. Are there mechanisms and systems to ensure they are in place? The reports following our recent committee meeting dented confidence.

Dr. Ciaran Byrne

I thank the Deputy for his kind comments. We would share his take on the situation. We believe there is quality and confidence in the system. At the start of the process, there is a code of practice in place. Along with the SEAI, we wrote S.R. 54, which is the standard for retrofitting in Ireland. Before you get anywhere near a building, we have codified quality standards. We also work directly and closely with contractors to ensure they are suitably qualified. For example, to participate in the solar PV scheme, the contractor must be a registered electrical installer and must also undertake a solar PV installation design course. Before we go out to the market, we are assessing the contractors. In the context of the newly launched one-stop shop services, OSSS, some of the criticism might, perhaps, have been that we were slow, but that was because we were really focusing on the quality and the capabilities to deliver at the right level. We then move to doing the work, the other side of which involves looking at the assurances afterwards. We have a comprehensive inspection process within the SEAI. Last year, for example, we undertook over 4,000 inspections on buildings. Our focus is not so much on the after-effects, but on building confidence from the start so that we can minimise at the other end. We are very assured that we have the systems in place.

I will counter and make the point that given the scale of what we are doing, things will go wrong. That is part of life, but we have the systems and structures in place.

Chairman

I thank Dr. Byrne. The next speaker is Deputy Cian O'Callaghan.

Deputy Cian O'Callaghan

I agree with the point that it is far too easy to demolish and build from scratch. One of the difficulties with Housing for All is its commitment to exempt construction demolition from landfill waste levies. From an environmental point of view and in terms of the embodied carbon, that is a major mistake. It is hugely problematic.

I thank the witnesses for being here and for their contributions. I want to follow up with the SEAI on some of the issues raised by Deputy Leddin, including the 4,000 inspections on buildings. In terms of the works taking place, what percentage does that represent? For example, is that a once-off inspection and how thorough is the inspection?

Dr. Ciaran Byrne

Typically, it is a post-works inspection prior to a grant payment. In many cases, it is a once-off inspection, but where issues are identified, the contractor may be required to do re-works that may trigger a follow-up inspection.

Deputy Cian O'Callaghan

Is there an inspection of all buildings?

Dr. Ciaran Byrne

Not every building. We completed in the region of 15,000 homes last year. The level of inspection depends on the number of applications on the particular grant scheme. New contractors under the scheme would be subject to higher levels of inspection, although we bring them along with us in terms of training them in regard to the way we do things. For pretty much all of our main schemes, we have a suite of highly experienced contractors who have been working on those schemes for many years. They would be inspected but not very often.

Deputy Cian O'Callaghan

It is risk-based inspection, which makes sense. In terms of the contribution from Dr. Oliver Kinnane from the school of architecture, planning and environmental policy in University College Dublin, UCD, to the Joint Committee on Environment and Climate Action this week and those findings, when one looks at what has happened in Ireland in terms of building control, building defects and the figure of possibly €5 billion to €6 billion that the State will have to pay out to remedy pyrite, mica, fire safety defects and other building defects, we do not, unfortunately, have a good track record in building works regulation and that has been hugely costly for individuals and the general public. I appreciate that the SEAI sought that input. Is it looking at further independent evaluation? In what way is it dealing with those findings?

Dr. Ciaran Byrne

I will ask my colleague, Ms Coyle, who is very much involved in that area, to respond.

Ms Orla Coyle

We have a scheme under which we have a research and development call every year. We work with various Departments, including the Departments of Housing, Local Government and Heritage and the Environment, Climate and Communications to identify projects that we want to research. This particular call was around the operational performance of these buildings. That study looked at a very small sample in terms of the fabric. As part of that call, a request was made for more funding to do bigger research projects. We recently issued the call for this year's funding. We seek this information in order that we can ask the right questions. We want these buildings to perform. We feed in the research information.

Another comment that was made was around the performance of heat pumps. We have learned from that research and fed it into our grant schemes, in that we make the contractors do correct designs in terms of their buildings. Part of that study was around the weather data that are used for determining the performance of the heat pumps. We adjust the performance of the heat pump based on Irish weather data in the BER system. We have already implemented some of that study and we are either working on or doing additional research on other parts of it and feeding that in to the methodologies and calculations.

Deputy Cian O'Callaghan

A study of a wider sample would be really important in terms of the need for us to get this right and the huge investment that is going into it as well. My next question is for the Department of Housing, Local Government and Heritage representatives. I appreciate that they are from the climate action policy unit and, as such, building control may not be their main area. All of this relates to building control issues. Is the Department looking at making improvements in the regulatory framework in terms of all building works, including retrofitting, the statute of limitations and company law, to ensure that directors of companies found to be responsible for serious breaches can be held to account, and the establishment of a national building control authority along the lines of the Food Safety Authority of Ireland? What is the Department's view on these matters? We have a disastrous track record in this area. We cannot assume that because there is lots of good will and good work is being done, as we have heard, things will definitely be different with retrofitting.

Mr. Seán Armstrong

We are the climate action policy unit, but we are also the construction industry regulation unit. We are currently bringing through the Regulation of Providers of Building Works and Building Control (Amendment) Bill 2022 so we are dealing with similar questions at another forum. A lot of these issues would have been raised there. There is an ongoing reform programme of building control. As the Deputy will be aware, we are bringing through the Regulation of Providers of Building Works and Building Control (Amendment) Bill 2022 at the moment. While the categories of registration have yet to be defined, it is intended that retrofit will be one of those categories. The Minister has committed to consideration being given to the establishment of a national building standards regulator.

Deputy Cian O'Callaghan

Can Mr. Armstrong provide us with a timeline in that regard?

Mr. Seán Armstrong

I do not have the detail other than to say that a commitment has been given and it is being examined.

Deputy Cian O'Callaghan

Is the model of the Food Safety Authority of Ireland being looked at in regard to the national building control authority?

Mr. Seán Armstrong

I understand that best practice in Ireland and internationally is being looked at and that the model would be developed based on the best practice examples that are reviewed.

Deputy Cian O'Callaghan

I thank Mr. Armstrong.

Chairman

The next speaker is Deputy Higgins.

Deputy Emer Higgins

I apologise for my late attendance but I was attending another committee meeting. As much as politicians would love to be in two places at once, we have not yet mastered it. I have read all of the opening statements. I thank all of the witnesses for their presence and all of the information they have provided. I have a number of questions, which I will get straight to as I have only seven minutes in which to put questions and get answers.

My first question is for Mr. Deegan. In regard to the skills shortage, which is already an issue in terms of the one-stop shop and the SEAI grant, what plans are in place to overcome it? I was encouraged to hear in Mr. Deegan's opening statement that this year we are seeking to do 27,000 more home energy upgrades. Are we on track in that regard? The new low-cost loan scheme for retrofitting is welcome. How will it work for older people who, from a loan perspective, are not attractive candidates for the banks? Have we factored that in?

My next question is to Mr. Armstrong. In regard to electric vehicle, or EV, charging points and the infrastructure around them, an issue that comes up again and again is the need for EV charging infrastructure at apartment blocks from a planning perspective but also from a retrospective perspective in regard to existing apartment blocks. How do we incentivise the delivery of EV charging points to make the switch to electric possible for apartment dwellers?

From 2025, the minimum BER for rented properties comes with the caveat "where feasible". That is how I feel about it as well. I would hate to slow down progress in the creation of new rental properties for people. I am thinking in particular of homes that may become available under the fair deal scheme. Where older people are availing of the scheme, the Government has announced plans to reduce the amount of rental income that will go towards their fair deal care in a bid to incentivise more older people to put their homes up for rent, but I am conscious that many of these homes may not be BER fit for purpose. I noted in Dr. Byrne's opening statement the mention of a reclassification of the BER. Will he elaborate?

I hope I have left the witnesses enough time.

