The 2009 Effort Sharing Decision (ESD) 406/2009/EC established binding annual greenhouse gas emissions targets for EU Member States for the period 2013 to 2020. These targets concern emissions from most sectors not included in the EU Emissions Trading System (EU ETS), such as transport, buildings, agriculture and waste. For the year 2020 itself, the target set for Ireland is that emissions should be 20% below their value in 2005. This is jointly the most demanding 2020 reduction target allocated under the ESD, and one shared only by Denmark and Luxembourg.
The latest projections of greenhouse gas emissions, published by the Environmental Protection Agency (EPA) in May 2018, indicate that emissions from those sectors of the economy covered by the ESD could be between 0% and 1% below 2005 levels by 2020. While this is very disappointing, it is not surprising given the recent pace of economic growth, with increases in emissions from the agriculture and transport sectors in particular. The projected shortfall to our targets is further exacerbated by both the constrained investment capacity over the past decade due to the economic crisis, and the extremely challenging nature of the target itself. In fact, it is now accepted that Ireland’s 2020 target was not consistent with what would be achievable on an EU wide cost-effective basis.
The ESD includes a number of flexibility mechanisms to enable Member States to meet their annual emissions targets. Using banked emissions allocations from the period to 2015, Ireland is projected to comply with its emissions reduction targets in each of the years 2013 to 2017. However, cumulative emissions are projected to exceed annual targets for 2018, 2019 and 2020, which will result in a requirement to purchase additional allowances. While this purchasing requirement is not, at this stage, expected to be significant, further analysis is ongoing to quantify the likely costs involved, in light of the final amount and price of allowances required.
In parallel, I am putting in place a number of additional measures to seek to close the gap to compliance with Ireland’s targets under both the Effort Sharing Decision and the Renewable Energy Directive.
In relation to biofuels, in May of this year, I signed an order increasing the obligation rate of fuel suppliers from the current level of 8% by volume to a level of 10% by volume which will come into effect from 1 January 2019. I intend to further increase this obligation to 11% by volume from 1 January 2020 and also carry out a public consultation next year in relation to further increases in the post-2020 period.
In order to promote further penetration of electric vehicles, I have secured Government support to expand the range of measures in place drive the electrification of transport, adding home charger support, Benefit in kind enhancement, toll reduction and support to the taxi/hackney sector.
I opened the first phase of the Support Scheme for Renewable Heat for applications on 12 September. This phase provides a grant of up to 30% of the installation cost of a heat pump system in non-domestic applications.
I launched the first call for applications for the Climate Action Fund on 9 July. This is one of four funds established under the National Development Plan 2018-2027 as part of Project Ireland 2040 and it will have an allocation of at least €500 million over the period to 2027.
I secured Government approval in July for the high level design of the new Renewable Electricity Support Scheme (RESS). The new Scheme has been designed to deliver Ireland’s contribution towards an EU-wide renewable energy target of 32% out to 2030, within a competitive auction-based, cost effective framework. The first RESS auction will deliver ‘shovel ready’ projects, reducing the gap to 2020 and assisting in the early delivery for our trajectory to 2030.
For 2030, the recently agreed EU Effort Sharing Regulation (ESR) sets out binding annual greenhouse gas emission targets for each Member State for the period 2021 to 2030. Ireland’s target under this Regulation will be for a 30% reduction in 2005 levels of emissions by 2030. This is where we must now focus our efforts to ensure that at the absolute very least we meet our 2030 target.
To achieve this 2030 target, Ireland may need to avail of flexibility options built into the ESR agreement, including provision to transfer allowances from the ETS to the non-ETS sector and provision to take account of emissions credits attributable to land use, land-use change and forestry (LULUCF) activities.