Select Committee on Environment and Climate Action debate -
Tuesday, 8 Feb 2022

Vote 29 - Environment, Climate and Communications (Revised)

Chairman

This meeting has been convened to consider the revised Estimate for Vote 29, programmes A, B and C. I welcome the Minister of State at the Department of the Environment, Climate and Communications, Deputy Ossian Smyth. The proposed format of today's meeting is that the Minister of State will make an opening statement and we will deal with Vote 29 on a programme-by-programme basis. There are three programmes. We will consider each of them separately, with questions from members of the committee.

I will read out the note on privilege. Members 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 Houses, or an official, either by name or in such a way as to make him or her identifiable. I remind members that they are only allowed to participate in this meeting if they are physically located on the Leinster House complex. In this regard, I ask all members, prior to making their contribution to the meeting, to confirm they are on the grounds of the Leinster House campus.

I call the Minister of State to make his opening remarks.

Minister of State at the Department of the Environment, Climate and Communications (Deputy Ossian Smyth)

I welcome the opportunity to meet with the select committee to discuss the 2022 Estimates for the Department of the Environment, Climate and Communications. I am accompanied by officials from the Department.

The total provision for the Department in 2022 is €858 million, comprising €700 million of capital, excluding capital carryover of €58 million, and €168 million for current spending. This represents a 19% increase over 2021 and reflects the significant scale of ambition in Ireland’s transition to a climate-neutral, circular and connected economy and society. Before I begin, I would like to bring to the committee’s attention the updated programme and subhead structure in the Revised Estimates. These changes better reflect the Department’s statement of strategy, Le Chéile 23, which sets out our vision for the three-year period from 2021 to 2023.

I will now highlight some key initiatives across the environment and climate action, energy transformation, and circular economy programme areas. The Estimates for programme D, the connectivity and communications programme, will be considered by the Select Committee on Transport and Communications tomorrow. Programme A covers climate action and environmental leadership, including licensing and enforcement; monitoring, analysis and reporting on the environment; research and development; and implementation of climate action measures. Programme A provides €41.6 million in operational and capital funding for the Environmental Protection Agency, EPA, to deliver its range of functions to protect the environment. The EPA’s 2022 allocation includes funding for additional staff resources in the Climate Change Advisory Council secretariat. Some €16.8 million is being allocated for environmental and climate research, including €10 million for the EPA’s programme of research and €3.2 million for the climate action and modelling group to provide technical support for wider climate and environment policy development, as well as the implementation of the climate action plan.

A further €15 million is being allocated for contributions towards international climate commitments, which will contribute to Ireland’s goal to more than double the annual funding for developing countries to tackle climate change to €225 million by 2025. Some €11 million is being provided for the national just transition fund, as well as a further €21 million for expenditure associated with the EU just transition fund, including programme design, establishment of the programme authorities and initial programme expenditure once the programme has been finalised and approved by the European Commission.

Programme B, the energy transformation programme, supports Ireland’s ambition for a net-zero emissions future by delivering energy-efficient measures across the residential, public and business sectors and by enabling the deployment of renewable energy infrastructure. Some €21.47 million is being provided to cover the operational costs of the Sustainable Energy Authority of Ireland, SEAI, including an extra €3.1 million for additional staff resources required to deliver its programmes. Some €46 million is being provided for improving energy efficiency and increasing the use of renewable energy in businesses and across the public sector. Some €202 million in carbon tax revenue is being allocated to fund the SEAI residential and community retrofit schemes and €109 million of that allocation will be used to provide free energy efficiency upgrades to households that are in, or at risk of, energy poverty.

The 2021 climate action plan has set ambitious targets to retrofit 500,000 homes to a building energy rating of B2 or carbon equivalent and to install 400,000 heat pumps in existing buildings by the end of 2030. The national retrofit plan sets out the policies and measures that will be implemented in order to deliver on these targets. The plan indicates that new and improved SEAI grants will be a central element of the Government’s strategy to encourage homeowners to upgrade their homes. In this regard, the Minister for the Environment, Climate and Communications is today bringing proposals to Cabinet that will represent the most significant reform of the SEAI support schemes since they were first put in place. Subject to Government approval, the Minister will announce details of the changes later today. A new low-cost loan scheme for residential retrofitting will also be announced in mid-2022. This programme, funded in part by the Exchequer and in part by the EU, will enable credit institutions to offer loans at reduced interest rates, making energy upgrades more affordable.