Mr. Robert Deegan

I thank the Deputy for her questions. She raised three matters, the first of which was the skills shortage. The national retrofit plan addresses skills and standards in the workforce, which also speaks to Deputy O'Callaghan's point. One of the first actions under that pillar was quantifying the number of people that we needed. There are approximately 4,000 people in the retrofit workforce at the moment, but we need to increase that number rapidly to 17,000 within two or three years. The allocation provided to the Department of Further and Higher Education, Research, Innovation and Science for upskilling, reskilling and apprenticeships will be crucial. There is a near doubling of places to 4,500 for upskilling and reskilling. This will mean that new entrants and existing workers in the sector can train up quickly. People will not necessarily have to go through four-year apprenticeships.

Regarding the loan scheme, particularly as it relates to older people, loans will be provided through financial institutions, which will need to follow their due diligence processes just as they would for any other loan. That is an important point to make. Regarding universality and ensuring that we have supports for all those who need them, a high percentage of older people are entitled to some welfare payments that in turn entitle them to free upgrades under the warmer homes scheme. There may be a requirement for other options. The health benefits that accrue from retrofits would be beneficial for older people and we are keen to keep people out of nursing care and in their homes in their own communities for as long as possible. The approach that we are taking to the loan scheme is about getting it up and running and operating through financial institutions later this year. We hope to make it a more affordable proposition for people. The terms will not be defined, so if the older person believes that he or she can repay a loan within a shorter period that was also suitable for the bank's purposes, that would be possible.

There will be a significant increase in output this year. Does my colleague, Dr. Byrne, wish to comment on that?

Dr. Ciaran Byrne

Our figure for this year is 27,000 homes. As of this morning, we have received just under 13,000 applications, which is 65% of last year's total of just under 20,000 applications. There is a lag between application and delivery, but we have delivered just under 5,000 homes across all of the SEAI's schemes, not just the OSSS. We are on track, but that is always a relative discussion. We could be doing something different in a week's time, but we are making good progress.

The Deputy's final question was on BER classifications. I might ask my colleague, Mr. Hughes, to address that.

Mr. Chris Hughes

There will be a harmonisation of the BER scheme to simplify the scale. Currently, it goes from A1, A2 and A3 all the way to G. It will be simplified to run from A to G. A high-performance building today will still be a high-performance building in the future. A zero-emissions building will be A and G will be the 15% of poor-rated buildings, with an equal division across the other classifications.

Mr. Seán Armstrong

I will answer the question on EV charging points. In 2021, we introduced new regulations requiring residential apartment buildings with more than ten parking spaces to install EV charging infrastructure for each parking space. This requirement also applies to major renovations to apartment buildings with more than ten parking spaces. It is planned to extend it this year to all dwellings with a parking space.

Deputy Emer Higgins

Are there plans for existing-----

Mr. Seán Armstrong

Yes. The Department of Transport is the lead Department on the existing EV infrastructure charging strategy. An EV infrastructure charging strategy is out for consultation at the moment. According to an update from the Department of Transport in respect of existing apartment blocks, work is being progressed to expand the EV home charger grant to include shared parking in apartment blocks and similar developments. The Department of Transport is working closely with the SEAI and expects the scheme for apartments to open in the near future.

Chairman

Next is Deputy Gould, followed by me, after which we will move on to the third round. If anyone wishes to contribute again on the third round, he or she might indicate.

Deputy Thomas Gould

In terms of energy efficiency, an issue is arising in my constituency with the retrofitting of local authority and private houses. Cork City Council has approximately 11,000 social housing units. Those units where my father lives - Harbour View Road in Knocknaheeny - were retrofitted two years ago. The units at Allen Square and Wolfe Tone Street in my constituency were retrofitted over the past four years. It has been a tremendous success. The people living in those units have told me that their energy bills have reduced by 50%. At Allen Square, they have solar panels on their roofs, so they have hot water whenever they need it. At Mary Aikenhead Place, though, which is the terrace just beyond it, there are similar council properties built at a similar time and they have not been retrofitted because there is no money to do so. Residents there are paying double for electricity, their houses are cold and damp and they do not have hot water.

Will there be a set standard for the retrofitting of local authority housing and will that transfer over to private homes? I have been contacted by a retired couple living in Fairhill who applied for a grant to retrofit their privately owned house. They could not get the retrofit done because there was a shortfall of €8,000, but the person on the other side of the road - both are corner terraced houses that were originally local authority housing before being purchased by the tenants - could afford the €8,000 to retrofit and insulate. This shows the inadequacies. We have people who want to do the right thing - retrofit, ensure energy efficiency and reduce their energy usage and bills - but the gap for many is unaffordable.

Will all local authorities be expected to carry out retrofitting to a set standard?

Mr. Seán Armstrong

I am happy to take that question. In the circulars from last year and this year on the energy efficiency retrofit programme for local authority dwellings, the BER standard is being set at B2. The grant funding provided is based on achieving that B2. The target is to retrofit 40% of suitable local authority dwellings that are not at B2 standard by 2030.

Deputy Thomas Gould

Regarding that figure of 40%, and without being too political, carbon tax will increase on 1 May. Most of the people living at Mary Aikenhead Place, Noonan Road and the like are in properties that are 70, 80 or 90 years old, freezing and damp.

The carbon tax is to be imposed on these people on 1 May. We are looking at achieving 40% retrofitting of local authority housing so with Cork City Council, that would be 4,500 houses. What happens to the other 6,500 houses? Will the people in them have to pay the tax for years? Retrofitting is a very good initiative and we all agree on that. The issue is the timeline and it must be done more quickly.

I know much of the private work is contracted and even much of the local authority work is given to contractors. This needs to be brought back to local authorities with designated teams funded by central government to carry out this work and speed up the process. Is a 40% figure for 2030 realistic or is it good enough for what we are trying to accomplish when it comes to trying to reduce energy usage? We are trying to save the planet and one minute we have people telling us we are not doing enough but this plan is not ambitious enough for what we must achieve. Does Mr. Armstrong agree or disagree?

Mr. Seán Armstrong

I disagree. There is ambition in this plan. When we speak of local authority housing and the 40% figure, there are 136,000 local authority dwellings in total. From 2013 to the end of 2021, 75,000 of those units had some level of shallow retrofitting.

Deputy Thomas Gould

I will stop Mr. Armstrong on that point. I raised the question with the Minister in the Chamber and he gave me that figure. Some of those cases were just the provision of attic insulation. The windows in the house may have been single-glazed aluminium and we might have been better taking the roof off the house. That is if we do not do the windows or insulate the walls, either with external or pumped insulation. The Minister, Deputy Eamon Ryan, told me the figures and I said it was not good enough to fit one door or window in a house that is cold, damp and 80 years old. It is a waste of time if we do not retrofit the houses properly.

This is not a criticism of the Department because what it is doing is really important. I just want the work done properly and a complete retrofit is the way forward. I did not mean to interrupt but the Minister gave that reply about a month ago and I said the same to him. Where I come from in Gurranabraher the houses are 80 or 90 years old. That is in Farranree, Churchfield and Noonan's Road. These people do not have years to be waiting and their houses are cold now.

Mr. Seán Armstrong

The figure is just to give the Deputy the full context and indicate the work done in the period from 2013 to the end of 2021. The more advanced standard was introduced in 2021 and that is a B2 BER rating. The target is for 40% of dwellings to achieve that more advanced standard. Of those 136,000, because they are new dwellings built to advanced building regulations since 2008, 36,000 are already at a B2 level. We have a further 36,000 that we want to bring to a B2 level by 2030. We have 75,000 units where we have done shallow retrofits. That is how we describe it and it typically comprises attic insulation or cavity wall insulation. All dwellings will see some level of retrofit. The newer dwellings and the 40% that will have been retrofitted will be at the B2 level or better in 2030.

