Dáil Éireann Debate, Tuesday - 26 April 2022
89. Deputy Darren O'Rourke asked the Minister for Transport the way that he intends to build a second-hand electric vehicle, EV, market here; if he has examined the barriers posed by Brexit in the context of importing second-hand electric vehicles; if he is considering introducing a scrappage scheme for older more polluting cars; and if he will make a statement on the matter. [21010/22]
View answerHow does the Minister intend to build a second-hand electric vehicle market here? Has he examined the barriers posed by Brexit to importing second-hand electric vehicles from Britain? Is he considering introducing a scrappage scheme for older, more polluting cars in rural areas? Will he make a statement on the matter?
Electric vehicles are the most prominent transport mitigation measure in the 2021 climate action plan. There is an ambitious target of 945,000 electric vehicles on the road by 2030. This is challenging but indicates the scale of the transformation needed.
I am acutely aware that the cost of electric vehicles remains an issue for many consumers and that supply chain issues globally have also proven difficult. These have been exacerbated by international events. For these reasons our policy measures are being kept under continual review. The Department convened the electric vehicle policy pathway working group to produce a roadmap to achieving the 2030 electric vehicle target. This group considered a variety of regulatory, financial and taxation policies to accelerate electric vehicle adoption including scrappage schemes. The group concluded that a general scrappage scheme would entail significant additional costs and not necessarily deliver the desired objective in terms of net carbon emissions. However it concluded that niche markets scrappage schemes could potentially play an important role, such as in the small public service vehicle sector that we mentioned earlier. The recommendations of the group were approved by Government and as a result the key range of supports to support the transition to electric vehicles will continue until at least the end of this year.
These measures include purchase grants for private car owners and taxi drivers, vehicle registration tax, VRT, relief, reduced tolls, home charger grants, favourable motor and benefit-in-kind tax rates as well as a comprehensive charging network. These are among the most generous suite of measures available across Europe and they have collectively contributed to an increased uptake of electric vehicles in Ireland in recent years to more than 55,000, representing a growing share of the overall market for new vehicles.
An implementation group has been established to progress the recommendations and consider further potential measures. This group will report on its progress to Government later this year. In addition, work is under way to establish the zero-emission vehicles Ireland office as a matter of priority. This office will co-ordinate the implementation of existing and future electric vehicle measures and infrastructure. Our objective is to develop and refine cost-effective, targeted policy supports over the coming years.
I appreciate some movements and changes were made to the schemes last July on the back of the work of the group the Minister mentioned. It took away some of the particularly offensive elements of the scheme, for example, the price cap was reduced. Much more needs to be done. The trickle-down economics approach is that those who can afford electric vehicles can get them now and the people who actually need to have electric vehicles, those who are car dependent and will be car dependent in future, can get them at some stage in the distant future when those who have means are ready to move on. With regard to the State showing leadership on this, the Minister of State, Deputy Ossian Smyth, indicated a commitment on State procurement. Is there a commitment that the State will procure electric vehicles at any time in the near future? Will the Minister give us an update on this in the first instance?
I will begin with the wider point. The supports did evolve, with regard to very expensive cars being excluded from the grant scheme. It will continue to evolve. As electric vehicles become much more commonplace we will need to look at targeted supports, consider the issue of social justice in how we do it and support the likes of the second-hand market. We are looking at measures to develop and promote the commercial fleet as a way of doing this because they tend to trickle down not in the trickle-down economics way but through being sold on after three years. This will start to provide a second-hand market. We have a real problem because of Brexit in that the traditional second-hand market we got from the UK has been cut off because of Brexit and for no other reason. The wider context is important. This will continue to evolve. Supports will be more targeted as electric vehicles become more commonplace and the need for the original flat grant for everyone to get the market built up changes to one where we want to have targeted supports.
Across the political spectrum there is a commitment to try to deliver as much of this as quickly as possible. The committees dealing with transport and climate have heard from the industry and various stakeholders. The industry tells us is it needs fleet cars and State cars to be electric vehicles. It needs to turn them over as quickly as possible after a couple of years to generate the second-hand market. We hear from importers that Brexit has been a significant problem.
That could be addressed if the Government looked to offset the impact of Brexit with some sort of support for second-hand EVs. There are people who are or were in the business of importing or procuring second-hand EVs and the Minister knows as well as I do that the entire supply chain has completely closed. It has left the process very difficult. The Government must look at this in a real way.
It is complicated and we must be careful not to create further inequality if the cars coming in are only for the very wealthy, for example. There is a wider global supply chain issue and the car supply process is currently broken for a variety of reasons, including the war in Ukraine and other factors. We are not seeing the usual delivery of either electric or other vehicles. In that context, the market for second-hand cars has experienced a sharp increase in prices. We must be sensitive and careful in looking at what is happening. We can look at the UK and Brexit matters but the better approach was suggested by the Deputy, which is getting the State involved. An Post is an example. It did not have a small intervention but rather it had a massive change in its fleet, creating a body of light cargo vehicles or vans that could then be moved to the second-hand market. That is a better approach because the State would get a benefit and the second-hand market would also develop. That would fall to the Minister of State, Deputy Ossian Smyth, but it is the best way to develop that kind of second-hand market.