In response to the exceptional rise in energy prices, the Electricity Costs (Domestic Electricity Accounts) Emergency Measures Bill 2022, which is currently going through the Houses, aims to establish a scheme for a once-off €100 electricity costs emergency benefit payment to each domestic electricity account. The scheme will apply to all domestic electricity accounts, including pay-as-you-go customers. Approximately 2.1 million domestic account holders will benefit from this exceptional payment. The cost of the scheme will be funded by the Department, with additional Exchequer funds to be made available by the Department of Public Expenditure and Reform. Work is under way between both Departments to ensure that the necessary funding will be available when the scheme becomes operational.

Programme C, circular economy development, supports the transition to a circular economy, protecting and restoring our environment through sustainable resource use. Some €98 million is being allocated to the programme in 2022 to tackle environmental damage, manage waste, safeguard our natural resources and support the move to a circular economy. This includes €26 million of funding for the remediation of environmentally-degraded landfill sites. Within this allocation, €14 million is being allocated for the final phase of the remediation of the landfill at Kerdiffstown in County Kildare. The programme also includes expenditure of €2.5 million to target waste prevention, segregation and recycling and €7.7 million for waste enforcement activities by local authorities. Some €13 million is being provided for Geological Survey Ireland, GSI, services, including the Tellus and INFOMAR mapping projects. Geological mapping data from the Tellus project inform land planning and usage while INFOMAR is Ireland’s national seabed survey and provides data to underpin the Irish marine development plan, Harnessing our Ocean Wealth. Funding of €33.5 million is being allocated to Inland Fisheries for the conservation, management and regulation of Ireland’s inland fisheries resource. This includes an allocation of €2.9 million towards the Loughs Agency, a North-South body that is co-funded on a 50:50 basis by the Department and Northern Ireland’s Department of Agriculture, Environment and Rural Affairs.

Appropriations-in-aid are income receipts of the Department other than from the Exchequer and they total €10.5 million. Receipts mainly comprise mining and petroleum income of €5 million and also include €3 million in receipts from additional superannuation contributions on public service remuneration, and GSI income of €300,000.

I am very happy to take questions from the committee members on any details relating to the Estimates for programmes A to C within my Department.

Chairman

I thank the Minister of State for his opening statement. We will commence with questions from members on programme A. When posing their questions I ask members to clearly indicate the subhead they are referring to within the programme. I also ask that they limit their questions to one subhead at a time as this will allow other members with questions on that subhead to speak before moving on to another subhead. The same procedure will apply for the remaining programmes. I call Deputy Whitmore.

Deputy Jennifer Whitmore

One of my questions relates to a comment in the Minister of State's opening statement. My second question is on the national just transition fund.

Chairman

The Minister of State may take a question on his opening statement if he wishes.

Deputy Ossian Smyth

I am happy to take it.

Chairman

I will also give the Deputy time to look through the subhead, if she wants, and I can come back to her.

Deputy Jennifer Whitmore

In his opening statement the Minister of State said, "These changes better reflect the Department’s statement of strategy, Le Chéile 23, which sets out our vision for the three-year period from 2021 to 2023." That strategy has been in place since 2021. What elements of the work that has been undertaken so far were not reflective of that vision? It was an interesting comment to make when that vision is near completion.

Some €11 million is provided for the national just transition fund. The just transition commissioner is no longer in place. His role was to engage with stakeholders and to establish the manner in which that fund was allocated.

Is all the stakeholder engagement now complete? Is it just a matter of the Department spending money on projects that have been determined? Does the Minister of State anticipate that some consultation will still be required? How will that be undertaken in the absence of the commissioner?

Chairman

I will invite the Deputy back in, if she wants to ask more specific questions on the subheads.

Deputy Ossian Smyth

Our investment has to align with our strategy, which is rapidly changing. We have a new climate action plan and rapid development of our policies. We are constantly realigning our expenditure to meet our strategic goals. The Deputy will see that the annexe to our climate action plan has very detailed items and, naturally, our expenditure has to align with those items. Is the Deputy asking me to delineate the specific changes that were not there last year?