Deputy Thomas Gould

There are 136,000 social houses and 36,000 are now at the B2 standard, which is great. That means there are 100,000 units not at that standard. If we are looking to get 36,000 of those done between now and 2030, which is eight years away, there will be 64,000 houses that will not be retrofitted in the next eight years. We have been speaking about climate change and global warming. We are talking about reducing energy usage. The State owns those 64,000 properties that will not be touched for at least eight years and maybe longer.

Mr. Seán Armstrong

It is not that they will not be touched.

Deputy Thomas Gould

They will not be up to standard.

Mr. Seán Armstrong

They will not be at the B2 standard. It comes down to funding and the availability of funding in achieving the remainder of those.

Deputy Thomas Gould

I mentioned private contractors earlier. Some people may be able to afford retrofitting but others will not. There will be a two-tier system where the people with funding and resources will see reduced energy costs and warmer homes but people with smaller incomes and who are more vulnerable will have colder homes and higher energy bills. That is counter-intuitive. We would probably drive people on the edge of poverty into poverty.

I have another point.

Chairman

The Deputy is over his time.

Deputy Thomas Gould

Thank you. I appreciate the opportunity.

Chairman

Deputy Gould has made a very important point about time and funding. The climate action ambition we have now should have started more earnestly ten or 20 years ago. We have a plan in place now with a commitment and funding. It is important not to lose sight of that. I am sure future Governments will commit to the aim as well and everybody will work together to ensure we achieve the target collectively. I have a couple of questions. I did not put Deputy Gould on a timer but I gave him quite a bit of time.

Deputy Thomas Gould

I would say I only used about three minutes.

Chairman

The Deputy got up to approximately 11 minutes and managed to name every street in north Cork, which is quite impressive.

I want to bring this back to why we are doing this. When we speak about energy efficiency in buildings, we concentrate on emissions and energy usage. We quantify the energy and its cost. Much of the time we do not focus the discussion on the benefits that accrue to people who live in energy-efficient buildings, including health benefits and a better quality of life. There is also the creation of a building stock for future generations to purchase and for people to grow up in that would be sustainable and affordable. It would ensure future generations could have healthy and clean homes in which to live. It is something we lose in this debate some of the time. We concentrate a great deal on science and engineering but there are people behind this as well.

To follow up a point Deputy Gould started, we know good targets are being met in the warmer homes scheme and good targets will be met in the local authority retrofitting. I assume we are dealing with people in the lowest quality housing first and the people most at risk of fuel poverty. Mr. Armstrong mentioned a figure of 60,000 and not all of those would be of a poor energy standard because they may have been built recently. It is important to recognise that.

I know from frequent discussions that some people think the grant system is great but where will they get €24,000 or €25,000 to do the job? Has the Department produced a ready reckoner so people can see what is required for a four-bedroom or three-bedroom semi-detached house or a detached house? It would indicate the average energy usage for the house every year, the annual cost, and with a 20-year low-cost loan to get the work done, it would work out the weekly or monthly cost or benefit. It would also take in health and quality of life benefits. Everybody wants a better future and quality of life and health for their children who are being brought up in these houses. Has that been done? Perhaps it is a question for the SEAI witnesses.

Dr. Ciaran Byrne

We will take a stab at it at any rate. To be honest, we have not done it in that way. There are people out there like BERWOW, which looks at BER calculations. It is a really good point and suggestion but one of our real difficulties is that there is an objective and amorphous thing - a building - and there are also people, and how people use the building can vary wildly as well. It is therefore quite difficult to get into that ready reckoner space. Perhaps Ms Coyle will comment.

Ms Orla Coyle

We have done a number of research projects and this feeds back into some of the discussion we had earlier. One of the projects concerned operational energy and how people operate their buildings. The BER rating is a comparative asset rating and it compares like-for-like buildings, with similar occupancy or profiles in terms of temperatures. Some of the studies indicate that different people operate their buildings differently. There could be one teenager in a house, for example, or there could be five teenagers in that house and the energy use would be different.

We have just launched a new tool on the SEAI website. We have also done recent projects on internal environmental quality, the impact of retrofitting buildings and the benefits of that. The tool on our website takes many of the learnings from that research. It is available. One can go into the tool and state that one's home currently has a D rating, for example, or the tool will make an assumption in respect of a BER rating. It will show the benefit in terms of one's internal environment and the comfort and air quality within one's home. One can input the number of occupants in the home. It will inform people and provide running costs. That is all based on some of the research projects we mentioned earlier. It will provide a comparison between a D-rated home and a B2-rated one, for example. It will outline that if one retrofits one's home, comfort and energy use will be improved, bills will be reduced and so on.

Chairman

An important point is that one of the biggest barriers for those seeking an energy retrofit of their home can be finding information in respect of what should be done first and what will give the best return. Should one clad the walls, insulate the attic or replace the windows? The one-stop shops provide great information for such people. What impact will this have on people living in the house during the construction stage? Will they have to move out? I presume that if one is doing external cladding, roof insulation, heat pumps, solar panels or windows, there is no necessity to move out of the house. If a house has suspended timber floors, is there a requirement to do anything with the voids underneath to get up to an A2 rating?

Dr. Ciaran Byrne

I will pass that on to my colleague, Ms Coyle. It is a technical question.

Ms Orla Coyle

There is not necessarily any such requirement. One may wish to reduce draughts but one does not necessarily have to retrofit the timber floor to achieve an A-rated home. One could achieve the rating through external wall insulation, a heat pump and so on.

Chairman

It is important to get that information out that there is no need to move out of the house. It is not like a big renovation or extension for which people may have to move out.

Dr. Ciaran Byrne

That is a critical point because we have been asked about moving out. It is a bit of a misnomer. We should be clear that some people match the energy upgrading with an overall renovation of the home and that is a separate category. One should not have to move out of the home to get to a B2 rating.

Chairman

As regards realising the energy consumption of a building, the three committee members in the room are very interested in energy and all aspects thereof and could probably identify the running costs of a piece of household equipment. Many people are not aware of that. They can be surprised and shocked by the energy consumption of certain household appliances and how much energy those appliances use. Our guests are probably familiar with energy monitors, which were brought out some years ago. They are very easy to fit. A device that looks like a clothes peg goes onto the internal cable and that will give a readout of the energy used in kilowatts, carbon emissions and, most important for many people, in cent or euro per minute or hour. That is probably one of the best things we could roll out to people so they can actually see and realise how much an electric shower, dishwasher or washing machine costs to run. Does SEAI provide that? Is it something it has ever promoted or launched? It relates to energy awareness.

Dr. Ciaran Byrne

Through our sustainable energy communities, we had programmes such as Watt Watchers that did exactly what the Chairman described and highlighted the simple steps that can be taken to reduce energy use in the home. We previously gave out energy monitors as promotional material. Obviously, we are in the middle of an energy crisis and we are considering what response we can make to improve the general knowledge of the issue referred to by the Chairman, that is, the energy usage of various household appliances and what they actually cost to use. We are looking to roll out further information towards sustainable energy communities in terms of bringing that awareness to people. I understand an information campaign will start today or tomorrow. I know people are sometimes pilloried with messages to take shorter showers and things like that, but showers do actually use a hell of a lot of energy. Even the energy consumption resulting from leaving televisions and chargers plugged in overnight, although small, does add up.

Chairman

Nothing speaks louder than watching the cost of energy usage add up on a screen in cent and euro while you are sitting at home and looking at it. It makes people ask why 3 kWh of electricity is being used in the house at that moment and wonder what has been left on or who is using it. The information is there for people rather than lecturing them on what the costs are or telling them not to do certain things. I am out of time but I will have more questions.

Deputy Eoin Ó Broin

I ask Mr. Armstrong to return to the three questions we did not have time for in the previous round. To recap quickly, one of the questions related to the Department's observation on Article 2(23). Was there more of a focus on the operational rather than embodied carbon, if I understood it right? If so, was that a weakness?

My second question was in respect of the Department's comments on Article 7 and the various exemptions for buildings pre-2027 and -2030. Ultimately, we will have to go back to those buildings at some stage. They might not be captured now.

