Dáil Éireann Debate, Tuesday - 23 April 2024
136. Deputy Peadar Tóibín asked the Minister for the Environment, Climate and Communications the exact value of fines that will be paid to the European Union if Ireland fails to reach the targets set for emissions reduction by 2030. [17925/24]
View answerIreland’s EU greenhouse gas emissions reduction targets, to 2030, are set by the EU Effort Sharing Regulation (ESR). The regulation covers those sectors of the economy that fall outside the scope of the EU Emissions Trading System (EU ETS); including transport, buildings, agriculture, light industry and waste.
The ESR sets binding annual greenhouse gas emissions targets for each Member State for the period 2021–2030. Beyond direct emissions reductions, the legislative framework of the regulation provides for a number of compliance options; including the banking, borrowing and trade of annual allowances. This approach enables flexibility among Member States to achieve targets as efficiently and as fairly as possible.
While the governance framework of the ESR does not provide for the imposition of direct fines from the EU, there are costs associated with availing of compliance options under the framework, in particular for trading.
The exact cost to the exchequer would be a function of the extent to which the State exceeded its target and the unit cost of Annual Emissions Allocation units (AEAs) available for purchase. This would largely be determined by the availability of surplus AEAs and, in turn, Member States’ collective progress towards the targets set by the regulation. The estimation of exact values is further complicated by the lack of an existing market for the trade of AEAs or any prior data on purchases under the ESR, at this point.
Spending Review 2023: Estimating the Potential Cost of Compliance with 2030 Climate & Energy Targets, published in February 2023, was prepared by officials from my Department and from the Department of Public Expenditure, NDP Delivery and Reform, as a first step at estimating the cost of compliance with EU climate targets under the ESR. The paper outlines the proposed approach to estimating the potential costs of compliance on an annual basis out to 2030, in order to present potential implications if Ireland fails to make sufficient progress towards its targets and in implementing the Climate Action Plan 2023.
My officials are continuing to work closely with the Department of Public Expenditure, NDP Delivery and Reform and other relevant Government Departments to keep on top of any developments on the fiscal risks associated with any failure to reach climate targets and to ensure we are achieving the best possible value for the Irish taxpayer.