Deputy Jennifer Whitmore

I imagine that if a strategy was set up in 2021, all the actions of the Department would align with it and not that the strategy would be updated as the Department goes through it.

Deputy Ossian Smyth

Work was under way, but there is a new layout in the revised Estimates that has to be aligned with the Le Chéile programmes. There has been a change in some of the subheads in the categorisation of where expenditure goes. In some cases, some subheads have been combined, while in others they have been split out. For better transparency, we have tried to make sure that the correct amounts of money are going with the correct subheads, for example, under just transition and the climate plan. Did the Deputy have another question?

Chairman

There was a question on just transition.

Deputy Jennifer Whitmore

It related to the €11 million specified for national just transition.

Deputy Ossian Smyth

Was the Deputy's question on whether the public consultation on the just transition fund was over?

Deputy Jennifer Whitmore

It was on whether the absence of a just transition commissioner will be problematic for spending. Is that role required in order to continue to consult with stakeholders? Have the programmes already been set in train as such and it is now just a matter of implementing them, which is what the €11 million is for? The Department has a programme that is continuing in the absence of a central figure, in the person of the just transition commissioner, to manage it.

Deputy Ossian Smyth

A public consultation is in train at present, which will go on until 14 February. That will determine what will happen in future. We will have to wait until the middle of February to get the results on that.

Chairman

Deputy Bruton is next. If Deputy Whitmore has specific questions on the subheads, I will bring her back in.

Deputy Richard Bruton

I wish the Minister of State well in what is a pivotal year as we come to breathe life into the new climate legislation. I will be interested to hear his comment on the impact indicators he has shown relating to greenhouse gas emissions in the full Estimates statement. We had a 4% decline in emissions in 2019 and a 3.5% decline in 2020. Clearly, the Covid-19 pandemic influenced the 2020 returns, but even with that 3.5% is surprisingly low for that year. While we have been going in the right direction in respect of emissions for the past number of years, to what extent are special, Covid-related conditions underpinning that? To what extent are we seeing genuine progress in the various sectors?

On the just transition commissioner, am I right in recalling that the programme for Government commits to legislation to establish a just transition commission on a more permanent basis? I had the privilege of setting up the arrangement on an interim basis in the wake of the crisis in the midlands, but where are the plans for a more permanent legislative underpinning?

I would be interested to hear when the next call for the climate action fund is anticipated. The money for it is not significant, relatively speaking, but in terms of a demonstration effect, it has been an important element in sustaining interest and progress in doing things in different ways. I do not recall the last time there was a call and I would be interested to hear when it will next occur.

Deputy Ossian Smyth

The Deputy's first question was about the reduction in emissions. He is correct that there was a significant reduction in 2020 compared with 2019. The question is to what extent that was caused by the pandemic and the obvious reduction in economic activity across sectors. Clearly, there was a major drop in transport emissions during that year. There was a reduction in 2021, but there was also a rebound. We do not have figures yet for that. We are trying to maintain economic growth to allow people to continue to enjoy their lives while their emissions are reducing. The year, 2020, was an exceptional year and a lockdown is not the route to cutting emissions for the decade.

We know that our target is a 51% cut by 2030 and that we will not achieve it with an exact 7.5% cut from one year to the next. That is not the nature of things. We will have deeper cuts in the second half of the decade compared with the first half. We had an exceptional cut in 2020, which will probably be followed by a rebound in 2021. I expect emissions to be higher overall in 2021 compared with 2020; I think my officials will agree with me. We do not yet have an estimate for that, but we will be back on a downward slope in 2022.

The next question related to the just transition commission and when it will be put on a statutory basis. We will continue with the just transition commission. We have to appoint somebody to be the permanent just transition commissioner. I do not have a date for that, but I will come back to Deputy Bruton on it.

The Deputy's question on the climate action fund is about when the next call for expenditure under it will be.

Chairman

I presume that is for applications.

Deputy Ossian Smyth

Does Deputy Bruton mean applications for expenditure for projects under the climate action plan?