Probably the most important of the three questions relates to the observation of the Department on Article 9, the minimum energy performance standards, MEPS, and the impact on rental supply. I have a particular concern in this regard. Deputy Higgins made a good point in the sense that we want to make sure we have adequate supply but we also want to make sure it is of an adequate standard. I ask Mr. Armstrong to speak more to the concern that was mentioned in respect of rental accommodation.

If I may throw in an additional question for Mr. Armstrong and Mr. Deegan that kind of ties in nicely, the committee is holding several separate hearings on the issue of embodied carbon, particularly with a view to future increased public and private residential construction and in the context of the sectoral emissions reductions targets that will be legally binding from this year on. What preparations are being undertaken in the Departments of Mr. Armstrong and Mr. Deegan specifically in respect of how we ensure our public housing output this year, next year and thereafter, but also in how we regulate and encourage the private sector to start reducing its embodied carbon? For good reason, all of our conversations to date have tended to focus on the operation and energy efficiency, and that is really good. However, we also know from research the Irish Green Building Council produced recently that even as we get our operational emissions in the built environment down, we will see significant increases in embodied carbon across the built environment if we do not grasp the nettle quickly in terms of what we can do there. If both Departments can speak to that at the end, that would be great. The SEAI got off lightly today from me.

Mr. Seán Armstrong

Article 2(23) relates to the whole life cycle of greenhouse gas emissions. There is no intention to emphasise one over the other. We are aware that quite often on the databases that are currently available the certification for the embodied carbon in construction products is grid to gate because that includes the manufacturer of the product where the embodied carbon is. The whole life cycle, however, means that the embodied emissions are added to the operational emissions to get the total emissions. Obviously, the------

Deputy Eoin Ó Broin

The Department is not suggesting carving out some of the manufactured related emissions separately. Those will still be fully calculated.

Mr. Seán Armstrong

It will be a matter for the directive and how we do that calculation. I do not think it is-----

Deputy Eoin Ó Broin

I am asking about the view of the Department.

Mr. Seán Armstrong

We are working on it. The directive states that the certificate should display the whole life greenhouse gas emissions. We will be happy to work with the directive. We want to implement it in the most effective way. That observation was made because our understanding is that most embodied carbon assessments are grid to gate at the moment rather than cradle to end of life. It is just to give that option if in the context of what is already certified.

As regards buildings in 2027 and 2030, this is the transition arrangement that applies to every new building that is being constructed. If a new building is being designed and constructed and the walls have been built and insulated and the renewables on the roof have been designed and purchased but then a regulation comes out, it is impractical and cost-ineffective and has significant schedule impacts to go back and redesign the building and make all those adjustments to achieve the new standard. There has to be a transition arrangement for certain buildings.

It has to apply to buildings which are commencing construction, buildings in mid-construction and buildings which are close to completion. One has to take account that they have been built at the old standard and it is not possible during the middle of a construction process to go back and redesign the building.

Deputy Eoin Ó Broin

Each construction project is different and projects are at different stages. Of course, it is not that one would not have some transitional arrangement, but if the transitional arrangement is too broad or too blunt, there is the risk of incurring greater charges at a later point in time, if at a later point in time our descendents after we are long gone are having a conversation about how to retrofit those buildings. A commencement does not necessarily mean much work has been done. Likewise, the fact that a building has been designed does not mean that under certain circumstances a modest amendment to that design without necessarily changing the planning permission could not be incorporated. It just seems to be that this is the date and that is it, rather than something a little more sophisticated given that there is not just the imposition of additional costs and inconvenience to the construction at that point but, for example, for future occupants if they had to retrofit or if the State has to pay at that later stage. Does Mr. Armstrong understand the point I am making?

Mr. Seán Armstrong

The buildings we are building now are nearly zero energy building, NZEB, so they are very energy efficient.

Deputy Eoin Ó Broin

That is to be hoped if building control is capturing all of that properly, but yes.

Mr. Seán Armstrong

Yes, with the systems that are in place. The buildings we are building now are 70% more energy efficient than buildings that were built in 2005, so we have very energy efficient building in place. Even though concrete perhaps is not poured in the ground, there are contracts signed, there are design teams-----

Deputy Eoin Ó Broin

I understand that. I am not arguing against it.

Mr. Seán Armstrong

Especially when it comes to large-scale developments, one is talking about reworking a design. It is a variation and a change in a contract. It is a delay and a cost and it has schedule impact.

What we found in the past is that depending on the impact of the change in regulation, we can change the transition arrangement. If it is a very significant change in regulation, especially in the non-residential sector, we found that two years might be needed if we are talking about wall thickness and the thickness of insulation in walls. If it is a minor amendment, sometimes we reduce the transition arrangement to one year or six months. If it is something that happens at the very end, sometimes it can be shorter than that. We adjust the transition arrangements depending on the impact of the regulation. The only point we made when we suggested that amendment is that there must be some provision for a transition arrangement, and that is not in the directive at present. If it is not provided for in the directive, it will lead to severe and major contractual problems. It has been done previously so I believe it needs to be provided now.

Regarding MEPS, the point there is where feasible. When we are using the phrase "where feasible" there, the intent is-----

Deputy Eoin Ó Broin

The specific point in Article 9.1 is just the reference to not impacting on rental supply. Some 25% of households in Dublin are renters and 20% of households across the State are renters. There is a heavy concentration of lower income families with poor BER ratings and higher energy poverty. I am not arguing that we do anything that reduces rental supply because our private rental sector is currently shrinking, but in many of these debates it appears to be the one area where it is going to be the most difficult to bring those buildings up to standard. I am approaching this with all the caution with which Mr. Armstrong is approaching it. I just wonder if his concern there could also be orientated towards what else we could do to encourage, incentivise or ensure that they are brought up to those minimum standards rather than excluding them for fear that it might lead to a loss of rental supply, which appears to be the implication of the wording of his document.

Mr. Seán Armstrong

No, I do not think that is what is intended. Where we say "where feasible" what was intended, and this is written in Housing for All, was where technically and functionally feasible. It is not-----

Deputy Eoin Ó Broin

We are talking about two different parts of Mr. Armstrong's comment on Article 9.1. I am referring specifically to the impact on private rental supply; it is about halfway down.

Mr. Seán Armstrong

What we have said is that it may have an impact on the supply of rented housing and that this should be considered in the EU impact assessment and different scenarios modelled in order to mitigate the impact on the supply of housing. Our first question is: has the EU Commission, in drafting this directive, considered the impact of minimum BERs on the supply of housing and is it suggesting any supports to address that? That was our question to the Commission. However, nationally, we intend to do a study on this to understand the impact, what types of dwellings will be impacted, what is the cost and what is the profile of the occupants of those dwellings. We are developing that study and we want to do that analysis. Then it is about implementation and implementing it in the most effective and just way, taking account of the just transition. We have put the question to the Commission, but we will do a study on that at national level as well.

Deputy Brian Leddin

There were a few questions from Deputy Ó Broin that were avoided. It was not Mr. Armstrong, but there were some that the other witnesses did not get to answer.

I wish to make a point on the narrative in the public domain, that people will have to move out of the house for the deep retrofit. That might refer back to the pilot scheme from the previous Government, which was very generous in terms of the amount of money that was available. People did root-and-branch work. It was more than retrofit. I saw houses with the roof taken off and floors dug up and so forth. It led to an impression that this work had to be done to carry out a deep retrofit. That is not the case and I believe you are correct, Chairman, that we need to get that message out.

I do not know how much time we have but I would like to hear more about the national building renovation plan which Mr. Deegan mentioned in his opening statement. It sounds very interesting. I do not know much about it but perhaps he could talk about it for a minute or two.

Deputy Higgins got away with talking about electric vehicles, so perhaps I could talk about cycling. When building new buildings, part of the life cycle analysis is how one gets to and from the buildings. As much as possible, especially in line with our objectives of compact growth, we should be encouraging people to engage in active travel and walk and cycle. One of the weaknesses in our housing development is that we are not putting in good quality cycling facilities. Often, there are the very basic Sheffield stands in the basement of an apartment building. There is a far higher standard. We should be looking towards a secure and sheltered standard. Across all social housing, every new social home should have very good cycle facilities to encourage the occupants to choose cycling over driving if they can.

I have a question for Mr. Hughes about the harmonisation. He said an A-rated building will still be an A-rated building, but will a C-rated building still be a C-rated building? If I heard him correctly, the most energy efficient building in the new recast BER is still going to be as energy efficient, but as one goes down the bands, there will probably be a mismatch so what is now rated C might become perhaps a B or a D. Could he address that? People will be interested to know. If they think they have a B-rated home now and under the new system it might become a C, they might be disappointed, but we should be very clear about it. Is it correct that the whole life cycle emissions will be on the BER? Perhaps he will address that too.

Mr. Robert Deegan

The national building renovation plan will be, effectively, the new name for the long-term renovation strategy. The existing directive has a requirement for the long-term renovation strategy which includes an overview of the national building stock, policies and actions to stimulate cost-effective deep renovation and a range of other areas. It is very prescriptive in terms of what must be included. That sets a very high level for non-residential and residential buildings and how we are going to achieve our targets for 2030, 2040 and 2050. The proposal in the new directive is that the first plan would be submitted by the middle of 2024.

Our last long-term renovation strategy was published in September 2020. As I said, that was a high-level document. The national retrofit plan makes that far more granular and translates it into time-bound action steps we need to take to meet the targets set out in the long-term renovation strategy. The national retrofit plan is therefore a slightly more operational version of the long-term renovation strategy. In principle, we see no difficulties with the new proposals in that regard.

Mr. Seán Armstrong

As for sustainable transport, compact urban growth is a key measure in Housing for All. There is a national sustainable mobility policy led by the Department of Transport. The Department has worked closely with our Department in developing that strategy and has set out actions to promote walking and cycling. The Department of Transport is supportive of all the provisions for additional bicycle parking in the EPBD, but the EPBD is at a building level rather than an area level. The Departments of Transport and Housing, Local Government and Heritage support the provision of bicycle parking spaces in buildings. I think the design of areas and of developments is part of planning policy and the national sustainable mobility policy. I know that it is part of the objectives but I would have to come back to the Deputy with the detail of that from our planning side.

He mentioned one thing about the disclosures. The directive states, "Member states shall ensure that the life-cycle Global Warming Potential ... is ... disclosed through the energy performance certificate of the building." That is the provision in the draft directive.

I will let Mr. Hughes take the question about the impact on skills.

Mr. Chris Hughes

As for the harmonisation of the energy scales, the Deputy will recall that I said the high-performance building or building with low energy use will still have low energy use. There is a piece of work to be done on mapping where the current energy rating scales would migrate to, from A1 and A2 all the way through to G, in the harmonised scale from 2025, that is, where an A1 rating would sit on the new scale. That is a piece of work the SEAI will need to do, informed by what a zero-emissions building will be. It will be A-rated on the harmonised scale. There is also the mapping of the G-rated buildings, that is, the 15% poorest performing buildings. They will need to be G-rated on the new scale. There is a piece of work for the SEAI to do in that regard.

To add to Mr. Armstrong's comments on the life cycle, there is a piece of work under way by the European Commission on the carbon emissions associated with a building. It has commissioned a detailed study, which is running at the moment and due to be completed in March of next year. That is a roadmap for carbon emissions reductions across the building stock and various trajectories or actions that might be taken. That will help inform how we calculate and display embodied carbon when that calculation methodology becomes available to us and where that information will be positioned, whether in the certificate itself or in related documents that accompany the BER certificate and advisory report.

Chairman

I have a couple of questions. Does Deputy Ó Broin wish to come back in for a fourth round?

Deputy Eoin Ó Broin

Yes.

Chairman

We have veered into the matter of electric vehicles twice now, but it has some relevance in the development of vehicle-to-house and vehicle-to-grid-type technology. I do not know if that technology is quite there yet. Will that be incorporated into how the energy efficiency of a house is rated when the capability exists to take the energy stored in vehicles and bring it into the energy use in the house, or is that on the horizon at all?

Mr. Seán Armstrong

The directive provides for the smart charging of vehicles, that is, that you can charge your vehicle, which can then support your house.

Chairman

It is a two-way system.

Mr. Seán Armstrong

Yes. That is provided for in the directive. From a building regulations compliance perspective, it may be difficult to take account of that in energy performance because it depends on whether every house has an electric vehicle and whether it continues to have one. Building regulations are usually based on what is physically built into the house, so that would be a challenge. I am not saying it could not be done, but that would be the challenge with it. What is maybe more relevant - and this is about information and communicating information - is that the directive also provides for a smart buildings indicator. That is an indicator of how well-connected a dwelling is to its energy sources and how well it manages its energy sources. There is a provision in the directive that a smart buildings indicator will be produced. The idea of a battery source that can either provide transport or support one's house will definitely be taken into account in the smart buildings indicator. That is also provided for in the directive.

Chairman

It is a fascinating area, as is the way technology advances within a decade. We will probably look back at the recording of this meeting and say, "Of course, everybody is doing vehicle-to-grid now", but that might be in five, six or ten years. It brings me back to the matter of the construction capacity we have and the number of people we have to do this work. I am aware that the apprenticeship numbers are increasing. What kinds of apprenticeships are we looking at? Do they include electrical apprenticeships? Are we looking across the range or are there certain apprenticeships we really need to focus on, whether carpentry, blocklaying or plastering, whereas electricians and plumbers-----

Mr. Seán Armstrong

I am happy to take that question from a general construction perspective. The expert group on future skills needs published a report last year identifying what the skills needs would be to support Housing for All. It did a report on low carbon as well, but there is obviously a lot of crossover between new-build construction and retrofitting. As for new builds, Housing for All identified that there are currently 40,000 construction workers working directly on housing, that to deliver 33,000 dwellings per year we would need 67,500 construction workers and that, by 2030, since the numbers ramp up and it is an average of 33,000 units per year, we would need 80,000 construction workers. Then the expert group did a breakdown of that by trade and it was found to be across all trades: electricians, plumbers, plasterers, blocklayers and general operatives. All trades needed, if not exactly to double, to increase their numbers more or less twofold.

Chairman

An analysis is done of that so we do not end up with 25,000 electricians and not enough plumbers and carpenters.

Mr. Seán Armstrong

It is worth saying that under Housing for All there is a specific focus on skills and training and labour shortages. There is the industry capability group, led by the Secretary General of the Department of Further and Higher Education, Research, Innovation and Science. That Department is focused on increasing the workforce and it is working with SOLAS. There have been significant increases in the number of apprentices coming through the construction trades recently. They are increasing their capacity. They are doing awareness campaigns and working very closely with the Department of Social Protection to encourage people to work in the construction sector. There is an industry engagement group called the construction skills sector recruitment group. It is a collaboration between the Department of Further and Higher Education, Research, Innovation and Science, SOLAS and the construction industry. It aims not just to encourage recruitment but also to encourage young people to work in the sector and to improve gender balance and diversity. Quite a lot of work is being done in that area.

Chairman

There are good long-term prospects in that area. Because of the target we have of 500,000 houses and more, the work will be where people live. People will not necessarily have to travel that far for it if we are to eventually reach that target, which is encouraging.

I had a brief discussion with somebody the other day about heat pumps and that person asked me about storage heaters. Are storage heaters completely gone and are they a technology of the past? We will use electricity to power heat pumps as we scale up renewable electricity and reduce the emissions from electricity generation. Are storage heaters of any benefit as a future source of heating a house?

Ms Orla Coyle

At the moment, they do not turn out favourably in the BER system because of the grid's primary energy usage and CO2 emissions. As the grid decarbonises, they will probably come back into favour and be more favourable than, say, a boiler. The performance of a storage heater is only about 100% efficient while the performance of a heat pump is three times that. Heat pumps would still be more efficient than storage heaters. That is not to say storage heaters will not have a future. If the grid decarbonises, they may be an option for certain applications.