Deputy Richard Bruton

Yes. It promotes people thinking up new approaches. It is a competitive fund so, hopefully, it would get many people applying and the most innovative projects would be selected.

Deputy Ossian Smyth

The latest tranche was launched in November. I understand that applications are still open for that. They will continue on that route every few months. It will be open again for more projects.

Deputy Darren O'Rourke

I thank the Minister of State for being here. I have questions across a number of subheads. That is probably a more efficient way of-----

Chairman

Okay. I am advised that it is all right if they relate to the one programme.

Deputy Darren O'Rourke

I will throw out some questions on subhead A1. Some of this may be related to the different way of presenting figures this year. As I see it, there is a reduction in administration pay. Does that relate to a staff reduction? Why are we seeing that? On A3, for the Environmental Protection Agency, EPA, we see a change in current versus capital expenditure. Under the capital programme, was there a specific building project last year versus what is projected for the year ahead? Under A8, the just transition fund, there is €11 million versus €34 million.

The reference is to the EU and Ireland. Is this all Exchequer funding or will we earmark funds that will come through the EU just transition fund? If that is the case, how is that divided? Up to €86.5 million is identified for the EU piece. When will we see that? Do we expect to see it? How will it be spent?

How is the climate action fund referred to in subhead A10 budgeted for in the Revised Estimate? I do not see a figure there. Will there be an impact on the climate action fund on the basis of the biofuels obligation offset?

Deputy Ossian Smyth

The Deputy's first question was on subhead A1, which relates to administration costs.

Deputy Darren O'Rourke

Is the figure's going down related to staff reduction?

Deputy Ossian Smyth

Our Revised Estimate for 2022 is for €39.6 million. I am looking at the same thing as the Deputy. Our 2021 Estimate was for €31.3 million. Am I missing something? There is an overall increase under subhead A1 of €8.3 million. Is the Deputy looking at something slightly different from me?

Deputy Darren O'Rourke

Yes.

Chairman

I think we are looking at different tables. Deputy O'Rourke is looking at subhead A1.

Deputy Darren O'Rourke

I am looking at administration pay in the climate action and environmental leadership programme.

Deputy Ossian Smyth

I can see that now. That is a reduction because they have been moved to category C.

Deputy Darren O'Rourke

It is related to that representation for this year. Are overall staff numbers up or down?

Deputy Ossian Smyth

Total staff numbers have increased by approximately 90 from 2021 to 2022.

Chairman

There were other questions from Deputy O'Rourke.

Deputy Darren O'Rourke

The next question is on the EPA. There is a difference in the capital. Were there specific capital works? I presume the current figure relates to pay and increased staffing levels. What is the reduction in capital expenditure?

Deputy Ossian Smyth

Is this subhead A3?

Deputy Darren O'Rourke

Yes.

Deputy Ossian Smyth

Some €10 million of that EPA money will be moved into research. The total expenditure in EPA is increasing from one year to the next, although it appears to be decreasing. However, it is a recategorisation into the research category. Did the Deputy have another question in respect of subhead A8?

Deputy Darren O'Rourke

Subhead A8 relates to the just transition fund. What was the split between Irish and EU funding? When will we expect to see EU funding? How will it be allocated?

Deputy Ossian Smyth

The EU just transition fund is a newly established fund that comes under the 2021-27 programming round, under EU Regulation No. 1056 of 2021, within the framework for EU cohesion policy. The fund is to address adverse affects of climate transition by supporting the most affected territories and workers concerned and promote a balanced socio-economic condition.

Ireland will receive €84.5 million from EU just transition funds over that period up to 2027. That is the amount for this year. The Government will complement this funding with Exchequer resources. The governance and management of expenditure under this fund has to comply with just transition fund regulation from the EU and the EU's common provisions regulation.

The transition fund is Pillar 1 of the European Green Deal just transition mechanism and investments under the just transition fund may be complemented by a combination of grants and loans to private sector entities under a dedicated window of the EU's InvestEU instrument. Ireland has to prepare a territorial just transition plan and accompanying operational programme for approval for the EU to secure access to EU just transition funds.