Mr. Chris Hughes

It is important to note that a new home still needs a mandatory renewable energy requirement. A storage heater will not deliver that. A renewable energy system is needed in the house. A heat pump gives that because it reclaims ambient heat and you get the renewable energy contribution in that way. You do not get that from a storage heater by itself in the home.

Chairman

As renewable electricity ramps up, does that impact on the efficiency of a storage heater? If 80% of our electricity is generated by renewables, rather than 50% generated by fossil fuel as at the moment, does that make the storage heater more-----

Ms Orla Coyle

It reduces the carbon emissions associated with the storage heater. What Mr. Hughes is talking about is there is a certain amount of renewables that have to be produced on-site, so that would have to be supplemented by, for example, a solar PV or------

Chairman

Sorry, I misunderstood. Thanks for that.

There seems to be a focus on fabric first. That seems to be the way we target the retrofitting of a home, with the wrap and the insulation. Do we run the risk that, if we focus everything on fabric first and everyone is working on that, when we then try to fit heat pumps we have capacity pressures in doing that? Is it possible to fit heat pumps to a home that has not had a full insulation wrap done, with the view to eventually coming back to do the insulation wrap?

Dr. Ciaran Byrne

That is a interesting question. The SEAI launched in February a heat study, with which the Chairman is probably familiar. It looked at how we decarbonise our heating. There was a strong focus in that on where in the continuum of fabric the heat pump should be inserted. Much work has been done on that. The heat study is looking at the potential opportunity from a decarbonisation perspective to put in the heat pump earlier in the process. The SEAI has just launched the heat loss indicator, HLI, pilot scheme to look at that in practice. We have a powerful heat study and are asking how that translates into practice on the ground. One of the questions around the HLI will be as to where the heat pump goes in and whether it can be put in earlier. A concern is that putting a heat pump in a home that is not adequately insulated can drive up costs. There is a carbonisation piece and a social piece. The heat study identified that as something we need to look at.

Deputy Eoin Ó Broin

I will pick up from the Chair's discussion with Mr. Armstrong about skills. A problem with that report is it is based on the HNDA target of 33,000 on average per year. I know Mr. Armstrong will not comment on this but I will make the point anyway for the record. When we get to the other side of the census, get all the new inputted census data and revise the HNDA, we will see that the level of need is much higher. The Department will not comment on that until we get the data. There is also a strong case to say the existing data, and therefore the figure of 33,000, underestimates the number of social and affordable homes needed. We will need far more than an average of 33,000 between now and 2026, let alone beyond that.

The other problem relates to a question I asked earlier, so I will come back to both Departments. We are still talking about building houses in a traditional way and will not meet our emissions reduction targets if we continue to do that. It is not possible. Other countries, including in Scandinavia, as well as Britain, Poland and France, are way ahead of us in embracing the new building technologies that are low-, or in many cases, zero-carbon. They do not use as much brick, cement, concrete or steel as we still use. We have been told about the work of the Department of Public Expenditure and Reform and the innovation subgroup of the construction sector working group. I am not asking the witnesses to repeat that for the committee. We are also aware of the work of Enterprise Ireland and others.

I am interested to hear from both Departments in advance of the setting of the sectoral targets, particularly the sectoral target most relevant to the work of this committee and its focus on residential housing output. What work is ongoing in both Departments to assist the public and private sectors involved in residential development to reorientate away from the traditional, labour-intensive, inefficient and carbon-intensive building technologies to the new building technologies that we know they are and that been used? We have been talking about doing it since Rebuilding Ireland was published in 2016. Some companies in the country are developing this technology but on a limited scale.

Will the witnesses answer in simple terms for those of us trying to get our heads around how this new sectoral target will work? Our committee has a role to play in supporting, promoting and advocating for it. What preparation are both Departments doing to assist public and private sector housing providers to start making that transition to those newer technologies? Deputy Leddin picked up the point and Mr. Armstrong deftly and diplomatically sidestepped it, but are we looking at changing planning regulations so that the demolition of a building has to be justified rather than it being taken as read? Are we looking at the phasing out of high-carbon concrete or cement, given that we have the technologies to produce low-carbon cement and concrete in the country at almost the same cost? Are we looking at changing building regulations in terms of the cap on 10 m for timber product residential developments subject to further strengthening of fire safety regulations? What is happening in the two Departments to push that stuff along in the areas they are responsible for? Without that, the public and private sectors, in terms of delivery mechanisms for housing, will continue building with improved energy efficiency systems but the embodied carbon will be at the same level it currently is. What good news have the witnesses for the committee on their preparations to help the sector meet its targets on the other side of this year and next?

Mr. Seán Armstrong

Our remit in terms of sectoral targets is more around energy efficiency and retrofitting. The Deputy's question is more about embodied energy and modern methods of construction-----

Deputy Eoin Ó Broin

That is the concern I have. We know the built environment is responsible for approximately 30% of emissions, 10% of which is embodied carbon. That Irish Green Building Council research is important because it shows if all the good work people here and elsewhere are doing continues to be done in terms of energy efficiency, then the carbon emissions from our energy systems and operational carbon will fall dramatically. Meanwhile, the embodied carbon will keep going up. That is just housing, schools, roads and hospitals.

It would worry me if the Department of Housing, Local Government and Heritage's primary focus on this issue is operational. It should be equally shared across both. While the operational is the larger component now in the built environment, it will not be like that in five years. Does Mr. Armstrong see the concern I have?

Mr. Seán Armstrong

The Deputy is correct. Embodied carbon is approximately 10% of emissions internationally. When I referred to our sectoral challenges, I was talking about what is assigned under Climate Action Plan 2021. Embodied carbon is also committed to in that plan. Research work is being done by SEAI and pilot projects are committed to by the OPW but there is a substantive area of development in the plan

The Department of Enterprise, Trade and Employment is committed to lead a task force to reduce the embodied energy in construction materials. There is a work programme set out in the 2021 climate action plan. It focuses on standards, construction products regulation and establishing frameworks to measure embodied carbon in buildings. A critical path item with regard to the implementation of measuring embodied carbon in buildings is the review of the construction products regulation because that will set the standard for measuring the environmental performance of construction products. To measure the volume of embodied carbon in a building, we need to know what the embodied carbon of each construction product that has gone into that building is and to know the embodied carbon, we need a certificate. The rules for calculating that carbon will be defined by the construction products regulation. A draft regulation was published for review recently. There is a horizontal working group looking to define-----

Deputy Eoin Ó Broin

It sounds like a working group that is lying down but clearly that is not the case.

Mr. Seán Armstrong

Because we are talking about construction products, and there is a range of construction products-----

Deputy Eoin Ó Broin

I am being flippant - my apologies.

Mr. Seán Armstrong

We must have one group deciding what the standard for assessing performance is. I have to go through the timeline because the Deputy asked what we are doing and I must explain. The regulation was being published and the horizontal working group is working to define the standards. The schedule for the group to define the standards for measuring the embodied carbon is quarter 2. In parallel with that, the Department of Enterprise, Trade and Employment is leading a task force made up of the Departments of Housing, Local Government and Heritage and Environment, Climate and Communications along with SEAI. It is identifying the standards that need to be updated. A framework must then be put in place. SEAI has been assigned lead responsibility for the development of that framework but it is already developed at European level. What we need are these environmental certifications, which the Commission has committed to developing the standards for. In its most recent proposal, the Commission also proposed that an EU database be established. It is important that we work in parallel with the Commission. If we decide to adopt certificates that are not in line with the construction products regulation, we will be asking industry to certify to a standard that is not necessarily the European standard and will develop a lot of certificates and build a very sophisticated system on a foundation that is not the foundation we need in a year's time. It is a complicated area. The EU is a critical path item but there is a task force working on it. It is meeting this evening and we would probably have been at that meeting working on it today but-----

Deputy Eoin Ó Broin

I am not suggesting that we should have a standard separate to the EU-wide standard, particularly given the volume of our construction materials, not to mention construction industry professionals, that come from outside the State. The issue is that once all that is in place, a separate piece of work must be done then in potentially changing our building and fire safety regulations and planning codes as well as introducing various incentives in procurement or the Department's four-stage approval process to make sure people use the lowest possible carbon building to produce their homes. I know the departmental officials are overworked and are working on a lot of things but given we know there is a timeline and that some of it is not under our control because it is happening at European level, in parallel the other relevant section of the Department could ask what we are going to do with those standards when we have them. We could start doing working through some of the preparatory work to ensure that once the standards are agreed, we do not then spend another year or two years breaking the back of the witnesses from the Department working out all sorts of detailed technical regulations. We are behind the curve on this in terms of where residential construction is happening. Does Mr. Armstrong recognise the question I am asking?

Mr. Seán Armstrong

I think I understand the question but as I have said, we are supporting the Commission in the development of the standards for the certification of construction products but in parallel, a task force is working on developing the framework that will use those certificates once they are available. As soon as those certificates become available, we will have developed the framework and tools to take that data and develop these global warming potential declarations that will be required by the directive. It is happening in parallel. We are not doing this sequentially.

Deputy Eoin Ó Broin

Will Mr. Armstrong explain what those frameworks are in plain English? We know the development cycle, particularly for large residential developments, is five to seven years from when a site is acquired, planning permission is sought, go to tender, procurement, etc. With each year or six-month period that passes, seven years of a development cycle of individual projects is lost. Is Mr. Armstrong saying that in parallel with developing the certification and standards, the Department is also looking at how we operationalise those standards and certification frameworks in the planning code, building control and fire safety? It is a really obvious one. We can see how other jurisdictions are using really high-quality zero-carbon off-site manufactured timber products that are of the highest energy efficiency and meet the highest fire safety standards and are approximately €1,000 cheaper per square metre in the delivery of good-quality apartment developments. We cannot use those here even though that technology is available because we cannot go over 10 m. Clearly, if we are going over 10 m with new types of building technology, we must make sure our building control and fire safety control are robust so they can certify those. Is Mr. Armstrong saying those type of discussions are already happening or will all that only start happening once those frameworks are in place?

Mr. Seán Armstrong

Two different points are being made there. The first question is about a framework and a methodology to calculate so we can measure performance.

Deputy Eoin Ó Broin

Yes - 100%.

Mr. Seán Armstrong

This is happening. A task force is working on that. The initial meetings are starting. There is a European framework known as Level(s) and we expect that we would use that framework. When the data is available from the Commission process, that will feed into that. That process is happening.

The second part of the Deputy's question is about specific technologies-----

Deputy Eoin Ó Broin

It is not about specific technologies. I accept and understand the argument that we must have an agreed methodology for calculating the volume of carbon in any particular building product. The reason we want to do that is then we will know that a certain product has lower carbon than another product. The next bit of work involves deciding how we make sure everybody uses this product. I do not care which product it is. For example, Deputy Mairéad Farrell and I met with the Secretary General of the Department of Public Expenditure and Reform recently and discussed public procurement. I said that if they were agreeing their procurement rules for contractors delivering social housing, for example, once those frameworks Mr. Armstrong is talking about are agreed, we want to ensure that if I am putting in a tender for building 500 local authority homes and am using the lowest possible carbon building materials, I get an advantage in the tendering process because we want to ensure we are incentivising the lowest carbon building in public housing. I do not mean to be in any way harsh on Mr. Armstrong but along with that timeline that he rightly outlined must take place to agree those methodologies, certifications and frameworks, is the Department in parallel preparing to ensure that when all this is in place, that stuff is the stuff that gets used so that the social homes that are built in two years are near zero-carbon social homes? How we do ensure we do not just put PVA on them but that the embodied carbon is as low as possible because we know the building technologies are there and the certifications will be in?

That is really to do with the planning, building control and fire safety sections in the Department of Housing, Local Government and Heritage.

Mr. Seán Armstrong

It is not necessarily the sections the Deputy has identified. Once the framework is in place, it creates a recognised methodology to compare different materials. Once it is established as a Government methodology, that is available to the procurement or specification process to use and to specify performances.

Deputy Eoin Ó Broin

I get that, but that is the Department of Public Expenditure and Reform, and when that Department is in, I will grill it on that. There is nothing to say that once that methodology is in place, the planning system could not be revised to privilege certain types of building materials. I do not mean individual building products but products that have a certain embodied carbon level. There is no reason that could not be done. We do not do it currently.

Mr. Seán Armstrong

The way it would work and the way it works in other member states is by introduction on a declaration basis. This is the way it has happened in Denmark and some other member states. Initially, public sector buildings declare their embodied carbon performance. Then there will be some capacity building. It would possibly be required for public sector projects. Eventually, performance requirements would be introduced that buildings would have to achieve. One has to have the methodology and a project database and build the capacity in the system. Designers need to know how to use these tools. All manufacturers must have certificates for their products. That capacity has to be developed through voluntary certificates and procurement processes and then through regulatory disclosures and regulatory performance requirements.

Deputy Eoin Ó Broin

What I am hearing from Mr. Armstrong is that bit of work will happen after the methodologies, certificates and frameworks are agreed. That is not being prepped in parallel now.

Mr. Seán Armstrong

It has to-----

Deputy Eoin Ó Broin

I am just asking-----

Mr. Seán Armstrong

If we want to say we want to have a minimum performance, we have to say it is a minimum performance as carried out using this methodology. We cannot develop regulations that do not have a methodology to which to refer. The methodology has to be in place first.

Deputy Eoin Ó Broin

I am not convinced but I hear Mr. Armstrong.

Chairman

It is a fascinating aspect of what we are talking about. We were discussing last night, even at the planning stage, having to look at the carbon impact of what is constructed. Deputy Ó Broin covered many of the questions I was going to ask. That definitely incentivises technological advancements as well. The methodology Deputy Ó Broin was talking about of off-site construction has other advantages aside from the lack of waste. One gets perfect fitting, draft-proof buildings out of it. It is indoor work for many people. It is a hell of a lot easier than working on site.

Mr. Seán Armstrong

It is not dissimilar to what we have done with BER certificates. We developed the BER methodology which we then used to set the performance requirements for buildings. We then advanced the performance requirements for buildings. As we advanced the performance requirements for buildings, we saw the technologies change. The walls got wider, we went to triple glazing, we improved our ventilation system and we introduced different types of renewables. However, we have to have the performance methodology.

Deputy Eoin Ó Broin

I do not dispute that but our difficulty is that if the Government's targets are met, we will churn out a considerable volume of homes. Those homes will contribute significantly to emissions outputs. This is in no way to show a criticism of anything Mr. Armstrong has said and the information he gives to committee is always very helpful to us, but there is an opportunity now to do this as expeditiously as possible without in any way compromising the quality of the standards. There is a frustration out there because, as far back as 2016, Government policy had indicated it wanted to start doing this. We have been talking about modern methods of construction and modular development in terms of Government policy for quite a long time but we are still building homes with almost the same level of embodied carbon as we were five years ago. From everything Mr. Armstrong has said, none of which I am criticising, my concern is that we could be here, if we are all still lucky enough to be elected, in 2026, at the end of this phase of the Government's housing plan, without a wild lot having changed in terms of how we construct and the materials we use for the overwhelming majority of residential units built in the State. That is my worry.

Mr. Seán Armstrong

Deputy Ó Broin opened the question by saying he did not want to talk about the construction sector group and modern methods of construction-----

Deputy Eoin Ó Broin

It is not that I do not. It is just that we have heard from them and we will hear from them again.