This plan will set out Ireland's proposed investment priorities, as well as targeted sectors and regions. The Minister for the Environment has appointed the Eastern and Midland Regional Assembly, EMRA, as managing authority for the EU just transition fund and discharge procedure. EMRA will also develop the territorial just transition plan and operational programme. I can ask it to give the Deputy an update on where they are with regard to when it expects its application to go in and what funds it will have.

Deputy Darren O'Rourke

Is the figure of €34 million presented today Irish funding? Does it make any provision for any EU funding? Is EU funding included in it? How do we account that?

Deputy Ossian Smyth

My understanding is that €11 million is Irish funding and €21 million for expenditure associated with the EU just transition fund. That is a split of €21 million from the EU and €2 million from us. Some €2 million of Irish funding and €21 million of EU funding makes up the €23 million. Is that Deputy O'Rourke's information?

Deputy Darren O'Rourke

I have that breakdown. That is helpful.

Deputy Ossian Smyth

I think the Deputy had another one. Was it subhead A10?

Deputy Darren O'Rourke

It was subhead A10. What are we looking in this regard for 2022? How is the offset for the biofuel obligation expected to impact on the climate action fund, if at all?

Deputy Ossian Smyth

There was €108 million in funding for the climate action fund, which was allocated in 2020 for bog rehabilitation. This is planned to store 100 million tonnes of carbon out to 2050. This project is financed by the national recovery and resilience plan. To come to the Deputy's question about the biofuels obligation, I think his question was whether it-----

Deputy Darren O'Rourke

Will the move in terms of offsetting the increase in the biofuels obligation impact on the monies that will go the National Oil Reserves Agency levy, but make their way into the climate action fund?

Deputy Ossian Smyth

There is a 26% reduction. The income from the National Oil Reserves Agency in 2021 was €80 million. In 2022, it is €59 million and that reflects the reduction in the NORA levy during that time, which is balanced by the biofuels obligation. That is how the decision was made.

Chairman

If the Minister of State wants to bring in his officials, we can go into private session, to elaborate on any of those answers.

Deputy Ossian Smyth

Does the Chairman want to do that in today's session?

Chairman

It is up to the Minister of State.

Deputy Ossian Smyth

If any of the committee members want to go into more detail, with the officials, they are welcome to do so.

Chairman

Deputy O'Rourke is happy.

Chairman

My question is on subhead A3, which relates to the funding of the EPA. I welcome the Minister of State's note that the salaries have increased and there are 90 extra personnel in the EPA, which is very welcome. I hear frequently from all sectors of society that there is a slowness in the process of the EPA in terms of issuing licences, decision making and so on. We are in a situation in which we need to act very quickly to progress climate action and do what we need to do.

The Minister of State may not be able to answer my question today, but perhaps he will revert to us. Has a needs analysis been done of the EPA? Is it sufficiently funded to do what we need it to do, as quickly as we need it to do it?

I appreciate that it may not be a question the Minister of State can answer here and now but the committee would welcome that level of information from the Department.

Deputy Ossian Smyth

This matter was raised by Deputy Whitmore in the Dáil last year. Other Deputies have raised issues that companies were having with the EPA in obtaining determinations of licences. I was keen to ensure that this was not due to a lack of resources and that the EPA was properly resourced so I made inquiries to ensure the agency had what it needed. I understand progress has been made. Deputy Whitmore raised the case of a particular company and I understand it obtained a determination in the end. However, it should not take years to reach decisions. Inquiries were made into why things were taking so long. We made sure there was sufficient funding in place this year. There should be better communication with those applying for determinations of licences and there should not be a situation where forms are not correctly filled in, information is not available and applicants need to go back and forth.

It is also important to say that we have to ensure the determinations are made carefully. For example, a large number of houses will probably be demolished because they were defective or had mica blocks in them. It is important that the waste material from that demolition does not re-enter the construction stream to be used a second time and that a determination is not made that this is a useful material for load-bearing walls or suchlike. It is not just a case of rapidly agreeing that everything that needs to go back into recirculation should be licensed as such. That said, the system needs to be sped up. I believe the EPA has sufficient funding this time and its budget is not a constraint at this stage in that area. I recognise, however, that there were problems.

Chairman

We now move to programme B.

Deputy Darren O'Rourke

On subhead B4, when will homeowners start to get credit? When will the export tariff scheme be in place and operational? On the same subhead, the targets for retrofits were 21,544 in 2021 and 19,400 in 2022. I ask the Minister of State to speak to that, please.

On outputs, the target for the number of lower income households provided with energy efficiency upgrades is lower for this year than last. In 2021, the target was 5,800 and in 2022 it is 4,500. I know there is a note on that but I ask the Minister of State to speak on it. It states that the number of homes is lower than target for the previous year but this is because of a shift to deeper energy efficiency measures resulting in more energy and carbon dioxide savings. I raise that in the context of the national retrofitting plan that we will hopefully see later today. Sinn Féin specifically asked questions around the options to achieve reductions in emissions. For example, what is the difference between 20,000 houses moving to a BER C2 versus 20,000 houses moving to a BER B2? Is a different approach by the Department planned for in these figures? The headline figure is still to have 500,000 deep retrofits and 400,000 heat pumps installed. Is it planned to do this in a different way and, if so, are there cost implications from that?

Are there targets for the expansion of the sustainable energy community, SEC, programme? I know there are targets for 2030. How do they relate to 2022? What kind of expansion do we hope or expect to see? From meeting members of some of the sustainable energy communities, I know there was talk of a new funding model or type of grant or fund where sustainable energy communities would be rewarded for good progress and the amount of retrofits done in a community. They referred to it as a LEAF or local energy assessment fund. I do not know if that rings a bell with the Minister of State. What are the plans with that?

The €100 electricity rebate is coming from departmental energy efficiency funding and broadband funds. From where exactly is that money coming? What implications will that have for the roll-out of the affected schemes? I am particularly interested in how those on long waiting lists for retrofitting works will be prioritised in year one.

Deputy Ossian Smyth

The Deputy's first question was on the number of homes being upgraded. This is one of those meetings where another meeting is taking place at the same time at which the numbers will be changed. I think it will be a dramatic change. I will not guess what the Cabinet will approve today but I understand it is possible the increase in those numbers will be significant and dramatic.

The Deputy asked about deeper and more shallow retrofits and how one accounts for them. That is a very good question. To say we will retrofit 20,000 homes without saying if those will be deep or shallow retrofits is not clear. We need a way to account for them. As the information note puts it, a reduction in the number of homes retrofitted could still lead to an overall increase in the amount of carbon dioxide saved. We need to be clear to each other in explaining what is being done.

I expect there will be increased funding for shallow retrofits this year. This will be for people who are unwilling to embark on a whole deep retrofit, even with a large grant or loan, but are prepared to do it in steps. They might be prepared to do their attic and walls and might be prepared to install a heat pump later. That would be done step by step with a smaller total budget for each step of the way. It is a matter of responding to that kind of demand from the public since not everyone is willing to take on a €50,000 retrofit, even where €25,000 of the cost is covered by a grant. There are those for whom even €3,000 would be a more reasonable amount. This will result in a larger number of smaller steps to achieve an outcome.

Deputy Darren O'Rourke

Many people have already availed of an SEAI grant to do shallow retrofits. A pensioner who had cavity wall insulation done ten years ago cannot go back to the SEAI now for a grant for attic insulation because of the one-visit rule. Will that rule be removed? Will such persons be able to avail of a further grant for, say, attic insulation?

Deputy Ossian Smyth

We would like people to have the chance to carry out a series of steps and not be prevented from doing step 2 because they have done step 1 already. I think that will form part of the national retrofit plan today. That will depend on the decision taken by the Government today.

The right thing to do is to say to people that although they did an upgrade, they are still eligible to do the second stage.

To go back to the Deputy’s other questions, he asked me about the SEAI target for 2022. The number we have been discussing is the SEAI target for 2022 and that is the number that is likely to change as a result of the Government decision today on the number of homes.

Deputy Darren O'Rourke

Did the Minister of State pick up on the question on sustainable energy communities and the expansion of that scheme? I do not see it anywhere in the documentation or in the Minister of State’s opening statement.