Mr. Seán Armstrong

Significant work is ongoing and we expect a construction technology centre, a front place with modern methods of construction frameworks for procurement. To characterise it that there is not much happening-----

Deputy Eoin Ó Broin

The reason I was bracketing that stuff off is because-----

Mr. Seán Armstrong

The key point is there is a critical path item around the construction products regulation, which we understand will happen quite soon. We expect to get some direction on it in quarter 2 of this year. That is a key enabler and is outside of our control.

Deputy Eoin Ó Broin

The reason I was bracketing that stuff off was because they will tell us that themselves. I know Mr. Armstrong has said it was not these sections but planning, building control and fire safety regulations will be critical in reform of those three areas if the really good work other Departments and the outwork on the EU directives is to be accelerated in terms of delivery. I presume Mr. Armstrong accepts that.

Mr. Seán Armstrong

That is what the modern methods of construction development in Housing for All are about. That is what the construction technology centre that is being established is about. It is about developing, researching, demonstrating and testing.

Deputy Eoin Ó Broin

That I know.

Mr. Seán Armstrong

We cannot just change a regulation to enable a technology. We need to know the technology works. We need to know that it is safe and has been proven in the Irish environment and regulatory context. Industry, with academia and research bodies, needs to deliver that information to support the regulations.

Deputy Eoin Ó Broin

I accept all of that.

Mr. Seán Armstrong

Regulations will not change the industry. It has to provide its own infrastructure.

Deputy Eoin Ó Broin

Absolutely not. Let us take cement and concrete. If we take the approach Mr. Armstrong has just outlined, the vested interests that have made high levels of investment in recent years in their higher carbon facilities will desperately resist the shift to many of these new methods of construction. One of the challenges to the building industry will be that some of the companies and developers who are wedded to the old ways will either have to get with the programme or be displaced by new emerging companies. If we leave it to industry, we know what will happen.

Mr. Seán Armstrong

The industry needs to develop the infrastructure. In tandem with that, we can introduce our performance-based regulations. It is then up to the industry to meet those requirements-----

Deputy Eoin Ó Broin

We will come back to this conversation very soon.

Mr. Seán Armstrong

-----which is what we have done very successfully on the operational side up to now.

Deputy Eoin Ó Broin

Sure.

Chairman

There will always be people who will desperately resist actions on climate, environment and other aspects-----

Deputy Eoin Ó Broin

I agree.

Chairman

-----but they are only heading in one direction. Despite the good work that has been done in retrofitting over the past decade or longer, we are heading into an era now of very high ambition in terms of that 500,000 homes target. The energy grant scheme that has been introduced sends a very strong signal out to the industry and the supply chains that this is where we will go in the next decade and further. Will the scaling up and the settling in of this plan improve the speed at which we retrofit, the number of people who go into it and the costs associated with it? Does Mr. Armstrong expect that to be the trajectory of this? Does Mr. Deegan want to take that?

Mr. Robert Deegan

I can take that and Dr. Byrne might come in afterwards. Part of what we are doing with the retrofit plan is stimulating innovation. Schemes such as the community energy grant scheme have innovation as their objective. That scheme and the national home energy upgrade scheme facilitate aggregation and bringing projects together. Whole-street and whole-area retrofits were alluded to earlier, of which we would like to see and encourage much more.

There is also is the opportunity for off-site manufacture in the area of retrofit as well as in new build. This is used in other countries and we would like to see it here. We would really like to see the level of certainty and ambition that the Government has now given stimulating home-grown industries to create more jobs, not just in the delivery of house-to-house retrofits but also in the technology. We are seeing that with some of the heating technology manufacturers. They have seen the signals that have been given and are switching from fossil fuel-based technology heating systems to renewable ones.

As scale builds up, that will also help with cost. It is likely that it will just counteract the extreme inflation we are seeing in the market that is in many ways driven by external rather than internal factors. As more people become qualified and expertise increases, specialisation begins. There was a discussion earlier about the expert group on future skills needs for the new-build sector. That touched on the retrofit sector but another full report was done on retrofit. Skills for Zero Carbon, as the report is titled, provided a skill set-by-skill set consideration for each type of person and quantified these. The report has gone to SOLAS and the Department of Further and Higher Education, Research, Innovation and Science. They are now working to ensure that, as we increase the ramp rates in activity, there is a match between the skills requirements and the people who can actually deliver that activity.

While there is a great deal of focus on apprenticeships, including new ones, which will be absolutely crucial, we cannot rely on these alone because it will take four years for those going into apprenticeships now to become fully qualified. It is about reskilling existing plumbers to enable them to convert to installing heat pumps. We need reskilling and retraining of people in that area. Much like for the new construction sector, it is across the board for the apprenticeship and skills types. The Skills for Zero Carbon report published in November of last year goes into considerable on this. That is a crucial first point.

With regard to the retrofit plan, the four pillars are financing and funding, skills, driving demand and, to a lesser extent, governance. These pillars must go in parallel because we pouring lots of money into a broken system that does not have enough people to deliver it will simply increase the price. If there is not enough demand, we will be training up a large number of people who will end up just sitting there. Demand, supply and finance must all run in parallel.

We also need to do this very urgently because our targets for 2030 and beyond are so ambitious. That is why the comprehensive and coherent approach we are taking with the retrofit plan takes those issues in hand and systematically addresses of them, one by one. That is for this year and it is not the answer to all of the questions, as we would be the first to say. No other country in the world, that we have found at any rate, has the same level of ambition. Others will probably follow us but retrofitting 30% of the housing stock to the level we are talking about is certainly among the most ambitious target of any country in the world.

We will need to continue to evaluate our approach, measure performance, adapt and see what the new barriers are. As we address the previous barriers, we will address the new ones as we identify them, in consultation with stakeholders and the sector.

Chairman

Does Dr. Byrne wish to make a contribution?

Dr. Ciaran Byrne

My colleague gave a pretty good answer to that question. I will make a couple points, some of which the Chairman touched on. We are talking about retrofit but in any market that one plays in, once the sector sees that there is a market that is stable and growing, people tend to participate in it.

On the retrofit side, we have given clear market signals right out to 2030 - we have really signalled, to a large extent, right out to 2050 - in respect of what we are going to do. When we hit the target in 2030 we will not stop because we will have the other two thirds to complete by 2050. As such, we will be at this for some time. As well as giving market signals, there are also the budgets that have been allocated towards this programme. We are, therefore, giving two very strong signals to the market for people to get involved.

We are seeing that in the one-stop office shop registration where we have the obvious candidates which have been involved in the sector but we have also seen quite a few companies leaning into this and saying they see something here. Some very big companies are looking into this because they are seeing retrofit as a long-term, more stable proposition - I would not use the term "slow burner" - than some of the more cyclical parts of the housing sector.

The other point, which I believe the Chairman touched upon - Deputy O’Donoghue certainly did - is that wherever there are homes, there are homes to be retrofitted. There is a great positive there for regional areas. A large chunk of the building will not be stuck in our urban centres. There is an opportunity for younger people to get involved in training. Not only that but rather than finding themselves having to drive to Dublin, Cork, Galway or wherever, they will be able to have a long-term stable career in retrofitting and live in whatever part of the country they want.

My colleague talked about technological change. At a general level, the rate of technological change in the building sector is no different from the rate of change across all other sectors, for example, medical diagnostics and computers. Even today, I am seeing across various spectrums new technologies coming in from mainland Europe for retrofitting or, for example, coating odd buildings that are not normal in respect of retrofitting. What we are doing today and what we will be doing in three or ten years' time will be quite different.

Chairman

I thank Dr. Byrne.

Deputy Eoin Ó Broin

Who will predict where we will be then?

Chairman

This is a fascinating subject and I found this meeting very interesting and informative. I thank all of our guests for their attendance. It has been very helpful to the committee. I understand we will deal with embodied carbon at our next meeting when we will continue our consideration of this subject. I also thank members for their attendance.

The joint committee adjourned at 4.16 p.m. until 3 p.m. on Tuesday, 3 May 2022.