Deputy Ossian Smyth

Again, I am looking to see what comes out of the Cabinet meeting today. The SECs have been very successful and they have brought people together. I have witnessed them at first hand and have seen where people in an estate, on a street or in a village can all come together and carry out an action jointly. I would like to see them being better funded in the future but we will see what comes out of the Cabinet decision today.

Deputy Darren O'Rourke

I am making the point that they are not entirely related to retrofitting. We are waiting for a national retrofitting programme later but we are also waiting to hear on the SECs. Is it the same answer in regard to the LEAF funding that has been referenced?

Deputy Ossian Smyth

I will have to get the Deputy an answer on the LEAF funding as I understand it has not been finalised. We will come back to the Deputy directly with a note.

Deputy Darren O'Rourke

The final question was in regard to the fund for the €100 payment for electricity costs. Where exactly is that coming from and what is its impact on other areas?

Deputy Ossian Smyth

That is for a maximum payment of up to €215 million. It is in the legislation we were working on in the Dáil last week. The funding for it is to come 50% from the Department of Public Expenditure and Reform, so long as the Minister for Public Expenditure and Reform agrees to that, and 50% from the Department of the Environment, Climate and Communications. It is to be done through a reallocation from other divisions but I do not think those divisions have been decided yet, so it has not been allocated. The Deputy suggested it would come from energy efficiency but I do not think that decision has been made. In other words, €107.5 million will have to be reallocated from other divisions within the Department.

Deputy Darren O'Rourke

When is that decision likely to be made?

Deputy Ossian Smyth

The legislation is emergency legislation. The idea is that the bills are credited in February and March so it would be as soon as possible.

Chairman

We would appreciate it if the Minister of State could revert to us on that timeframe.

Deputy Ossian Smyth

Is the Chairman asking me that, as soon as we have decided which of the other programmes are to be depleted to fund it, we are to come back and tell the committee?

Chairman

Yes, that would be great. I call Deputy Whitmore.

Deputy Jennifer Whitmore

In regard to subhead B4 on the retrofit programme, everyone is waiting to hear and really hoping for an ambitious programme to be announced this afternoon, and I know there may be some instances where the Minister of State cannot go into much detail. I wonder about the low-cost loans scheme. One of the risks is that there will be a significant number of people who will not be in a position to take out a loan upfront in order to do retrofitting and those people may not be eligible for something like the warmer homes scheme. Has the Department done an analysis on the number of households that will fall into that financing gap and what will be available for them?

The next point follows on from Deputy O'Rourke’s point on the figures. If we look at the figure of 19,400, that is not necessarily to the rating of B2, and this is specified and brought out in more detail in the third point, which states that 8,640 will be to a B2 level. The programme for Government and the Government commitment is for 500,000 at B2 level. Is it the case that out of that 500,000, only 8,640 have actually been upgraded to B2 level so far? That would leave 491,000 houses that still have to be brought up to that B2 level.

Deputy Ossian Smyth

What was the first question?

Deputy Jennifer Whitmore

Essentially, what will be available for those households that do not meet the eligibility criteria under the warmer homes programme but will not have the money upfront to pay and will need to get a low-cost loan?

Deputy Ossian Smyth

The timeframe for this is the middle of this year. The target interest rate is 3.5%. It fits into the loan category of the available green loans, and there are green loans from the post office at 4.5%. If people have a mortgage, which many do, they can refinance and probably get it at a lower rate than the 3.5%, perhaps at between 2% and 3%. It is to fit into that category of loan. The idea is that the loan will not be secured on people’s property and it is a non-recourse loan. The idea is that it covers the portion of the retrofit that people cannot afford or that is not covered by the grant, assuming people do not have their own resources to pay for it. Not everybody is going to do a deep retrofit, so it is possible for people to do a much smaller retrofit starting from around €3,000, where the person is only putting up €600 of the capital themselves. The loan could be as low as that and it is over a period of years and is a non-recourse loan. The idea is that people are not frozen out because they have to take on some giant amount of money. They can do it step by step.

It will be mid-2022 before that loan scheme is ready. The idea is also that the loan is to some extent guaranteed by the State, so it is possible to lend to people who have poor credit to insulate their homes so they can save money and will be able to make the payments out of the reduced energy bills they will have in the future.

The Deputy asked about the accounting for shallow retrofits and deep retrofits, and how many of the 500,000 have to get to B2. Last year, 2020 to 2021, some 4,600 B2s were achieved and 8,640 is the target for this year. However, that does not take into account all of the people who have come some steps closer to B2 and who will take another step to move on. There is also the fact that the funding for this is coming from the carbon tax. As the decade moves on, more money will be available for more retrofits and given the scale-up of the available capacity in the labour market to deliver this, the amount of funding available increases each year, so it is going to be a programme that will have more going on in the second half of the decade than the first half.

Chairman

My questions on programme B were all related to the programme that is going to be announced, which the Minister of State is not going to tell us anything about.

Deputy Ossian Smyth

It is not that I am holding back the information but it has not been decided and I am not in the Cabinet.

Chairman

I am sure the Minister of State has a good insight but we await the six o’clock news. We move to programme C. I call Deputy Whitmore.

Deputy Jennifer Whitmore

I have a specific question in regard to subhead C7 on landfill remediation. The Minister of State specified that Kerdiffstown in County Kildare is programmed to get €14 million. A similar dump in Wicklow, Whitestown dump, is being remediated at the moment. Has any budget been allocated for that?

Deputy Ossian Smyth

I am being told not yet and that there is an existing legal action that is proceeding which is delaying going ahead with the funding for that remediation. Kerdiffstown is the major one at €14 million and there is another €12.25 million for other sites. It is apparently due to a legal case that Whitestown has been held up.

Deputy Jennifer Whitmore

Is it possible to talk to the officials on this specifically?

Deputy Ossian Smyth

Certainly, if the Deputy wants to go into private session.

Chairman

Yes, we will do that now.

Deputy Jennifer Whitmore

I thank the Chairman.

The select committee went into private session at 1.10 p.m. and resumed in public session at 1.13 p.m.

Chairman

Deputy Devlin has indicated.

Deputy Cormac Devlin

Gabhaim buíochas leis an Cathaoirleach agus an Aire Stáit. I thank him for the run-through of these estimates. I refer to subhead C6 which is the waste management programmes. I see a near doubling of that fund. Will the Minister of State elaborate on what the additional increase is and what it is due to be spent on?

Deputy Ossian Smyth

The Deputy is asking about the doubling of the waste management fund under subhead C6 and where that money is being allocated to. It is the most disappointing answer. It is an accounting reallocation from three other subheads from last year, those being landfill remediation, petroleum services and waste management. They have been combined. I guess the matter Deputy Whitmore was just asking about, that is, the €26 million for landfill remediation, which is a very large amount of money, is being moved over, so that would explain that.

Deputy Cormac Devlin

Okay.

Deputy Ossian Smyth

We are in a year where from one year to the next, subheads are being combined and divided out. Thus, some of the items are not directly comparable with last year.

Deputy Cormac Devlin

I thank the Minister of State and I appreciate that. I will explain the reason for the question. The Minister of State will be aware from our constituency of the issue of the north beach in Bray, as indeed will Deputy Whitmore, and the funding that has been required to maintain that particular former landfill site. When she asked her question on landfill remediation it prompted a concern about the waste management programme and what that entailed when I saw an increase. However, if it is a reallocation, that is fine. Let us just hope the funding continues because it is much needed for those sites.

Deputy Ossian Smyth

I thank the Deputy.

Chairman

Is anyone else indicating on this programme? They are not.

I have a general question on the programme. It is a restructuring of the programme entitled "Circular Economy Development". Does the Minister of State want to speak to the reasons behind that restructuring?

Deputy Ossian Smyth

I suppose the waste prevention is being brought in as "circular economy" and it is part of the change of mindset on the whole division. We are not considering things as waste anymore and considering waste as a resource. We are moving away from the idea this is something we need to bury or burn towards it being something we need to reuse. I am aware my officials were already in moving in that direction well before I was appointed but I welcome it and think it is a very positive change.

Chairman

I agree it is very positive.

There are no members indicating. We have completed our consideration of the programmes. I thank the Minister of State and his officials for assisting the committee in our consideration of the Revised Estimates. I also thank members for their probing questions.